Does "formal routine checks" of SCV files in Article 96 refer to all indicators in paragraph 70 i1-i4? If so, are DGSs required to test all indicators by sampling files from all affiliated credit institutions by 3 July 2019?
Paragraph 64 states: "DGSs should test the arrangements in place for requesting and obtaining SCV files from affiliated credit institutions and assess the quality of those files and the timeliness of their transmission" whereas paragraph 96 states that "With a view to the first EBA peer review, by 3 July 2019 DGSs should perform and report results on the following tests: 1) SCV file tests: formal routine checks of SCV files of all affiliated credit institutions. [...]"
The description of priority tests in paragraph 96 rises two questions, as 1) the term "routine checks" is not explained in the guidelines and as 2) the requirement of testing all affiliated credit institutions is not mentioned in paragraph 64-70. Performing checks of all affiliated credit institutions within the deadline of 3 July 2019 may be an issue for many DGS based on their existing systems and capacity.
SCV-files should be assessed as part of the first two priority tests mentioned in paragraph 96 of the EBA Guidelines on stress tests on DGSs (EBA/GL/2016/04) i.e. i) the SCV-files test and ii) the operational capability test. These tests should be performed and outcomes reported to the EBA by 3 July 2019. Tests should be conducted as follows:
SCV file test:
The tests concern a test of the SCV file in isolation and should cover all indicators included in paragraph 70 of the EBA/GL/2016/04. These routine checks should be conducted on all institutions, members of the DGS, making sure that the SCV files earmark deposits at branches in other Member States. Where applicable, the reason for not testing all institutions should be reported by using the template in Annex 1 of the EBA/GL/2016/04. For the purposes of this test, it is allowed to use samples rather than complete SCV files.
Operational Capability test:
SCV files should also be tested as part of a general operational capability test. Tests on the SCV files should again cover all indicators mentioned in paragraph 70 of the EBA/GL/2016/04. In this test, SCV files should be tested in a payout scenario concerning a credit institution with a number of depositors of no less than the second quartile of affiliated credit institutions not falling in any of the categories described in paragraph 53 of the EBA/GL/2016/04. In this case, using a sample of an SCV file is also permitted.