Question ID:
2018_4256
Legal Act:
Regulation (EU) No 575/2013 (CRR) as amended
Topic:
Supervisory reporting - COREP (incl. IP Losses)
Article:
99
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph:
Annex II - par. 1.6.2
Disclose name of institution / entity:
Yes
Name of institution / submitter:
Bank of Italy
Country of incorporation / residence:
Italy
Type of submitter:
Competent authority
Subject Matter:
Validation rule on C_05.01 template - V0193_M
Question:

Should V0193_M validation rule be deactivated or changed?

Background on the question:

This rule states that {C 01.00, r390, c010} = {C 05.01, r190, c060}. The equality does not hold for banks which apply dispositions laid down in the art. 473 of CRR “Introduction of amendments to IAS 19”, in particular par. 4, let. E) “0,2 in the period from 1 January 2018 to 31 December 2018” and report data only for the template C_05.01 but not for template C_01.00. Actually, the latter (C_01.00) is to be reported according to the instructions provided in the EU Regulation no. 680/2014, Annex II, part II, par. 1.13.a “The items in CA1 are generally gross of transitional adjustments. This means that figures in CA1 items are calculated according to the final provisions (i.e. as if there were no transitional provisions), with the exception of items summarizing the effect of the transitional provisions.” We believe that the V0193_M validation rule could be confirmed as a “warning” check for banks which are allowed, by the Competent Authority, to calculate deduction according to art. 473 “By way of derogation from Article 481 during the period from 1 January 2014 until 31 December 2018, competent authorities may permit institutions that prepare their accounts in conformity with the international accounting standards adopted in accordance with the procedure laid down in Article 6(2) of Regulation (EC) No 1606/2002 to add to their Common Equity Tier 1 capital the applicable amount in accordance with paragraph 2 or 3 of this Article, as applicable, multiplied by the factor applied in accordance with paragraph 4.” As wrote for the validation rule V0191_m, cross-checks between C_01.00 and C_05.01 solution could result in a conflict with dispositions laid down in the EU Reg. EBA-ITS (Annex II, part II, par. 1.6.1 “Institutions shall only report elements in CA5 during the period where transitional provisions in accordance with Part Ten of CRR apply”).

Date of submission:
10/09/2018
Published as Final Q&A:
08/05/2020
EBA Answer:

Validation Rule v0193_m states that {C 01.00, r390, c010} = {C 05.01, r190, c060}, that is, (-)Defined benefit pension fund assets = Memorandum items, Eligible amount without transitional provisions, Defined benefit pension fund assets.
According to reporting instructions in Annex II, Part II to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting):
{C 01.00, r390, c010} = defined in Articles 4(1)(109), 36(1) point (e) and 41 of the CRR
{C 05.01, r190, c060} =

  • Articles 36 (1) point (e), 469 (1), 472 (7), 473 and 478 of CRR.
  • When determining the amount of the above-mentioned defined benefit pension fund assets to be deducted, institutions shall take into account the provisions of Article 41 of CRR.
  • The amount to be reported in column 060 of this row : Original deductionaccording to Article 36(1)(e) of CRR.

Column 60 of row 190 does not contain the applicable amount in accordance w ith article 473 paragraph 2 or 3 to w hich the factor of paragraph 4 is applied but the deduction reported in template C01.00.

Based on the above, the amount to be reported in {C 01.00, r390, c010} and in {C 05.01, r190, c060} is the same (i.e. the amount before the application of transitional provisions).
Having said that, if an institution does not apply transitional provisions, it is not required to fill in the associated row s of template C 05.01 (see also Q&A 2018_3887). Accordingly,
validation rule v0193_m has to be adapted to those cases w here an institution does not have to report values for row 190 of the template C 05.01 any longer.

Status:
Final Q&A