Question ID:
2019_4640
Legal Act:
Regulation (EU) No 575/2013 (CRR) as amended
Topic:
Supervisory reporting - Funding Plans
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 XV
Disclose name of institution / entity:
No
Type of submitter:
Competent authority
Subject Matter:
EBA_v6217-6222 and EBA_v6224-622; EBA_v6230 validation rules (warnings) implementation
Question:

Does EBA_v6217-6222 and EBA_v6224-622; EBA_v6230 validation rules (warnings) are correctly implemented and should be applicable for all institutions?

Background on the question:

• EBA_v6217-6222 and EBA_v6224-6227 validation rules (warnings) – The essence of these rules is actually the same. For example if 030 (Loans to Households) is filled, then 040 (Domestic operations) line must also be filled. However, the reporting institution consists of Holding (in third country) and 3 other countries entities (X country, Y country, Z country). Therefore in the Financing Plans report on consolidation level (for all group), institution treat all data on loans and deposits as International Operations (line 090), with 030 and 090 lines filled. Institution did not filled 040 (Domestic operations) line as in this specific case (on consolidation basis for all group) the respective validation rules should not be valid. • EBA_v6230 (if {c010} != 0 then {c020} != 0 and {c030} != 0 and {c040} != 0 and {c050} != 0) – We believe this validation rule should not be valid for some of institutions. Since institution's plans to reduce the deposits from credit institutions position starting 2019 and receive funding from the parent company and other sources, the Planned Year 2 position and Planned Year 3 position values are 0, therefore institution can not met validation rule 6230 condition.

Date of submission:
29/03/2019
Published as Final Q&A:
08/05/2020
EBA Answer:

All validation rules are applicable and equally binding. This applies to warnings in the sense that they shall also be considered and closely monitored by reporters. Explanations about failure should be provided to the competent authority where needed. Whereas the main purpose of warnings is to improve data quality, some warnings may neither be applicable to all reporters nor to all reference dates (Annex XV, spreadsheet “Explanations”).
Specifically, the validation rules mentioned in the question try to detect cases of template incompleteness.
In the case of VR v6217-6222 and v6224-6227, “Domestic” activities are defined in paragraph 270 of Annex V in Regulation (EU) No 680/2014 (ITS on Supervisory Reporting).

In particular, “‘domestic’ shall include the activities recognised in the Member State w here the reporting institution is located”.

According to article 11.2 of the CRR, “Institutions controlled by a parent financial holding company or a parent mixed financial holding company in a Member State shall comply, to the extent and in the manner prescribed in Article 18, w ith the obligations laid down in Parts Tw o to Four and Part Seven on the basis of the consolidated situation of that financial holding company or mixed financial holding company. Where more than one institution is controlled by a parent financial holding company or by a parent mixed financial holding company in a Member State, the first subparagraph shall apply only to the institution to w hich supervision on a consolidated basis applies in accordance w ith Article 111 of Directive 2013/36/EU”. Thus, the controlled institution (“institution” as defined in article 4.1 (3) of CRR) is subject to Supervision (on the basis of the consolidated situation of the holding) by its competent authority in its Member State (in this example, country “X”), and therefore obliged to provide supervisory information to its competent authority. Accordingly, the activity in country “X” shall be considered “domestic” for the purposes of supervisory reporting, even if the holding is in country “A”.
Regarding the case of VR v6230, the VR is a w arning.

Status:
Final Q&A