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Deutsche Börse Group

From our point of view, the application date June 2017 requires precision as to which period the disclosure requirements would apply. The current formulation creates legal uncertainty and possible uneven level playing fields between institutions publishing their Pillar III report for the same period at a different point in time. Hence, we clearly see the need to specify the application date of the guidelines more precisely.

Institution A will disclose its Pillar III report for 2016 in May 2017 while institution B will disclose its Pillar III report for 2016 in July 2017.
It is unclear if institution B has to apply the new guidelines while institution A is not obliged to do so. It seems quite likely that the disclosures would deviate from each other and would not be comparable in an appropriate manner.

In addition, in case the publication of the Pillar III report may be slightly delayed to original plans of the institutions and publication would suddenly fall after the date of applicability of these guidelines a late change of the report would be required. As such, a clear rule not just on the date of applicability but also to the related reference period needs to be implemented. We therefore propose to change the text of paragraph 10 as follows:
“10. These guidelines apply from [2 months from the date of publication of the guidelines in all EU official languages. The final factual date (‘dd month year’) will be inserted on the day of the publication on the EBA website] on all disclosures for periods which end after that date.”
To our understanding the first “LCR reporting reference date” is 30 September 2016 (according to Regulation (EU) No 680/2014 (as amended by Implementing Regulation (EU) 2016/322)). Therefore, the figures for Q3/2016 will be calculated and reported as of 30 September 2016.
In case our proposal for paragraph 10 of the guidelines (see our response to Question 2) is followed any disclosure under the guidelines in principle will only cover 2017 .
Consequently, transitional provisions may not be needed with the expectation of rules for institutions with accounting year deviating from fiscal year. In this case the transitional provisions are one-off provisions and should be precise with regards to quoting the exact date instead of referencing to the “first LCR reporting reference date”. However, the transitional provisions may also be considered for institutions which fall at the later point in time under the LCR rules (e.g. newly licenced credit institutions).
In this regards, the intention of the transitional provisions also when taking the explanatory text into account is unclear. We therefore ask to adjust, amend or delete the provisions in combination of the final text of paragraph 10 and de-pending of the intention of the transitional rule.
The format of Annex I indicates that the requirements already due since 2014 may have to be published dedicatedly in a form of a table as presented in Annex I. However, the table also could be understood as an additional summary of the items to be disclosed. All in all, the purpose of Annex I is still unclear to us.
As the qualitative description of a variety of items to be disclosed of Part 8 of Regulation (EU) 575/2013 is not predefined and therefore free format text as the usual form of disclosure we disagree to the potential requirement of fixing the format for liquidity information in a form of a table. We therefore recommend to EBA to clarify the purpose of Annex I or even better to withdraw Annex I as it is not adding new elements.
In this context we do not understand the purpose of Question 7.
With regards to Question 6 and 8 we refer to our generic comments in Part B of our response.
With regards to Question 6 and 8 we refer to our generic comments in Part B of our response.
As stated in Part B of our response we rather recommend to streamline and reduce the disclosure requirements than further enhance and increase the in-formation to be disclosed. As such, we strongly oppose any further amendments.
As described in Part B we strongly recommend instructions that non-relevant cells especially non-needed rows and columns do not need to be disclosed.
In general, credit institutions are obliged to report the LCR only on a monthly basis even though they are monitoring their liquidity situation daily. Thereby the fulfilment of minimum LCR requirements is warrantied by control mechanisms which do not always require daily LCR calculation. Although capabilities exist to do so, there is so far no need to execute the calculation on a daily basis. The validation of the LCR requirements on a daily basis may be done using raw data from treasury and accounting systems which are not 100% accurate on a daily basis and would not suit for reporting purposes. This in our view is nevertheless sufficient to monitor that minimum requirements are kept while being not sufficient for disclosure purposes.
As such, we strongly believe that the accuracy of the daily observed figures is not sufficient to fulfil disclosure obligations. This is in particular true on a consolidated level. Based on this we can not see any benefit from disclosing average figures based on daily observations but expect a massive cost increase.
As such, we strongly oppose the proposed approach. While the additional burden for small credit institutions seems not to be reasonable and proportionate to their risk profile the practical impact on larger banks/bank groups is also considered neither feasible nor reasonable.
Deutsche Börse Group