30 October 2013
The European Banking Authority (EBA) published today its final implementing technical standards (ITS) on reporting for asset encumbrance. These ITS, which will be part of the EU Single Rulebook in banking, provide reporting templates and instructions with the ultimate aim of ensuring harmonised reporting of asset encumbrance across institutions.
In particular, the objective of these ITS is to provide supervisory authorities with a standardised and harmonised framework for reporting purposes on the level of asset encumbrance in institutions. These ITS on asset encumbrance complement the existing reporting framework (COREP and FINREP) submitted for endorsement to the European Commission on 26 July 2013.
These ITS consist of three parts:
A legal text which outlines both the frequency and the proportionality criteria in the reporting;
A detailed definition of asset encumbrance, reporting templates, instructions and extensive information to assist institutions in the implementation of their reporting activities on asset encumbrance.
A data point model (DPM) and validation rules providing a structured representation of the requested data. The DPM contains all of the relevant technical specifications necessary for developing information technology reporting formats, as well as common dictionaries of terms that can be used in the institutions' databases.
The development of these ITS has taken into account the proportionality principle in order to ease the reporting burden on smaller institutions which have no material levels of asset encumbrance in light of the of lower complexity of their business models.
Legal basis and next steps
These final ITS have been developed in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (colloquially known as Capital Requirements Regulation or CRR).
The final standards have been sent today to the European Commission for their adoption as EU Regulations that will be directly applicable throughout the EU.
The reporting of asset encumbrance shall be implemented on 30 June 2014 by large institutions with assets above 30bn€ and on 31 December 2014 by all other institutions.
The next step will be the development of a set of guidelines on asset encumbrance disclosure that will provide clear and consistent standards in this area. The EBA expect to publish a Consultation Paper on these guidelines in coming months. The final version will be published in June 2014 and reviewed after one year. This review will then form the basis for the binding technical standards on more extensive disclosure that the EBA will have to develop by 2016.