Institution shall start reporting information subject to thresholds from the next reporting reference date where they have exceeded the threshold on two consecutive reporting reference dates. Is our understanding correct that if an institution exceeded the thresholds as of December 31 an September 30 the first reporting should be submitted for the reference date December 31? Institutions may stop reporting information subject to thresholds from the next reporting reference date where they have fallen below the relevant thresholds on three consecutive reporting reference dates. Based on the same methodology we assume that if an institution has fallen below the thresholds as of December 31, September 30 and June 30 no reporting is required as of December 31. Is our understanding correct?

Information is necessary in order to properly calculate the reporting thresholds.

Article 4 of the Regulation (EU) No 680/2014 13 ITS on supervisory reporting of institutionsDraft ITS on Supervisory reporting  states that

1. Institutions shall start reporting information subject to thresholds from the next reporting reference date where they have exceeded the threshold on two consecutive reporting reference dates.

2. For the first two reporting reference dates on which institutions have to comply with the requirements of this Regulation, institutions shall report the information subject to thresholds if they exceed the relevant thresholds on the same reporting reference date.

3. Institutions may stop reporting information subject to thresholds from the next reporting reference date where they have fallen below the relevant thresholds on three consecutive reporting reference dates.

In practical terms:

• If a threshold was exceeded for 30 September and again for 31 December, then the next reporting period is 31 March, so that is when the new reporting requirement would become applicable (in other words, 31 March is the next reference date).
• If the institution had fallen below the reporting threshold for 30 June, 30 September and 31 December, then reporting would cease as at 31 March (i.e. the next reference date after 31 December).

• However under article 4.2 there is a commencement provision, according to which a different framework is set for the first two reporting reference dates (31 March and 30 June 2014 for COREP, and 30 September and 31 December 2014 for FINREP). According to this, for example, if an institution exceeds a threshold in March 2014, related to COREP, then the institution is expected to report immediately as of 31 March 2014. Similar provisions apply for the first reporting required under other reporting framework within the ITS, such as FINREP.

*As of 1/8/2014 the content of this answer was modified to reflect the publication of the final ITS on supervisory reporting of institutions in the Official Journal of the European Union. As a result, the references to the ITS were updated and the disclaimer deleted. For reasons of transparency, revisions are highlighted in track changes.