We wish to clarify whether, in exercising the discretion afforded to it in Article 99 (6) of the CRR, a competent authority may consult the EBA in order to extend the (new FINREP) reporting requirements outlined in Article 99 (2) to non-IFRS banks, but not to non-IFRS investment firms in its jurisdiction.
Article 99 (6) of the Regulation provides competent authorities the option to consult the EBA where it wishes to apply the Article 99 (2) financial reporting requirements to non-IFRS institutions. We do not believe it is appropriate for investment firms to fill out the new FINREP templates. We have our own version of the FINREP 2 templates which are tailored specifically for investment firms. It would be more beneficial for us to maintain the current financial reporting requirements in this regard.
Where a competent authority exercises the discretion foreseen in Article 99 (6) of Regulation (EU) No 575/2013/EU (CRR) and considers that financial information at consolidated level in Article 99 (2) is necessary to obtain a comprehensive view of the risk profile of the activities of, and a view of the systemic risk to the financial sector or the real economy posed by non-IFRS institutions, it shall consult the EBA on the extension of the reporting requirements to such institutions, provided that they are not already reporting on such a basis.
The discretion aims at providing a view on the risk profile of groups of institutions or even the financial sector / real economy rather than individual institutions. Accordingly the discretion should be applied to groups of institutions with similar risk profiles and/or posing similar systemic risk to the financial system or to the real economy.
At the same time, the discretion to extend FINREP reporting requirements at consolidated level to non-IFRS institutions applies only to institutions subject to Directive 86/635/EEC (the Bank Accounts Directive). If investment firms are included in the scope of the legislative rules implementing Directive 86/635/EEC (the Bank Accounts Directive) at national level the discretion in Article 99 (6) CRR could be applied to non-IFRS investment firms at consolidated level.
Furthermore, it should be noted that the discretion is only applicable to institutions (or a subset thereof) that do not already report on the basis of IFRS in line with Article 99 (2) and (3) of the CRR.