How should we understand that reporting requirement?
More information is needed in order to know how these exposures have to be reported. In the Large Exposure report we have to report single entities or groups of connected clients. For this reporting requirement we should also report groups of connected clients. However, in a group there can be one or more “institutions” and/or “unregulated financial sector entities” and/or customers which do not belong to one of these two groups. So, which exposures are relevant in order to determine the 10 largest institutions/unregulated financial sector entities?
The type of the counterparty of the 10 largest exposures to institutions and the 10 largest exposures to unregulated financial sector entities shall be specified in C 27.00 (LE 1), whereby "I" has to be reported for institutions and "U" for unregulated financial sector entities (see Annex IX of the
Draft ITS on Supervisory reporting , Instructions for Large Exposures Reporting, LE 1 template, column 070). The definition of the type of the counterparty for a group of connected clients should follow the answer provided for QA 2013_492.
The relevant exposure amount for determining the 10 largest exposures to institutions or unregulated financial sector entities being part of a group of connected clients is the aggregated, total amount of the exposures to all entities within the group of connected clients including exposures to entities within this group which are neither institutions nor unregulated financial sector entities (LE 2, column 210).
*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.