Question ID:
2014_1528
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Supervisory reporting - FINREP (incl. FB&NPE)
Article:
99
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph:
Annex V, par. 17.107 Geographical breakdown
Disclose name of institution / entity:
No
Type of submitter:
Credit institution
Subject Matter:
Definition of "location"
Question:

Does the definition of "locations" pertains to the location of the reporting institution itself or to location of its customers, eg. debtors?

Background on the question:

According to the ITS on Supervisory Reporting ‘Location’ means the jurisdiction of incorporation of the legal entity which has recognized the corresponding asset or liability; for branches, it means the jurisdiction of its residence." Does this definition pertain to the location of the reporting institution itself or to location of its customers? Example: if a bank (the reporting institution) is located in country X and operates only in this country, but has also borrowers from other countries, should the loans granted to the borrowers from other countries be reported as "domestic activity" or "non-domestic activities"?

Date of submission:
09/10/2014
Published as Final Q&A:
05/03/2021
EBA Answer:

Paragraph 270, Annex V, Part 2 of Commission Implementing Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) states that, for the purposes of templates from F 20.01 to F 20.03:

[…] location’ means the jurisdiction of incorporation of the legal entity which has recognised the corresponding asset or liability; for branches, it means the jurisdiction of its residence. For these purposes, ‘domestic’ shall include the activities recognised in the Member State where the reporting institution is located.

The definition above thus stipulates that location shall mean the jurisdiction of incorporation of the (non-branch) legal entity which has recognised the corresponding asset or liability.

 

This means that, in a cross-border banking group, a reporting institution shall recognise as “domestic”:

 

  • all assets and liabilities pertaining to its own non-consolidated accounts; and
  • all assets and liabilities pertaining to the non-consolidated accounts of its controlled institutions incorporated within the same jurisdiction.

 

Conversely, the reporting institution shall recognise as “non-domestic” all assets and liabilities pertaining to the non-consolidated accounts of its controlled institutions incorporated in different jurisdictions.

 

For branches, the jurisdiction of incorporation is substituted with the jurisdiction of its residence for the purposes of the determination of the “location”.

 

In the example provided, if the bank is an institution incorporated in jurisdiction X, it shall recognise as domestic the loans granted to the borrowers from other countries.

It should be noted that, for the purposes of templates from 20.04 to 20.07, information country-by-country shall be reported on the basis of the residence of the immediate counterparty (paragraphs 271, Part 2 and 43, Part 1, Annex V of ITS on Supervisory Reporting).

Status:
Final Q&A
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