Question ID:
2016_2888
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Supervisory reporting - Large Exposures
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 VIII
Disclose name of institution / entity:
No
Type of submitter:
Credit institution
Subject Matter:
Reporting of of the group of connected clients in C27 Identification of the counterparty (LE1) when the national reporting system DOES NOT provide a unique code for the group of connected clients
Question:

It is unclear if the group of connected clients should be reported in C27 Identification of the counterparty (LE1) when the national reporting system DOES NOT provide a unique code for the group of connected clients.

Background on the question:

First sentence of COMMISSION IMPLEMENTING REGULATION (EU) 2015/1278 indicates: “Institutions shall report the identification of any counterparty for which information is being submitted in any of the templates C 28.00 to C 31.00”. By reading this we understand clearly that C27 should contain all counterparties (group or individual and without any exception), which are reported somewhere in templates C28 to C31. Second sentence indicates: “The identification of the group of connected clients shall not be reported, unless the national reporting system provides a unique code for the group of connected clients.” In case the national reporting system DOES NOT provide a unique code for the group of connected clients, we understand the group of connected clients should not be reported in C27. It is the contrary of the requirements from the above first sentence. In case the conclusion is C27 should contain all counterparties (group or individual) which are reported somewhere in templates C28 to C31, could you please clarify what is the meaning of the second sentence? In case the conclusion is to not report group of connected clients in C27 when the national reporting system DOES NOT provide a unique code for the group of connected clients: 1. The wording of first sentence should be reviewed because it is misleading and every reader can have his own interpretation which is not aligned with the goal of uniform reporting through EU. 2. If a bank in Luxembourg is doing large exposure reporting, with: a. Exposures to a group incorporated in Luxembourg and in Luxembourg there is no national reporting system providing a unique code for the group of connected clients, then the group should not be reported in C27 b. Exposures to a group incorporated in Germany and in Germany a national reporting system provides a unique code for the group of connected clients, then the group should be reported in C27 Is that correct? For reporting in C27 of “pure” individual (not part of a group) and individual part of a group, we understand they must be always reported in C27, no matter of the existence or not of a national reporting system. Is it correct? An illustrative example for all those question would warmly welcome. NB: There are several Q&A related to this question (2014_1562 - 2014_701 - 2014_1080) , but they are from 2013-2014 and since answers have been provided the regulation have been amended several times.

Date of submission:
02/09/2016
Published as Final Q&A:
05/03/2021
EBA Answer:

According to the instructions on columns 010-070 (counterparty identification) of template C 27.00 of Annex VIII to Regulation (EU) No 680/2014 as amended by Regulation (EU) 2015/1278 (ITS on Supervisory Reporting) which are provided in Annex IX of the ITS on Supervisory Reporting, ‘institutions shall report the identification of any counterparty for which information is being submitted in any of the templates C 28.00 to C 31.00. The identification of the group of connected clients shall not be reported, unless the national reporting system provides a unique code for the group of connected clients.’

 

While the first sentence establishes a general rule, the second sentence provides an exception from that general rule. This is due to the fact that the code provided in c010 of C 27.00 is a row identifier and must be unique for each row in the table (see instruction on c010 of C 27.00 in Annex IX and validation rule v3995_u).

 

The consequence of this is the following:

  • The identification of individual clients to which an institution has an exposure always has to be reported in template C 27.00, whether this individual client forms part of a group of connected clients or not. Codes for individual clients are usually available in national reporting systems.
  • The identification of groups of connected clients only has to be reported in C 27.00 under certain circumstances: If the national reporting system does not provide a unique code for the group of connected clients – hence the code used to identify this group would be same as the one used for the parent / most significant entity at individual level (see also Q&A 2014_1080) –, this group of connected clients shall not be reported in C 27.00 at all.

Whether the identification of a group of connected clients is separately reported in C 27.00 or not, exposures to this group of connected clients and entities belonging to it have to be reported in templates C 28.00, C 29.00, C 30.00 and C 31.00, as applicable, and identified according to the instructions provided for the respective columns of those templates.

 

The instructions will be modified to indicate that the identification of a group of connected clients to which an institution has an exposure shall be reported only in the following two cases: a) the national reporting system provides a unique code for the group of connected clients or b) the national reporting system does not provide a unique code for the group of connected clients, and the institution does not have an exposure to the parent / most significant entity of the group of connected clients.

 

 

With regard to the example mentioned in the background to the question, the decisive fact is whether the reporting system of the competent authority the institution is reporting to provides a unique code for groups of connected clients, not whether such a unique identifier is used in the country where the counterparty is located.

Thus, an institution located in Luxemburg

  • reports neither the group of connected clients incorporated in Luxembourg nor the one incorporated in Germany in C 27.00, if the reporting system of Luxembourg’s competent authority does not provide a unique code for groups of connected clients respectively
  • reports both groups of connected clients in C 27.00, if the reporting system of Luxembourg’s competent authority provides a unique code for groups of connected clients.
Status:
Final Q&A
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