What should drive the domestic-non domestic distinction for COREP template 4.0 row 850 for the consolidated reporting of an institution with a holding company that is resident in another member state?
COREP definition of non-domestic according to Annex II of the ITS: “Exposures shall be deemed to be domestic where they are exposures to counterparties located in the Member State where the institution is located” Finrep reporting instruction from Annex V of the ITS: “107. Template 20 shall be reported when the institution exceeds the threshold described in Article 5.1(a)(iv). The geographical breakdown by location of the activities in templates 20.1 to 20.3 distinguishes between “domestic activities” and “non-domestic activities”. “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. For these purposes, “Domestic” shall include the activities recognised in Member State where the institution is located. 108. Templates 20.4 to 20.7 contain information “country-by-country” on the basis of the residence of the immediate counterparty. The breakdown provided shall include exposures or liabilities with residents in each foreign country in which the institution has exposures. Exposures or liabilities with supranational organisations shall not be assigned to the country of residence of the institution but to the geographical area “Other countries”.” Note that there a relevant Q&A is published by EBA (See link below): http://www.eba.europa.eu/single-rule-book-qa/-/qna/view/publicId/2013_330
The general treatment of requirements on a consolidated basis is laid down in Article 11 of Regulation (EU) No 575/2013 (CRR). According to Article 11 (2) of CRR institutions controlled by a parent financial holding company or a parent mixed financial holding company in a Member State shall comply with the obligations laid down in Parts Two to Four and Part Seven of the CRR on the basis of the consolidated situation of that financial holding company or mixed financial holding company.
In accordance with the instructions for row 850 of template C 04.00 of Annex II to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting), the distinction between domestic and non-domestic shall be made considering the institution´s country as country for the domestic exposures. See also QA 2019 4640.