- Do the requirements in Commission Delegated Regulation (EU) 2016/1712 only apply to financial contracts resulting in a liability which could be subject to bail-in under resolution, rather than all assets and liabilities?
- Are there any expectations on the format/method of submission for the information if/when requested (i.e. excel, CSV, other)?
Please could you provide further clarification on the following requirements set out in 'Regulatory technical standards specifying the minimum set of the information on financial contracts that should be maintained in detailed records of financial contracts' (EU 2016/1712; supplementing Directive 2014/59/EU):
Annex- Section 1 — Parties to the financial contract:
- (1) Record keeping timestamp: should this reflect the date and time of running the report to collate the records of financial contracts, or the date when the contract was entered into?
- (5) ID of the other counterparty: can this field be left blank for instruments where this information is not freely available (i.e. bonds sold through brokers / secondary markets)?
- (13) Core business lines: is the intention that this should relate to the business area entering into the financial contract (e.g. Group Treasury), or the business line which the contract has been entered into on behalf of (e.g. Savings or Mortgages)?
- (14) Value of the contract: if information is already reported to a trade repository (e.g derivatives through EMIR), does it still need to be replicated in reporting for (EU) 2016/1712?
Clarification of the above points is required prior to developing an appropriate reporting mechanism / tool to collate the required information in order to implement the requirements under Commission Delegated Regulation (EU) 2016/1712.
The requirements set out in Commission Delegated Regulation (EU) 2016/1712 apply to financial contacts as defined in Article 2(1)(100) of Directive 2014/59/EU (BRRD), which include various types of securities contracts, commodities contracts and swap agreements. These requirements are not limited to financial contracts resulting in a liability which could be subject to bail-in under resolution.
Although the request of the resolution authority to transmit information on financial contracts pursuant to Article 2(2) of Commission Delegated Regulation (EU) 2016/1712 might be limited to certain types or categories of financial contracts, an institution which is required to maintain detailed records of financial contracts under Article 1 Commission Delegated Regulation (EU) 2016/1712 is obliged to retain on an ongoing basis the minimum set of information for each financial contract in its records pursuant to Article 2(1) of Commission Delegated Regulation (EU) 2016/1712.
As to the format of submission of the information, the RTS does not specify a format for information submission. The relevant national authority or national legislation may, however, require submissions in a specific format.
As for the further clarification requested on terms in Annex 1, it is observed that the record keeping timestamp under point 1 refers to the date the contract was entered into the record. As regards point 5, information of the ID of the counterparty needs to be provided. The counterparty in this context is the issuer of the instrument, which is information that should be available. For point 13, the business line for which the contract has been entered into (e.g. which is the beneficiary of the contract) should be provided. As regards point 14 it is observed that for the sake of completeness the value of the contract should be provided even if this information is already reported to a trade repository.
Annex 1 point 1 of the Commission Delegated Regulation (EU) 2016/1712 explicitly refers to the “Date and time of record entry”.
*The answer was amended on 17/12/2019. The intitial first paragraph was deleted.