Question ID
2025_7536
Legal act
Directive 2002/87/EC (FiCOD)
Topic
Supervisory Reporting - FiCOD
Article
7 Risk concentration
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2022/2454 – ITS on the reporting of intra-group transactions and risk concentration for financial conglomerates
Article/Paragraph
ANNEX II - Instructions on reporting on intra-group transactions and risk concentration - Part II: Template-related instructions - Paragraph 7. “FC.06 Risk Concentration - Exposure by counterparties”, Point 7.1. “General remarks”
Type of submitter
Credit institution
Subject matter
Financial Conglomerates: Reporting of exposures by counterparty within the FC.06 template in light of the reference to “connected client groups” according to Article 4(1), point (39), of Regulation (EU) No 575/2013 and the response to Q&A “2025_7381"
Question

We are seeking clarification about a possible mismatch between ITS and DPM 3.5 (ID v22748_u - T1 L 06.00, column c0020) as part of the compilation of the template FC.06 Template - “Risk Concentration - Exposure by counterparties" within the FiCoD supervisory reporting.

In particular, Commission Implementing Regulation (EU) 2022/2454 of 14 December 2022 refers to Article 4(1), point (39), of Regulation (EU) No 575/2013 with reference to the concept of “group of connected clients” for the purposes of reporting in the FC.06 template Risk Concentration – Exposure by counterparties. 

If applied the alternative approach, this could require representing on separate rows cases where the same external counterparty simultaneously belongs to a group of connected clients whose parent entity is the central government, as well as to another group of connected clients, resulting in the loss of the uniqueness criterion for records based on the current DPM and the responses provided by the EBA in Q&A ID_2025_7381.

We therefore ask whether, for the purposes of reporting in the FC.06 template:

  1. the reference to Article 4(1), point (39), of Regulation (EU) No 575/2013 should be considered binding and, consequently, whether the FC0040 column “Name of the group (in case of group of counterparties)” should be regarded as a key value for the unique representation of exposures towards external counterparties
  2. in case of an affirmative answer, which would imply the repetition of the same exposures towards the same external counterparty across multiple rows of the FC.06 template, what the allocation criterion for the exposures across the rows should be.

Additionally, in case of an affirmative answer for the purposes of reporting in the FC.06 template, we ask what the allocation criterion for the exposures for the purpose of reporting in FC.07 is, as the application of this regulatory reference would imply considering the same exposures to the same external counterparty multiple times.

Background on the question

The Commission Implementing Regulation (EU) 2022/2454 of 14 December 2022 (the “Regulation”) states that, within the Template FC.06 - “Risk Concentration - Exposure by counterparties", the exposures must be reported for each individual legal entity belonging to the financial conglomerate, whereas the DPM 3.5 only permit reporting a unique value of the identification code of the external counterparty. 

According to the response provided by the EBA to Q&A ID_2025_7381, the modelling (DPM) of template L 06.00 - Risk Concentration - Exposure by counterparties will be amended by making four key value columns:

  • 0100 - ID code Type of the entity of the financial conglomerate
  • 0020 - Identification code of the external counterparty
  • 0030 - ID code type of the external counterparty
  • 0090 - ID code of the entity of the financial conglomerate

ensuring the uniqueness of all rows to be reported in this open row template when several entities of the financial conglomerate have exposures with the same external counterparty.

In the meantime, as an interim solution, in case more than one entity of the financial conglomerate has exposures with a specific external counterparty, entities have to report in column 0020 - Identification code of the external counterparty a merged version of the IDs in scope for:

  • 0020 - Identification code of the external counterparty and
  • 0090 - ID code of the entity of the financial conglomerate, 

by that creating a unique value for all rows reported in this template.

However, the “Regulation” states also that, within the Template FC.06 - “Risk Concentration - Exposure by counterparties", for reporting purposes the terms “group of connected counterparties” and “group of counterparties” are deemed to be equivalent to “group of connected clients” according to Article 4(1), point (39), of Regulation (EU) No 575/2013 (ref: ANNEX II - Instructions on reporting on intra-group transactions and risk concentration, Part II - Template-related instructions, Paragraph 7. - FC.06 Risk Concentration - Exposure by counterparties, Point 7.1. - General remarks).

The reference to Article 4(1), point (39), of Regulation (EU) No 575/2013, if applied, prescribing the following: 

“[…] Notwithstanding points (a) and (b), where a central government has direct control over or is directly interconnected with more than one natural or legal person, the set consisting of the central government and all of the natural or legal persons directly or indirectly controlled by it in accordance with point (a), or interconnected with it in accordance with point (b), may be considered as not constituting a group of connected clients. Instead the existence of a group of connected clients formed by the central government and other natural or legal persons may be assessed separately for each of the persons directly controlled by it in accordance with point (a), or directly interconnected with it in accordance with point (b), and all of the natural and legal persons which are controlled by that person according to point (a) or interconnected with that person in accordance with point (b), including the central government.”

would consequently imply the loss of uniqueness of all rows to be reported in cases where the same external counterparty simultaneously belongs to a group of connected clients whose parent entity is the central government, as well as to another group of connected clients.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the issue it raises is beyond the remit of the Q&A process and as such it cannot be addressed via a Q&A. The objective of the Q&A tool is not to answer questions that would require such a modification of either legal text or of the DPM in order to address the question.

The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.

For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.

Status
Rejected question