Question ID
2026_7843
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory reporting - FINREP (incl. FB&NPE)
Article
430
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions
Article/Paragraph
Annex V
Type of submitter
Other
Subject matter
Sectoral classification of UK credit institutions
Question

In the context of FINREP reporting, institutions are required to apply counterparty sector classifications as laid down in Annex V to Regulation (EU) No 680/2014.

Following the withdrawal of the United Kingdom from the European Union, banks established in the UK are considered third‑country institutions and are no longer subject to the CRR/CRD framework. This has raised interpretative questions regarding their appropriate sectoral classification as counterparties in FINREP, in particular when ensuring consistency across EU supervisory reporting frameworks.

 


 

Background on the question

From a regulatory and reporting perspective, the following interaction with other frameworks is relevant:

1. Large Exposures (CRR)

    • Pursuant to Article 107(4) CRR, exposures to institutions shall be identified based on the definitions applicable under the prudential framework.

    • Article 391 CRR further refers to the scope and treatment of exposures to institutions for large exposure purposes.

Under these provisions, third‑country banks are not treated as EU credit institutions, which implies that exposures to UK banks are not classified as exposures to institutions for large exposure reporting purposes.

2. AnaCredit

    • Within the AnaCredit framework, counterparties are classified based on the statistical definition of Monetary Financial Institutions (MFIs) as set out in ECB Regulation (EU) No 1071/2013 (ECB/2013/33).

    • UK banks, as third‑country entities, do not fall under the EU MFI population and are therefore not classified as credit institutions for AnaCredit reporting purposes.

Against this background, a consistency‑oriented approach across reporting frameworks (FINREP, Large Exposures and AnaCredit) would indicate that UK banks should not be reported as “credit institutions” in FINREP, but rather under the residual category of "Other financial institutions / Other financial corporations".

However, Annex V to Regulation (EU) No 680/2014 refers to the ESA 2010 sector classification (S.122), under which deposit‑taking corporations are classified solely based on their economic activity without an explicit EU/third‑country distinction.

Question to the EBA:

In light of the above, we kindly request clarification on the following points:

1. FINREP classification principle

For the purposes of FINREP reporting, should the sectoral classification of UK banks as counterparties follow:

    • a strictly ESA 2010‑based (functional) approach, under which UK banks would continue to be classified as credit institutions, or

    • a consistency‑oriented approach aligned with the treatment of UK banks under the Large Exposures framework (Articles 107(4) and 391 CRR) and AnaCredit (ECB Regulation (EU) No 1071/2013)?

2. Role of third‑country status

Does the third‑country status of a bank have relevance for its classification as a “credit institution” under FINREP, particularly in view of supervisory expectations regarding cross‑framework consistency?

3. Supervisory consistency expectation

Is it expected from a supervisory perspective that institutions apply a harmonised counterparty sector classification for UK banks across FINREP, AnaCredit and Large Exposures, even if this implies a deviation from a purely functional ESA 2010 interpretation within FINREP?

A clear supervisory position on this matter is essential to ensure consistent, transparent and audit‑proof implementation of supervisory reporting requirements and to avoid systematic classification inconsistencies of the same counterparty across EU reporting frameworks.

Submission date
Final publishing date
Final answer

In IT solutions (Annex V. Part 1.42(c)) to Regulation (EU) 2024/1623 , 'credit institutions' are defined as following:

'Any institution covered by the definition in point (1) of Article 4(1) CRR (‘undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account’) and multilateral development banks (MDBs)'.

The aforementioned Finrep definition of 'credit institutions' is based on the economic activities of the counterparty, rather than on the application of the CRR/CRD framework. Therefore, third-countries institutions may be covered by this definition, although they are not subject to the CRR/CRD framework or a third country equivalent regime.

For large exposures reporting, the IT solutions (Annex IX. Part 2, paragraph 5.1) refers to Finrep, Annex V, Part 1, paragraph 42 to report the sector of the counterparty in column 0050 of template C 27.00. This means that a consistent counterparty breakdown should be applied in both reporting framework.

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.

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