FIN-FSA Amends Rules on Risk Reporting by Credit Institutions
FIN-FSA issued revised Regulations and Guidelines 1/2014 on risk reporting by credit institutions wherein the scope of the regulations and guidelines has been expanded to cover all credit institutions. Consequently, new reporting institution categories have been added to the credit risk reporting (S reporting) and interest rate reporting (R reporting). Submission of supervisory information using the S, R, and loan-to-value (LTC) tables has also been amended. In addition, the largest counterparty reporting (V reporting) obligations have been repealed, effective immediately, as the corresponding information is sufficiently available from the COREP 27.00 and 28.00 reports. The regulations and guidelines specify the changes that are valid from January 01, 2021 and January 01, 2022.
New reporting institution categories added to the S reporting include categories on financing institutions, such as foreign branches (Category 210), consolidation group of financing institution (Category 214), and branch of foreign credit institutions engaged in other than deposit bank activities in Finland (Category 222). Categories 210 and 214 have been added to R reporting and Category 211 (on financing institution excluding foreign branches) to LTC reporting. Reporting institution categories of reporting obligations have been simplified and clarified such that reporting always takes place in the highest reporting institution category of a consolidation group or amalgamation. Thus, the reporting institution Category 202 on deposit banks, excluding foreign branches, has been removed from S reporting while Category 205 on consolidation group of deposit bank has been added as a new reporting institution category in R reporting. In connection with the changes, certain technical improvements have been made to the wording and systematics of the regulations and guidelines. Amendments to the submission of supervisory information using the S and R tables include the following:
- Supervised entities must submit to FIN-FSA the S and R tables in accordance with the Financial sector’s reporting map.
- Supervised entities must report to FIN-FSA, using the S and R tables, the information that is based on information specified in Annexes III (FINREP templates) and V (Instructions on FINREP) of the Commission Implementing Regulation 680/2014 on supervisory reporting.
- Supervised entities that are the parent undertaking of a consolidation group must report information on a consolidation basis (reporting institution category 205 or 214). The reporting obligation does not apply to the parent undertakings of a sub-consolidation group. No other supervised entity belonging to a consolidation group need report the information.
- If the supervised entity does not belong to a consolidation group, the supervised entity must report the information referred to on a solo basis (reporting institution category 201 or 210).
- The central body of an amalgamation of deposit banks must report information on an amalgamation level (reporting institution category 260). No other entities belong to an amalgamation need report the information.
- Branches of foreign credit institutions engaged in credit institution activity in Finland must report only the S reporting information. The information is reported on a solo basis (reporting institution category 221 or 222).
- The S and R reports must be submitted on a quarterly basis, as at March 31, June 30, September 30, and December 31. S reports must be submitted to FIN-FSA within 30 business days and the R reports within 20 business days of the reporting date.
FIN-FSA also published a summary of the feedback received about the regulations and guidelines. Based on the feedback received, FIN-FSA decided to postpone the expansion of the information content of regular LTC reporting to a later date. This way, the changes will cause as little disruption as possible to supervised entities’ information system projects.
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Effective Date: January 01, 2021/January 01, 2022
Keywords: Europe, Finland, Banking, Reporting, Credit Risk, Interest Rate Risk, COREP, FINREP, CRR, LTV, FIN-FSA
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