FCA Issues Letter to CEOs on Quality of Prudential Regulatory Returns

FCA uses regulatory returns to assess prudential risk and to understand business models, financial positions, and risk exposures of firms, in addition to identifying trends within and across sectors. In its letter, FCA has identified the most common issues observed with returns, which are:

• Failure to complete the underlying templates within the common reporting framework (COREP) submissions, due to inadequate understanding of the prudential rules
• Failure to submit certain returns, such as the financial reporting return
• Incorrectly calculated total sum of risk exposures across various risk categories (for example, market and credit risks), leading to an inaccurate figure for capital requirements of firms
• Inconsistency in COREP returns—EBA validation rules dictate that certain data points submitted across different templates within COREP should show identical values or equal the sum of a number of other values
• Reporting using incorrect units
• Not reporting cumulatively (on a year-to-date basis) on the FSA002 income statement

Related Link: FCA Letter (PDF)

Keywords: Europe, UK, Securities, Reporting, COREP, Prudential Returns, FCA