As part of the questions and answers (Q&A) on AnaCredit, ECB clarified the sector classification of investment firms authorized as credit institutions and the type of instruments that should be reported under the AnaCredit Regulation in the case of instruments extended to investment firms. The new Q&A extend and complement the clarifications already provided in the AnaCredit Manual Part II.
Modification of the definition of a credit institution in the Capital Requirements Regulation (CRR) as a result of Article 62(3)(a) of the Investment Firms Regulation (IFR) implies that investment firms which pose significant risks to financial stability will become part of the AnaCredit reporting population once they have been authorized by the competent authority as credit institutions. However, even if they have been authorized as credit institutions, investment firms which do not carry out business under Article 4(1)(1)(a) of the amended CRR should not be treated as monetary financial institutions (MFIs), because they do not belong to any MFI subsector—that is, central bank (S.121), deposit-taking corporations except the central bank (S.122), and money market funds (S.123). Consequently, for the purposes of institutional sector classification under AnaCredit investment, firms that do not carry out business under Article 4(1)(1)(a) of the amended CRR will continue to be classified as “Other financial intermediaries,” even if they have been authorized by the competent authorities as credit institutions.
AnaCredit Manual II clarifies that for AnaCredit reporting agents that are investment firms which meet any of points (b)(i) to (b)(iii) of Article 4(1)(1) but not point (a), the institutional sector of the reporting agent is “Other financial intermediaries” (S.125). Such institutions are non-MFI credit institutions. Meanwhile, credit institutions that meet the conditions referred to in Article 4(1)(1) in point (a) of the amended CRR are classified in the S.122 institutional sector as MFI credit institutions. Similarly, an investment firm authorized as a credit institution is classified as an MFI credit institution in the S.122 institutional sector, provided it conducts the business referred to in both point (a) and point (b) of Article 4(1)(1) of the amended CRR.
Additionally, AnaCredit Manual Part II clarifies that the type of instrument “deposits other than reverse repurchase agreements” covers any type of deposit or loan (except those that meet the definition of a reverse repurchase agreement) where the debtor is a monetary financial institution. In line with the clarifications related to sector classification, credit extended to investment firms which are non-MFI credit institutions should not be classified as deposits under AnaCredit. Meanwhile, credit other than reverse repurchase agreements extended to investment firms that conduct business under both Article 4(1)(1)(a) and Article 4(1)(1)(b) of the amended CRR and that are, therefore, classified under the S.122 institutional sector as “MFI credit institutions,” is reported to AnaCredit as “deposits other than reverse repurchase agreements.”
- Q&A on Sector Classification of Investment Firms
- Q&A on Reporting of Instrument Under AnaCredit
- AnaCredit Q&A Notification
Keywords: Europe, EU, Banking, Investment Firms, CRR, Basel, AnaCredit, IFR, Reporting, Q&A, Reverse Repurchase Agreement, AnaCredit Manual, ECB
Previous ArticleEBA Publishes Single Rulebook Q&A Updates for June 2021
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.