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 Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.
The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.