EC published Regulation 2020/429 that amends the Regulation 680/2014, which sets out implementing technical standards on supervisory reporting of institutions under the Capital Requirements Regulation or CRR (575/2013). The key amendments in Regulation 2020/429 relate to reporting on securitization positions, IFRS 16 on leases, non-performing exposures, and liquidity. This Regulation is based on the draft implementing technical standards submitted by EBA to EC. Regulation 2020/429 shall enter into force on the day following that of its publication in the Official Journal of the European Union.
Regulation 2017/2402 had set up a new framework for securitization, including a specific framework for simple, transparent, and standardized (STS) securitizations. It established preferential treatment for STS securitizations and certain micro, small, and medium-size enterprise (SME) synthetic securitizations. Regulation 2017/2042 also set out a framework for a more risk-sensitive regulatory treatment of exposures to securitizations. Regulation 2020/429 is now amending Regulation 680/2014 to accommodate the reporting on securitization positions to this new securitization framework. The new EU securitization framework became fully applicable on January 01, 2020 after the expiration of transitional provisions. Therefore, the revised reporting requirements on own funds and own funds requirements set out in Regulation 2020/429 shall apply from March 30, 2020. The revised reporting requirements set out in Annexes III to V of Regulation 2020/429 shall apply from June 01, 2020. Additional amendments to Regulation 680/2014 include the following:
- Regulation 1126/2008 was amended by Regulation 2017/1986 to bring it in line with the IFRS 16 on leases and Regulation 680/2014 is now being amended to reflect those amendments.
- Regulation 2020/429 is revising the reporting requirements for nonperforming exposures with the aim to strengthen the ability of competent authorities to assess and monitor non-performing exposures by collecting more granular information on those exposures on a recurring basis and to close identified data gaps.
- Regulation 680/2014 is being amended to reflect, in the reporting framework, amendments of the liquidity coverage requirements for credit institutions. The provisions of Regulation 2020/429 concerning liquidity reporting shall apply from April 01, 2020.
- Templates and instructions of Regulation 680/2014 have been reviewed to reassess the convenience and appropriateness of the memo items included in the templates and instructions during the early years of implementation of the regulation as well as to correct typos, erroneous references, and formatting inconsistencies that were discovered in the course of its application.
Effective Date: March 31, 2020
Keywords: Europe, EU, Banking, Securities, Securitization, Reporting, CRR, NPE, STS Securitization, Regulation 2020/429, Regulation 680/2014, Basel, IFRS 16, Leases, Liquidity Risk, EC
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