SARB Issues Directive on Completion of Operational Risk Reporting Form
SARB issued a Directive (D6/2020) on the completion and submission of return for operational risk for banks. The Directive specifies that banks, controlling companies, and branches of foreign institutions are required to submit to the Prudential Authority the quarterly form BA 410. The form must be submitted 20 working days after each relevant quarter-end on a bank solo basis and 30 working days after each relevant quarter-end on a bank consolidated and controlling company consolidated basis. The Directive D6/2020 replaces Directive 11 of 2013 and Directive 5 of 2018.
Form BA 410 is intended to obtain selected information for, among other things, the bank’s loss event types, recorded gross losses, and recovery of losses, based on specified business lines and loss event types. Regulation 34(2) of the Regulations relating to Banks sets out the purpose of the form BA 410 for a bank that adopted the advanced measurement approach (AMA) for the calculation of its minimum required amount of capital and reserve funds in respect of operational risk. In addition, as part of its supervisory processes, the Prudential Authority also requested banks that adopted the standardized approach (TSA) and the alternative standardized approach (ASA) for the calculation of its required amount of capital and reserve funds in respect of operational risk to complete and submit the form BA 410.
In accordance with the provisions of regulation 34(3) of the Regulations relating to items 1 to 63, banks must apply a minimum gross loss threshold amount of ZAR 10,000 for reporting purposes. Only losses that fall within the definition of operational risk losses specified in the Regulations, excluding credit boundary events, must be recorded and reported on the Form BA 410. In accordance with the provisions of regulation 34(3) of the Regulations relating to items 64 to 75, banks must apply a gross loss threshold amount of ZAR 5 million for reporting material operational risk losses. Banks may, after consultation with the Prudential Authority, use a lower threshold should they so wish.
Related Link: D6/2020 (PDF)
Keywords: Middle East and Africa, South Africa, Banking, Operational Risk, Reporting, D6/2020, BA 410, SARB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
Bundesbank Updates Supporting Information for SHS ReportingRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BaFin Consults on Resolvability Requirements for Resolution Planning
The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.
EBA Consults on Certain Standards and Guidelines Under CRR and BRRD
The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.
OJK Publishes Regulatory Updates for Financial Sector Entities
The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)
EU Publishes Rules on DLT and Data Governance
The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).
EBA Publishes Phase 2 of Reporting Framework 3.2
The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications
