BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates. Form ER is used to collect data on sterling business (outstanding and new) for deposits by, and loans and advances to, UK residents. BoE has updated Form ER definitions for the small and medium sized enterprise (SME) floating rate loan series referencing LIBOR- and SONIA-linked transactions. These series on Form ER (lines 50A1-50A3 and 101A2-101A4) will reference SONIA, rather than LIBOR/SONIA with effect from July 2020 reporting. Loans linked to similar reference rates should continue to be reported in these lines. Sterling LIBOR will be discontinued after the end of 2021. The update to Form ER definitions is being made ahead of this deadline to facilitate a smooth transition from LIBOR to SONIA.
For each of the sectors and instruments specified on Form ER, the effective interest rate is the average over all types of loans or deposits; over all types of customers and risks; and over business in that month. Intra-group balances should be excluded from Form ER as far as is possible (that is, where counterparty identification is readily available from source systems) as these can distort the rates reported. Reporters should notify BoE about their practice in respect to intra-group transactions. ER form reporting should be consistent with the Balance Sheet (Form BE/BT) definitions, the Income and Expenditure (Form PL) definitions, and the General Notes and Definitions—Accruals accounting and Section 16 (mortgage cash backs) unless specified. Apart from BoE, other known users of this information are the Office for National Statistics (ONS), Her Majesty’s Treasury (HMT), and ECB. Reporting institutions should note that euro-area central banks are required to provide average interest rate statistics to ECB. Form ER also takes into account the ECB requirements to reduce the burden on reporting institutions. Where BoE and ECB requirements are known to differ, the variation is identified in these notes. In some specified cases reporting institutions are permitted to provide ECB-consistent data if they prefer to do so.
Keywords: Europe, UK, Banking, Securities, Form ER, LIBOR, SONIA, Interest Rate Benchmarks, Reference Rates, Statistical Reporting, Benchmark Reforms, BoE
APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
ESMA announced that it will recognize three central counterparties (CCPs) established in the UK as third-country CCPs, from January 01, 2021.
PRA published Version 02.04 of the PRA110 liquidity metric monitoring tool (PRA110 LMM tool).
FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
EBA launched the seventh annual transparency exercise for banks in EU.
The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to 32 questions.
MAS published amendments to the Notice 652 on net stable funding ratio (NSFR), along with the related reporting template.
EC published the action plan to enhance the Capital Markets Union in EU over the coming years.