FIN-FSA Amends Rules and Guidelines on Reporting of Funding Plans

Amendments to FIN-FSA Regulations and Guidelines on Reporting of Funding Plans

In the updated EBA guidelines (EBA/GL/2019/05) on reporting of funding plans, the definitions and breakdowns have been aligned with those used in FINREP reporting. The guidelines introduce a more detailed breakdown of market-based funding according to seniority, along with certain simplifications for small and non-complex institutions to enhance proportionality. According to the updated guidelines, the first reporting reference date is December 31, 2020, with the deadline for submitting the reports set for March 15, 2021. The FIN-FSA regulations and guidelines have been revised as follows:

• Paragraph (1) of section 2.2 referring to the EBA guidelines on the reporting of funding plans (EBA/GL/2019/05) has been amended, and a new paragraph (2) has been added to the section.
• A new section 2.3 on the decision of ECB has been added, and as a result the numbering of section 2.4 has changed.
• The reporting period under paragraph (4) of section 3.1 has been changed. It states that supervised entities shall submit the data collection concerning funding plans in accordance with the EBA guidelines (EBA/GL/2019/05) on an annual basis. Credit institutions shall submit the reports on their funding plans in accordance with these guidelines by March 15, with the reporting reference date being December 31 of the previous year.

The FIN-FSA regulations and guidelines 6/2014 apply to credit institutions which are identified as significant institutions in accordance with the criteria provided in the Regulation on the Single Supervisory Mechanism (SSM Regulation) and the SSM Framework Regulation, and which hence fall within the scope of direct supervision by ECB. This scope of application fulfills the recommendation of the ESRB that the data collection be applied to credit institutions covering at least 75% of the banking system’s total consolidated assets. 

Preparedness Plans

FIN-FSA is requesting all entities under the preparedness obligation to draw up an entity-specific plan on how to ensure or intend to ensure the operability of critical services from an end-customer to an end-customer in circumstances where foreign service provision is completely unavailable. FIN-FSA announced that the Ministry of Finance is developing a regulation on the preparedness of the financial markets to be more unambiguous and better aligned with the requirements of the current operating environment. The entity-specific plan must describe, for example, how it is ensured that the payer is able to submit a payment order to its payment service provider and how the payment service provider processes the payment and transfers the payment to the payee's payment service provider and on to the payee's account. The plan must be based on a scenario where no inter-entity or entity-internal payment or securities system, function or data warehouse located abroad is available for months. The preparedness plan must be clear and detailed enough to enable the assessment of its feasibility and regulatory compliance. If the report includes actions to be taken in the future, their schedule and content must be presented in exact terms. The plans submitted to the FIN-FSA will be assessed by financial market authorities responsible for preparedness issues—that is, the Ministry of Finance and the Bank of Finland together with the FIN-FSA. 

Related Links

• Press Release on Amendments to Regulations and Guidelines 6/2014
• Press Release on Macro-Prudential Decisions
• Press Release on Preparedness Plans
• Regulations and Guidelines 6/2014 (PDF)
• EBA Guidelines on Reporting of Funding Plans
• Decision on CCyB and Maximum LTC Ratio (PDF)

Keywords: Europe, Finland, Banking, Securities, COVID-19, Reporting, Funding Plans, FINREP, Proportionality, CCyB, Loan to Collateral Ratio, Macro-Prudential Instruments, Credit Risk, Systemic Risk Buffer, Preparedness Plan, Operational Risk, Eesti Pank, Basel, FIN-FSA