MFSA Issues New Banking Rule for COVID-19 Reporting and Disclosures
MFSA published a Circular for credit institutions on the issuance of a new Banking Rule BR/23 on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis. The new Banking Rule BR/23 will come into force with immediate effect. This recent communication clarifies expectations for both significant and less significant institutions. MFSA also published the reporting templates and instructions for COVID-19 data.
The rule intends to implement the provisions and requirements introduced by EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis (EBA/GL/2020/07). Through such implementation, the rule introduces additional reporting and disclosure requirements for credit institutions with respect to mitigating measures introduced in Malta to combat the negative economic consequences of the COVID-19 pandemic. Pursuant to such measures, credit institutions are obliged to report information, in accordance with the formats specified in the rule, on:
- Exposures that are subject to payment moratoria in accordance with the Moratorium on Credit Facilities in Exceptional Circumstances Regulations, 2020 (L.N. 142 of 2020) and the Central Bank of Malta (CBM) Directive No. 18 on Moratoria on Credit Facilities in Exceptional Circumstances
- Exposures that are subject to other forbearance measures introduced in response to the COVID-19 crisis
- Newly originated exposures subject to the Malta Development Bank COVID-19 Guarantee Scheme
Annex 1 to the rule provides credit institutions with the reporting templates, which are to be populated for submission to MFSA, together with further information on the reporting requirements laid down in the rule, including submission guidance. Annex 2 to the rule provides credit institutions with the reporting instructions to be followed with regard to the reporting templates in Annex 1. Finally, Annex 3 to the rule provides the disclosure templates that credit institutions are required to use for the publication of such information. Credit institutions shall report such data on a monthly basis and in line with the specified reference and remittance periods: reference reporting on the last day of each month and remittance reporting 42 calendar days following each above-specified reporting reference date. For significant institutions, the first reference and remittance dates are as per the Joint Supervisory Team communication. For the less significant institutions and significant subsidiaries, first reference date is June 30, 2020 and the first remittance date is August 11, 2020
Information on exposures subject to the Moratorium on Credit Facilities in Exceptional Circumstances Regulations and the CBM Directive No. 18. and on newly originated exposures subject to the MDB COVID-19 Guarantee Scheme shall be disclosed by credit institutions bi-annually. MFSA may consider the exercise of the waivers laid down in paragraph 21 of the rule to ensure proportional application of the newly introduced reporting and disclosure requirements.
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Keywords: Europe, Malta, Banking, Reporting, Disclosures, COVID-19, Basel, Credit Risk, MFSA
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