CSSF published a circular (CSSF-CODERES 19/09) on information request by SRB for calculation of the 2020 ex-ante contribution to the Single Resolution Fund (SRF) on an annual basis. To determine, in accordance with provisions of the EU Delegated Regulation 2015/63 and the EU Implementing Regulation 2015/81, the annual contribution to be paid by each credit institution in 2020, SRB needs to obtain a certain amount of information in relation to the Single Resolution Mechanism as expressed in its introduction letter (Annex 1). To gather the necessary data, SRB has developed a template (Annex 2) and the associated completion instructions. The completed template must be sent to CSSF by January 14, 2020.
The earlier mentioned Regulations 2015/63 and 2015/81 specify the methodology for calculation of this contribution to SRF and the obligations of the credit institutions regarding the necessary information to be provided in the context of the Single Resolution Mechanism. In case not all required information is transmitted correctly by January 14, 2020, SRB shall use estimates or its own assumptions for calculation of the 2020 contribution of the concerned credit institution to SRF. In specific cases, SRB may assign the credit institution concerned to the highest risk adjusting multiplier, for the calculation of the institution's contribution to SRF.
In addition, each credit institution that directly, or as part of a group, falls under the direct ECB supervision (Annex 3), unless it is subject to the lump-sum payment, must make available, to the resolution department of the CSSF, additional assurance documents, which will be transmitted to SRB. These documents can either be Agreed Upon Procedures (AUP) where an external auditor confirms specific data (Annex 4) or a Sign-off form where at least one of the members of the banks’ authorized management certifies that the submitted template complies with the general instructions (Annex 5). The documents must be sent to CSSF by February 17, 2020.
Article 100 of the Bank Recovery and Resolution Directive or BRRD (2014/59/EU) requires member states of EU to establish one or more national resolution financing arrangements for ensuring the effective application by the resolution authority of the resolution tools and powers. In accordance with Article 103(1) of the BRRD, ex-ante contributions shall be raised at least annually from all institutions incorporated under the Luxembourg law. However, branches established in Luxembourg by institutions that have their head office outside EU are not targeted by the present circular, as they will be covered by the Luxembourg Resolution Fund.
Related Link: CSSF Circular (PDF)
Keywords: Europe, Luxembourg, Banking, Single Resolution Fund, Ex-ante Contributions, Reporting, BRRD, Resolution, SRB, CSSF
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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