ECB Regulation on reporting of supervisory financial information
- Regulations (EU) 2017/1538 and 2017/1539 of 25 August 2017
- Regulation (EU) 2015/534 of 17 March 2015
Regulations (EU) 2017/1538 and 2017/1539 of 25 August 2017
Regulation (EU) 2017/1538 of the European Central Bank of 25 August 2017 amending Regulation (EU) 2015/534 on the reporting of supervisory financial information (ECB/2017/25) entered into force with effect from 1 January 2018.
The amendments introduced by Regulation (EU) 2017/1538 take into account the new IFRS 9-based standards for harmonised FINREP reporting as set out in the implementing technical standards (ITS) published by the European Banking Authority (EBA) and, as a result, also include modifications to the reporting templates and instructions used by national GAAP reporters for reporting supervisory financial information to the ECB.
In Germany, these amendments affect all single-entity and consolidated reporters that prepare their financial statements pursuant to national GAAP (HGB). Based on ECB Regulation (EU) 2017/1539, the initial application date of ECB Regulation (EU) 2017/1538 for less significant institutions (LSIs) in Germany has been postponed until 1 January 2019. For significant institutions subject to direct ECB supervision, however, the amendments already came into effect on 1 January 2018.
Impact on technical standards
For German reporters, these amendments affect the technical standards governing the submission of FINREP reports, amongst other things. Until the new reporting requirements come into force for German LSIs on 1 January 2019, these entities should continue to report FINREP data under national GAAP using taxonomy version 2.6 (DPM v2.6). Significant institutions using the HGB accounting standards are already expected to use taxonomy version 2.7 (DPM v2.7) for their first FINREP data submission under national GAAP (and also under the FINREP IFRSs) as at the March 2018 reporting reference date. The entry points for FINREP reporting under the different taxonomy versions have been adapted accordingly.
Impact on templates and instructions
The national instructions informing HGB reporters how to complete the supervisory reporting templates, which have already been released for FINREP version 2.6, have been revised based on the modified templates under taxonomy version 2.7. Following the approach used for the previous version, these instructions were drafted by a working group which included also the German Banking Industry. These instructions reflect the common understanding of BaFin, the Deutsche Bundesbank and banking industry stakeholders. The results of the current reconciliation exercise have been agreed with the ECB. The instructions for German institutions are to be regarded as “strong recommendations” in terms of the ECB’s expectations. The substantive amendments arising for German reporters as a result of the instructions for completing taxonomy version 2.7 of the templates have been indicated in the reporting tables, and any changes compared with version 2.6 have been marked.
Issues currently under debate
At present, there is one reporting issue, on the topic of derivatives, which is still being reconciled at both the national and the ECB level. If this discussion results in modifications to the reporting expectations for derivatives, the published instructions for completing the reporting templates will be updated accordingly. In this case, the initial application date for any new reporting framework for derivatives will be communicated separately by supervisors.
Regulation (EU) 2015/534 of 17 March 2015
Having regard to Article 99(6) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013, the ECB published Regulation (EU) 2015/534, which extends financial reporting requirements (FINREP) to supervised groups applying national accounting rules (nGAAP). This Regulation is aimed directly at all institutions that are subject to reporting requirements. Against this background, FINREP reporting items based on Annex IV of Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 as well as further subsequent Regulations have been reconciled with requirements under the German Commercial Code (HGB). The tables below present the outcome of this reconciliation exercise and are based on FINREP Version 2.6 pursuant to Commission Implementing Regulation (EU) 2016/1702 of 18 August 2016. This version has been effective since the reporting date of 31 December 2016. The tables, which have now been adjusted, will apply to the reporting institutions from the reporting date of 31 December 2017 until the date on which the next FINREP Version 2.7 is first applied pursuant to Commission Implementing Regulation (EU) No 2017/1443 of 29 June 2017. In principle, this Regulation will apply from 1 January 2018. However, for less significant institutions that apply the German Commercial Code, this version will only come into force on 1 January 2019 pursuant to Regulation (EU) 2017/1539 of the European Central Bank of 25 August 2017.
The tables also include guidance for those institutions applying the German Commercial Code on how to report financial information in the context of the ECB regulation. This guidance was compiled by a working group with representatives of the German banking industry and reflects the common understanding of BaFin, the Deutsche Bundesbank and banking industry stakeholders. The results of the reconciliation exercise have been agreed with the ECB.
FINREP data points reporting format
In contrast to the other supervisory financial reporting formats, the “FINREP data points” reporting format only queries single data points from selected reporting forms rather than complete reporting forms. In light of this, on 20 March 2017 the ECB published a separate taxonomy exclusively for this reporting approach, including respective validation rules.
Non-applicable validation rules
The list below shows the respective status of the validation rules which, from an nGAAP perspective, do not apply to the reporting of financial information on the basis of the German Commercial Code. This is the case inter alia if, under FINREP, IFRS and nGAAP items are reconciled for validation purposes. The German NCAs will not check these rules when reports are submitted by reporting entities applying the German Commercial Code. Like the Deutsche Bundesbank, the ECB will not reject any reports that violate the relevant validation rules (ie blocking rules do not apply). This also applies if, until further notice, the EBA continues to categorise these rules as blocking rules.