QA2019-85 - Own Funds

Owned by SRB Services
Feb 01, 2024
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Resolution Reporting Subject Matter Guidance
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QA2019-85

Question


tab T02.00 where the guidance states the following: “If a reporting entity is not subject to individual own funds requirements, it has to fill in the contribution of the entity to the consolidated prudential own funds. Such a contribution has to be reported in the COREP template 6.2 about the information on the contribution of entities to solvency of the group and can be a negative number”. - First of all, this contribution refers only to row r100 or it also concerns to the rest of the rows in this tab (i.e. Basel floor, Pilar II requirements, buffers,…)? Specifically: o In relation to row r100, and when trying to reconcile the figures with COREP 6.2, our understanding is that column 070 (RWAs) should always prevail to column 250 (contribution to consolidated RWAs). Is our interpretation correct? o For those entities without individual prudential requirements, should rows r310-r300 be completed with the consolidated requirements (same % as for the RES/CON LDR)? o For the combined buffer requirement, should entities with an individual waiver fill in their contribution to all the buffers applicable at the consolidated level? - For certain banking groups there are different consolidation levels. In that cases, to which level this contribution should be referenced to? Given that this data is later used for the MREL requirement calculations, and in order to avoid heterogeneity across banks, we would like to clarify how entities should fill in this cells.


Response


For the time being, the reporting should be made on the contribution to the first direct parent entity that is subject to solvency requirements, not the ultime parent entity that consolidates the whole group. That said, the topic needs further consideration from the policy perspective and thus, the reporting guidance may have to be adapted in the future.