Background (based on EBA annex VIII: payment, clearing and settlement systems)
The EU Commission Implementing Regulation 2016/1066 (OJ L 181, 6.7.2016, p.1), includes templates for banks to complete with information needed for resolution purposes. Annex VIII consists in a template on payment, clearing and settlement systems. However, the information requested with this template represents the minimum information needs and the SRB requires more data to develop the relevant chapters of resolution plans. As the inability to ensure continuity of access to Financial Market Infrastructures (FMIs) during bank resolution may be considered as one of the potential impediments to resolvability in resolution plans, it is important to improve the data collection on FMI access and to further understand the conditions for maintaining access to FMIs and the potential impact of discontinued access.
The SRB and the National Resolution Authorities (NRAs) of the Banking Union Member States have developed a more complete template for the collection of such information (the FMI report).
The FMI report
The FMI report is meant to provide a reasonably detailed overview of banks’ participation in FMIs. In addition to the information requested under the Implementing Regulation, it contains:
- Qualitative information on the system and on the use of the system by the reporting institution: governing law, currency used by the entity in the FMI, ancillary services received from the FMI, service providers needed to access the FMI etc.;
- Quantitative data to measure the extent to which the reporting institution uses the FMI and the exposure of the reporting entity and of its clients (if any) vis-à-vis the FMI, or vice-versa. In addition, information is requested on currently available credit lines and on peak (intraday) liquidity requirements, to support the assessment of potential increased liquidity requirements under stress; and
- Qualitative data necessary at the point of resolution, e.g. contacts within the FMI.
The guidance note accompanying the template has been enhanced for the 2018 reporting cycle and definitions were clarified to ensure consistent reporting across institutions.
The template does not aim to provide an in-depth understanding of critical FMIs. The template will not capture all the details that may be needed to maintain continued access to critical FMIs (FMIs necessary for critical functions or core business lines).
Horizontal data on FMIs will be gathered directly by resolution authorities, since some information may be more efficiently requested directly from FMIs, in particular when such information concerns all participant banks. For example, membership requirements of Banking Union FMIs and selected European or international FMIs will be gathered by resolution authorities, and banks will only need to provide such information for other FMIs and, in case of indirect access, for each “representative institution” (credit institution providing indirect access to one or several FMIs for the reporting institution).
In respect of timing, the deadline for submission of the reports is 30 April 2018.
Frequently Asked Questions
Questions relating to the report can be submitted to the National Resolution Authorities.