EBF response to EBA consultation on RTS on detailed records of financial contracts

08 June 2015

The European Banking Federation provides its general comments and answers to specific questions on European Banking Authority’s Regulatory Technical Standards.

The EBF strongly believes that it is important that the record keeping requirements addressed in the draft RTS build on existing data recording and reporting obligations. This would avoid unnecessary burdens for the addressees of the obligation and prevent that the existing parallel obligations ultimately produce confusing and conflicting data.

Notwithstanding the EBA’s intention  to  avoid  duplications  and  inconsistencies,  the new  data record obligations will result  in  additional  burden. The new  obligation  will require  institutions  to  make substantial changes  to  existing  data  recording  processes and  to  adjust  existing  systems  and  databases. The changes to be made will be very challenging and time consuming. This holds particularly true if the specific data fields are not aligned with the fields used under the obligation to report   derivative transactions to trade repositories  under EMIR in accordance with Delegated Regulation  (EU)  no. 148/2013 (TR-reporting obligation) (taking into account the changes proposed in the current   review) and under the Securities Financing Transactions Regulation (SFTR); and if the EBA requirement  is  interpreted  as  an obligation to set up a single central database.

EBF  further  notes  that  the annex  of  the  RTS  does  not  distinguish  sufficiently  between transaction and master agreement related information. This should be further clarified in order to ensure that the resolution authority obtains the most relevant information for the decisions it will have to take in the event of resolution.

Against this background EBF sees the need for the following changes and additions to be made:

• Closer alignment of the list of data elements to be recorded (Annex) to data reporting obligations under EMIR and under the future SFTR.
• Introduction of an adequate phase-in period for the implementation of the record  keeping requirement in order to enable institutions to make the necessary  adjustments  to  their  systems.  This would also allow for a better alignment of these record keeping requirements with TR-reporting obligations still under development.
• Clarification that there is no obligation to establish a specific database structure. The EBA should delete the reference to a “central database” in the recitals. Defining the technology solution that institutions will choose in order to implement the record keeping requirements goes beyond the mandate that was given to the EBA in the BRRD.
• Overall, the information regarding financial contracts (Annex) should be disaggregated in two sections: one regarding the framework contract (at counterparty level) and other relative to each operation (operation level).

Full response

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