BACKGROUND

In December 2017, the Organisation for Economic Cooperation and Development (OECD) published a release in which it approved the Common Reporting Standard (CRS) as the basis for the automatic annual exchange of information on offshore financial accounts, to tax authorities of the residence country of the account holders. 

The implementation of the CRS within domestic legislation requires financial institutions identify and correctly report accounts held by non-residents, and an international legal framework, provide for the automatic exchange of CRS information. The CRS Multilateral Competent Authority Agreement (CRS MCAA), is the preferred route for putting the international legal framework in place.

KEY POINTS

ORGANISATIONAL

• The CRS was implemented in national legislations of EU Member States during 2016 with consecutive enforcement on the 1st January 2017
• Over 100 jurisdictions (both in the EU and non-EU) have publicly committed to implement the CRS with half having started the exchange of CRS information late in September 2017 and a further 53 set to follow suit in 2018. 

OPERATIONAL/TECHNICAL

Having data disseminated across system makes it very difficult to not only prepare FINREP reports but also make use of this data for internal analysis and reporting. Challenges operationally, revolve around actually producing the reports from the previously prepared data and managing the various updates as issued by the EBA through the DPM changes.

Financial Reporting ensures harmonisation and convergence in supervisory reporting is maintained. It applies to all credit institutions that consolidate their financial reports based on IFRS. The templates covered under FINREP include:

These reports have to be filed annually with the National Supervisory Authority of the country.

THE WHO, WHAT, WHEN OF FINREP REPORTING

WHO

CREDIT INSITUTIONS AND INVESTMENT FIRMS ACROSS 31 COUNTRIES IN EUROPE

WHAT

COMMON REPORTS (COREP) AND FINANCIAL REPORTS (FINREP)

BRSANALYTICS is an effective integrated solution which covers the FINREP reporting requirement from data aggregation, transformation and merging to the final reporting pack to be submitted to the central regulatory government body. The application imports the raw data from various sources, processes and transforms this data; ready to be used by the customer for reporting or any analysis required, thus reducing the burden placed on the organisational and operational level of an institution.

BRSANALYTICS FINREP BUSINESS BENEFITS

IFRS 9

This accounting standard aims to strengthen accounting recognition of loan-loss provisions, valuation of uncertainty and provisions for on and off balance sheet exposures. The idea is to shift towards a higher quality global accounting standard.

IFRS 9 integrates accounting, risk and business which makes it somewhat complex and time-consuming to implement across an organisation and necessitates new processes and IT changes to fulfil new accounting and disclosing requirements.

Implications for the bank are ensuring a smooth accounting internal changeover from IAS 39 standard to IFRS 9 and possibly upgrading of internal financial applications. BRSANALYTICS is a flexible solution which aggregates multiple data sources provided by the bank and provides automatic placement and data population in the FINREP regulatory returns. Our team has investigated the IFRS9 impact on the BRSANALYTICS FINREP solution, and we can assure that from the draft regulations available, our FINREP solution will be made IFRS9 compliant ensuring a smooth transition from one reporting period to the next due to a phased approach to be adopted with the client.