This document provides guidelines on the resubmission of historical data by financial institutions within the EBA reporting framework. It establishes a common approach for correcting errors in reported data, specifying compliance obligations and the roles of competent authorities. The aim is to ensure the quality of submitted data, enabling authorities to effectively fulfill their statutory tasks.
This document is a guide published by the European Banking Authority (EBA) in April 2024, entitled "Guidelines on resubmission of historical data under the EBA reporting framework." It addresses the modalities of resubmission of historical data by financial institutions within the European regulatory reporting framework supervised by the EBA. The scope covers all types of financial institutions (banks, payment institutions, etc.) subject to the prudential and resolution reporting framework, at various levels (individual, sub-consolidated, consolidated). The guide applies to historical data in case of errors, inaccuracies, or modifications, and aims to harmonize resubmission practices across the European Union. It does not cover master data and excludes cases where the EBA framework provides specific resubmission rules. The application date is set for 17 October 2024 (p. 1-14).
The EBA guide establishes a common approach for the resubmission of erroneous or modified historical data within regulatory reporting. This topic is crucial because the quality, consistency, and completeness of data submitted to competent and resolution authorities are essential for their supervisory and crisis management missions. The guide specifies that institutions must resubmit corrected data for the current reporting date as well as for affected historical data, according to the reporting frequency: one year of past data for annual, semi-annual, quarterly reports, and six months for monthly reports, with adjustments to cover the previous year's end. Specific cases where resubmission is not required are also defined, notably when regulatory clarifications render prior data inaccurate or when errors fall within the tolerances of submission rules. The guide emphasizes that this approach does not alter the fundamental obligation of institutions to provide high-quality data but serves as a tool to ensure data updating and correction. It does not introduce additional materiality thresholds, relying on proportionality already integrated in the regulatory framework, and adjusts the required precision for monetary data from 1,000 to 10,000 units. Finally, it specifies the role of authorities in assessing resubmitted data and their ability to require further corrections if necessary. This harmonization aims to guarantee fair treatment among institutions and better efficiency of regulatory controls (p. 3-9, 14-17).
This guide responds to a recommendation from the 2021 EBA report on the cost of compliance with prudential reporting requirements, which highlighted the need to clarify the policy on resubmission of historical data. Indeed, errors or modifications in submitted data may be detected later by institutions, competent authorities, or the EBA itself. The current framework imposes an obligation to correct without undue delay but without a clear time limit for resubmission of past data, which generates significant costs for institutions. The guide therefore aims to define clear and harmonized rules to limit these costs while ensuring the quality of data necessary for supervision and resolution missions. It is part of a concern for efficiency, fairness among institutions, and simplification of processes, while respecting the principles of proportionality already integrated in the regulatory framework. The scope covers all reporting data supervised by the EBA, excluding master data and specific cases already regulated (p. 5-9, 18-22).
- General resubmission approach: Institutions must correct errors detected in historical data by resubmitting corrected data for the current reporting date and for past periods according to the reporting frequency (annual, semi-annual, quarterly, monthly). For monthly data, resubmission covers at least the previous six months and, if necessary, up to the end of the previous year. This rule aims to balance the need for accurate data with resubmission costs (p. 6-8, 14-16).
- Exceptions to resubmission: Corrections are not required when official clarifications (EBA Questions & Answers) modify the understanding of requirements, implying that only future data must be adjusted. Likewise, minor errors within the tolerance thresholds of submission rules do not require resubmission (p. 8, 16).
- Proportionality: The guide does not provide additional proportionality rules beyond those already integrated in the regulatory framework. Small and non-complex institutions (SNCI) already benefit from a reduction in the number of data to report. The uniform approach ensures fairness and comparability of data among institutions (p. 8-9, 20-21).
- Role of authorities: Competent, resolution authorities and the EBA assess the quality of resubmitted data and may require additional corrections or detailed explanations. They may also request resubmission of historical data beyond the defined minima, ensuring proportionality relative to the materiality of errors and the risk profile of institutions (p. 17).
- Technological impact and costs: Institutions must maintain technical capabilities to submit and resubmit data according to required formats. The guide takes resubmission costs into account and aims to limit the burden by setting time limits. Responses to the public consultation highlighted technical challenges, complexity, and costs, but the EBA maintained its approach favoring simplicity and efficiency (p. 16, 24-37).
- Public consultation: The majority of respondents support the proposed harmonization but request more proportionality and materiality thresholds. The EBA replied that no concrete proposal was provided and that the chosen approach balances costs and benefits, notably by adjusting the required precision for monetary data (p. 24-31).
- Key definitions: "Current data" refers to the most recent submitted data, "historical data" to data from prior periods. The framework applies to regular reporting supervised by the EBA, at all application levels (individual, consolidated) (p. 13-14).
- Compliance obligations: Authorities and institutions must strive to comply with these guidelines from 17 October 2024. Authorities must notify their compliance to the EBA before 17 September 2024 (p. 12-13).
- Established facts:
- Errors in reporting data are frequent and require prompt correction.
- The absence of clear rules on the historical resubmission period generates high costs and heterogeneous practices.
- The current regulatory framework already integrates proportionality principles according to institution size and complexity.
- Assumptions:
- Limiting the resubmission period to one year (or six months for monthly data) balances costs and data quality.
- Not introducing additional materiality thresholds avoids complexity and ensures comparability.
- Interpretations:
- The EBA considers that increased precision of historical data is essential for supervision and resolution.
- Resubmission must be uniform to ensure fair treatment.
- Uncertainties:
- Public consultation feedback shows concerns about operational burden and technical feasibility.
- The concrete impact on costs and data quality remains to be observed after implementation.
- Interactions with other initiatives such as the ECB pilot on significant resubmissions require monitoring (p. 18-22, 24-38).
The EBA concludes that these guidelines clarify and harmonize the rules for resubmission of historical data, which will reduce excessive costs for institutions while ensuring the quality of data necessary for authorities. The guide recommends resubmission limited to one year of past data (six months for monthly data), without additional materiality thresholds, relying on proportionality already existing in the regulatory framework. The EBA adjusts the required precision for monetary data to reduce non-significant corrections. Authorities may require additional resubmissions if necessary, ensuring proportionality. Institutions must have appropriate technical capabilities and correct errors without undue delay. These guidelines enter into force on 17 October 2024, with an obligation for authorities to notify compliance before 17 September 2024. The EBA emphasizes that this simple and uniform approach promotes a level playing field and better efficiency of supervision and resolution in the EU (p. 3-9, 12-17, 18-22, 24-31).
Synthesis note written from the full document by DataSAI Academy. This note comes from the scientific library of the DataSAI Academy, open to all.