Welcome to Basel III / EBA Common Reporting #4 Getting compliant for COREP

Transcription

1 Welcome to Basel III / EBA Common Reporting #4 Getting compliant for COREP Wednesday 15 th August 2012 approx 1 hour

2 Webinar agenda 60 min Welcome & Introduction Rebecca Bond, Group Marketing Director, Lombard Risk Key speakers: James Phillips, Director Regulatory Strategy and Nicholas Brewer, Business matter expert and solution consultant, Lombard Risk Questions & Answers

3 Basel III / EBA Common Reporting business briefings THE IMPACT ON REGULATORY REPORTING and creating a reporting framework to meet regulatory and management demands Basel III EXPLORING THE IMPACT ON YOUR FIRM Focussing on how the regulators' new capital and liquidity demands will impact your firm's business model and operating procedures NEW LIQUIDITY DEMANDS: is this the new LIQREP? IS RISK MONITORING AND REPORTING your firm s Standard Operating Procedure (SOP)? A month from now will be too late to start preparing. What's been achieved in 2011 and what's left to do? Looking at REGULATORY REFORM: the new EU system a year on, and the new UK system. COREP, FINREP and LIQREP: consultation on reporting templates and latest developments.

4 Regulatory compliance webinar series: online business briefings April Basel III / EBA Common Reporting regulatory impact #1 May Basel III / EBA Common Reporting regulatory impact #2 TODAY 29 th August 12 th September 26 th September Getting compliant for COREP including update following recent EBA and FSA announcements Regulatory reporting: Transparency and why it matters, with a focus on trends and variances Taking the longer view: Migrating from the tactical to the strategic Bringing it all together: Why an integrated regulatory and management reporting platform approach is important

5 Let s get started. with a short introduction

6 Lombard Risk today: a leading player in global risk and compliance solutions: Ticker: LRM Founded in 1989 Trusted providers for more than 22 years 300+ banks, hedge funds, commodity trading and fund management clients in 25 countries Solutions for global financial services institutions No.1 provider of Regulatory Compliance solutions in both the United Kingdom and United States - with global coverage Leading Liquidity Analysis provider A market leader in Collateral Management solutions Experts in Dodd-Frank Act Title VII transaction-style reporting

7 Global 270 strong in 10 global offices R&D and Testing centre Luxembourg Shanghai New York and New Jersey 489 Fifth Avenue New York, NY London Ludgate House 245 Blackfriars Road London SE1 9UF Tel: +44 (0) South Africa 34 th Floor Hai Tong Securities Tower 689 Guang Dong Road Shanghai P.R.China Tel: +86 (0) Mumbai Tel: One Gateway Center 26 th Floor New Jersey, NJ Tel: US operations Singapore 30 Raffles Place #20-04 Chevron House Singapore Tel: Hong Kong Unit 2106, 21 st Floor Harcourt House 39 Gloucester Road Wanchai, Hong Kong Tel: Tokyo Level 14, Hibiya Central Building Nishi-Shimbashi Minato-ku, Tokyo Tel: Headquarters Asia Pacific operations

8 Global client base: 300+

9 Integrated solution: regulatory compliance, liquidity analysis, management information, collateral management, transaction reporting

10 Handing you over. Key speaker: James Phillips Director Regulatory Strategy Lombard Risk

11 European common reporting 3 topics 1. What is COREP etc? Recap of the why and wherefore...and that it is not just COREP 2. How does this impact firms? and the who 3. Update recent news and the what and when Lombard Risk REPORTER for regulatory compliance

12 International 16/08/2012 What is COREP etc? implementing in EU Basel III CRD & CRR Sanctions Governance, Remuneration Europe CRD IV * CRR = Capital Requirements Regulation which is a part of Basel III implementation; the other half is the Capital Requirements Directive (IVth edition). Directives have to be taken into national law; regulations do not and are effective right away and are uniform. Lombard Risk REPORTER for regulatory compliance

13 Liquidity Capital Leverage What is COREP? implementing Basel III Monitoring Reporting Phasing As of 1 Jan 2019 Leverage Ratio Supervisory monitoring Parallel run 1 Jan Jan 2017 Disclosure starts 1 Jan 2015 Migration to Pillar 1 Minimum Common Equity Capital ratio 3.5% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5% Capital Conservation Buffer 0.625% 1.25% 1.875% 2.50% Minimum common equity plus capital conservation buffer 3.5% 4.0% 4.5% 5.125% 5.75% 6.375% 7.0% Phase-in of deductions from CET1 (including amounts exceeding the limit for DTAs, MSRs and financials) 20% 40% 60% 80% 100% 100% Minimum Tier 1 Capital 4.5% 5.5% 6.0% 6.0% 6.0% 6.0% 6.0% Minimum Total Capital 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% Minimum Total Capital plus conservation buffer 8.0% 8.0% 8.0% 8.625% 9.25% 9.875% 10.5% Capital instruments that no longer qualify as non-core Tier 1 capital or Tier 2 capital Phased out over 10 year horizon beginning 2013 Liquidity coverage ratio (LCR) Observation period begins Introduce minimum standard Net stable funding ratio (NSFR) Observation period begins Introduce minimum standard Lombard Risk REPORTER for regulatory compliance

14 What is COREP? common reporting impact European implementation of Basel III Imposition of EU Common Reporting It s not just COREP: COREP, FINREP, LE, LC, NSF, LR Capital Financial Large Exposures Liquidity Coverage Net Stable Funding Leverage Ratio 34 templates 69/46 templates 3 templates (but they grow ) c5 templates c2 templates 3 templates Lombard Risk REPORTER for regulatory compliance

15 How does this impact firms? Scope includes banks, building societies and investment firms: Not foreign branches Domestic firms already subject to CRD Key impacts on: Firm business model Operational model re reporting Involvement of senior management Major challenges: Data requirement and gearing up FSA reminds investment firms currently in scope of CRD that they will be impacted by CRDIV and that they should prepare accordingly (FSA 1/8/12) Lombard Risk REPORTER for regulatory compliance

16 March Update recent news: the way it was 1 st January 2013 Basel III start date 1 st January 2013 Intended Reporting Start Date LCR End January Monthly LR End March Quarterly UK planned exemption NSFR COREP Compliance with: Liquidity Coverage Ratio and Leverage Ratio Compliance with: Net Stable Funding Ratio Final phasing-in switched ON FINREP Lombard Risk REPORTER for regulatory compliance

17 Update recent news: briefing 31 st July 2012: EBA announcement Finalisation of ITS on supervisory reporting has been pushed back pending the adoption by the EU legislators of the Capital Requirements Regulation. 1st January 2013 still expected to be the CRR application date This date will only be further delayed if the CRR does not make the EU legislative timetable within 2012 EBA recognise institutions may face challenges to immediately comply with all the reporting requirements in the ITS Flexibility needed: phase-in and/or in implementation dates: candidates include items not assisting supervision of compliance with CRR [New] FINREP postponed entirely until 1/1/2014 may be other reports phased in later with requirements phase-in determined by EBA once the final CRR provisions are available. May mean potential relaxation of e.g. monthly LC requirements in first instance Interim or phased reporting needed from 1/1/13 details to be determined Lombard Risk REPORTER for regulatory compliance

18 Update recent news: briefing 1 st August 2012: UK FSA announcement it does not appear feasible that the legislation can enter into force in line with the implementation date of 1st January 2013 that full preparatory work (in the absence of final text) will be carried out mindful of the original Basel III timetable FSA expect all in scope CRD firms to do likewise making it clear that firms are expected to be compliant with Basel III from the start date FSA observes that Common Reporting (as a part of the toolbox for the implementation of CRDIV) is dependent on final Implementing Technical Standards. FSA getting on with preparations to begin collecting data under Common Reporting for the period beginning 1 July 2013, should the legislation and related standards be finalised by this date..lombard Risk will review the FSA s interim proposals in this respect as soon as these are available.and we believe we know what will be suitable (see next slide) Lombard Risk REPORTER for regulatory compliance

19 Update recent news: the timetable A S O N D J F M A M J J A S O N D Consultation Documentation Potential CRR date Basel III FSA s Common Reporting date FINREP (date per EBA) Gap analysis, software installation Interim Basel III reporting period Common Reporting (estimated by FSA) Lombard Risk REPORTER for COREP, LC, NSF, LR Software updates Software updates Software updates Own Funds under Basel III UK COREP Lombard Risk REPORTER for regulatory compliance

20 Handing you over. Nick has over 20 years experience in the banking and finance sector. He has held various positions within banking operations, including in the Middle East, and served in many roles within IT organisations serving the banking sector, covering banking, trading and risk management systems. Nick works with prospective clients to understand their requirements and to explore how Lombard Risk s solutions could help them to achieve their objectives.

21 Getting compliant 5-point plan 1. Understand 2. Plan 3. Implement 4. Test 5. Deploy Lombard Risk REPORTER for regulatory compliance

22 What have WE been doing? We engaged We delivered We monitor Lombard Risk REPORTER for regulatory compliance

23 Lombard Risk REPORTER for regulatory compliance Lombard Risk REPORTER templates for COREP And the calculations

24 Lombard Risk REPORTER Fully scalable, consolidated regulatory solution Lombard Risk REPORTER for regulatory compliance

25 What should YOU be doing? Plan the programme Analyse impact Choose solution Interim FSA Reporting Requirements Plan and monitor project Configure Configure Test Test Deploy Deploy Run Run Now September-December January-June 2013 July 2013 Lombard Risk Risk REPORTER for for regulatory compliance

26 How can we help you? A focused solution for now and the future Solution powered by industry-proven software Plan for compliance Deliver a successful project Ongoing regulatory reporting support Lombard Risk REPORTER for regulatory compliance

27 The regulatory compliance series Why are we giving these webinars? Help you understand how COREP requirements evolve Help you understand what you need to do to be ready What is the rest of the series? Date 29 th August 12 th September 26 th September Title Regulatory reporting: Transparency why it s important, with a focus on trends and variances Taking the longer view: Migrating from the tactical to the strategic Bringing it all together: Why an integrated regulatory and management reporting platform approach is important Lombard Risk REPORTER for regulatory compliance

28 Questions Implications & Answers of DFA for BBVA Questions submitted in advance: Question one: Will the regulations be delayed again? Question two: What s the FSA s role now/in the future? Questions raised during the webinar? Open for additional questions now.

29 What s Implications next? of DFA for BBVA The material supporting today s event will be made available to DELEGATES ONLY and is confidential material - please respect that. PowerPoint presentation / Event summary document results of polls and answers to questions Results of the polls and detailed coverage of the Questions & Answers in the post-event summary You will receive invitations to future webinars in the regulatory compliance series and appropriate comment pieces from our regulatory team Thank you for joining us today we hope you enjoyed and benefited from it. If you have any questions please do not hesitate to contact us on: marketing@lombardrisk.com

30 Thank you