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The Prudential Regulation Authority (PRA) proposes changes to reporting requirements for banks and building societies applying International Financial Reporting Standard 9 (IFRS 9). This would include both firms that apply IFRS in its endorsed form, and those that apply IFRS 9 as part of UK generally accepted accounting practice (GAAP). More specifically, such firms would be required to report certain European Banking Authority (EBA) Financial Reporting (FINREP) templates instead of the current FSA015 (‘Sectoral information, including arrears and impairment’) return, on both an individual and consolidated basis.
The PRA also proposes that certain firms that do not apply IFRS 9 should also report a small number of FINREP templates, to ensure that there is sufficient data available for peer analysis after the implementation of IFRS 9.
The proposed implementation date for the proposals in this consultation paper (CP) is the start of a firm’s accounting year beginning on or after 1 January 2018, to coincide with the implementation date of IFRS 9. The PRA proposes that firms could apply for a rule modification (via a modification by consent process) which would enable them to delay application of the new rules until the start of their financial year beginning in 2018. The PRA also proposes that firms would be able to apply to report on a schedule linked to their accounting year, rather than report on calendar quarters. This aligns with the approach taken to reporting of financial statements returns set out in Policy Statement (PS) 36/16 ‘Financial statements – responses to Chapter 3 of CP17/16’.
The PRA is considering various collection mechanisms such as an automated submission mechanism, an online portal or reusing existing systems, and is aiming (as far as possible) for the submission mechanism required for these returns to be consistent with the mechanisms that will be used to collect the financial statement returns set out in PS36/16. The PRA will publish details of the submission method which will be used by firms to report these returns on the PRA webpages in early 2017.
This consultation closes on Monday 13 March 2017.