30 working days until first submission of COREP via GABRIEL in XBRL format. There are four points to consider leading up to COREP; Are you in scope? Are there any delays to the COREP submission date? What’s involved in COREP submission? Changes in validations and what’s yet to come-there’s more!
By now, all but the largest Investment Firms will typically be in one of three situations as the first submission date for COREP approaches. They will be:
- Using a simple system internally, or having outsourced completely
- Exploring their options (better hurry up)
- Aren’t aware of the imminent COREP submission dates (ouch)
Here are 4 key points to consider:
(1) Are you in-scope?
A couple of things to clear up first for firms: Whether they are in-scope for the upcoming COREP deadline and, if they are, details of the submissions.
For Investment Firms, the introduction of COREP has meant a new classification of what were BIPRU firms; those that are now IFPRU firms are subject to COREP reporting.
The classifications are: Full-Scope IFPRU firms, Limited Activity IFPRU firms, Limited License IFPRU firms, and those holding client money.
There are a few exceptions – those firms who do execution only, portfolio management and/or don’t hold client money – which aren’t affected by COREP for the time being.
(2) Are there any delays to the COREP submission dates?
No delays – unlike many previous regulatory deadlines, the first COREP submission date has not been delayed. The deadline to submit GABRIEL returns via XBRL is Friday 30th May 2014 – although some firms may have been granted an extension over the weekend, making their final submission date Monday 2nd June.
At this late stage, firms who have yet to identify how they will reach these deadlines to make their XBRL report submissions will have to either:
(1) Appoint an accountancy or advisory firm with some form of XBRL conversion tool to complete the reports on their behalf OR
(2) Select a system to use themselves.
(3) What’s involved in making COREP submissions?
- Understanding the existing changes and new regulatory reporting requirements especially the level of granularity and the quantity of data that is required – as well as significant template changes between for example the discontinued FSA003 and the new COREP CA1-5 (and note you won’t be able to complete a COREP on GABRIEL!)
- Collecting the data (which may come from IT/accounting systems or from a 3rd party and/or external accountant)
- Converting the reports into XBRL format. Is the XBRL right? Is the data valid? Is it in the correct format? Firms should be aiming for at least the start of May to collect and allocate all the data.
(4) Changes in validations
Right now, as the validations provided by the European Banking Authority (EBA) include some that do not work, it is imperative that the solution chosen, whether external or manually built in-house, allows transmission in XBRL format despite any validation failures (where EBA contradictory validations cannot be passed).
It is also important that the solution highlights clearly which validations have failed. Recent validations have been downgraded from a ‘critical’ level to ‘warning’ level by the regulators, who have declared it is important that firms attempt to pass as many validations as possible to the best of their ability.
(5) What’s yet to come – there’s more!
The amount and complexity of work needed for firms to report on a Business As Usual (BAU) basis has increased significantly with COREP and is continuing to do so as new parts of the EBA regime come into scope (e.g. FINREP at the end of September 2014, then Asset Encumbrance, and in 2015 “LIQREP” i.e. Liquidity Coverage RATIO and Additional Liquidity Monitoring Metrics ALMM).
As well as the preparation and submission of the reports, there is also the need to run prior period sign-offs in parallel with new report preparation, which is best achieved when there is a high level of confidence in the quality of the originating data and minimum manual intervention has taken place.
With the increased complexity, quantity and granularity of financial reporting brought about by harmonisation across the EU, perhaps firms will look to automate more of their financial reporting.