Page 33 - EBA 2015.1815 Annual report 2014 web 2

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31
ing Regulation (EU) No 680/2014 (ITS on su-
pervisory reporting) with regard to the LR. In
December, the EBA published a consultation
paper containing new LR reporting templates
and instructions which will replace the exist-
ing framework.
After completion of uniform reporting on the
LR and the Liquidity Coverage Ratio (LCR), the
EBA started collecting data in the area of li-
quidity and leverage from Competent Authori-
ties as of 31 March 2014.
Reporting on asset encumbrance
Within the regular reporting framework, the
EBA will start collecting data on EU institu-
tions’ level of asset encumbrance from 2015
(first reference date on 31 December 2014).
The reporting will provide a harmonised
measure of asset encumbrance across insti-
tutions and will allow an assessment of insti-
tutions’ reliance on secure funding as well as
of the degree of structural subordination of
unsecure creditors and depositors.
In addition, the EBA will continue building its
IT infrastructure to support impact assess-
ments and quantitative studies linked to its
policy work.
Disclosure of the Leverage Ratio (LR)
In addition to supervisory reporting, Article
451(1) of the CRR requires institutions to dis-
close information on the LR.
In accordance with point (2)(a) of Article 521(1)
of the CRR, disclosure will be applicable from
1 January 2015. To harmonise disclosure, Arti-
cle 451(2) of the CRR contained a mandate for
the EBA to develop draft ITS before the end of
June 2014. In June 2014, the EBA published a
final draft ITS containing a uniform template
and instructions for the disclosure of the LR
and its components. However, after the Com-
mission’s Delegated Act, which incorporated
significant changes in the definition of the LR,
a revision of the EBA proposals for a LR dis-
closure framework was deemed necessary,
and so in 2014 the EBA started work on mak-
ing the amendments to the earlier published
final draft ITS.
Counterparty risks, margin
requirements and market infrastructure
Risk mitigation techniques for non-centrally
cleared OTC derivative contracts
In order to address risks related to the OTC
derivative markets, in 2012 the European Par-
liament and the Council adopted the EMIR
with the objective of increasing the safety
and transparency of the OTC derivatives mar-
kets. The EMIR, (
8
) which came into effect on
16 August 2012, requires OTC derivative con-
tracts to be cleared, (
9
) derivative transactions
to be reported to trade repositories and sets
a framework to enhance the safety of central
counterparties (CCP). It also requires that
all the non-centrally cleared OTC derivative
transactions become subject to risk mitigation
techniques to reduce counterparty credit risk.
The three EU ESAs, the EBA, European Se-
curities and Markets Authorities (ESMA) and
European Insurance and Occupational Pen-
sions Authority (EIOPA), have the mandate to
develop RTS on two main topics:
(i) risk-management procedures for the
timely, accurate and appropriately segre-
gated exchange of collateral and
(ii) procedures concerning intragroup ex-
emptions including the criteria for the
identification of impediment to the prompt
transfer of funds between counterparties.
(
8
)
(
9
)
Ongoing activity
The EBA expects to publish the updated final draft ITS on
disclosure of the LR and submit it to the Commission by
the end of April 2015 for its final endorsement.