New taxonomy version 2.8 released under CRD IV Reporting

The European Banking Authority (EBA) has recently made changes to the reporting framework under the CRD IV directive and has published the latest version 2.8 of the taxonomy. The EBA released amendments to the Implementing Technical Standards (ITS) on supervisory reporting, a new ITS on reporting for resolution plans and the corresponding Data Point Model (DPM) and XBRL taxonomy. These changes form part of the reporting framework version 2.8, which will be applicable for submissions of data from December 2018. Reports with reference dates 31st December 2018 onwards need to use the new taxonomy set (v2.8), which is related to the April 2018 framework release for the ITS on supervisory reporting and the ITS on resolution reporting.

Templates reporting the Capital Adequacy Amounts and Ratios under COREP have changed significantly. The reporting of the prudent valuation requirements under COREP has, so far, consisted simply providing the aggregate value adjustments due to the requirements for prudent valuation of COREP template C 01.00 — Capital Adequacy — Own funds definition. Though the reporting of the aggregate value adjustments will continue being required as before, the Regulatory Technical Standards (RTS) on prudent valuation going into effect creates a new situation, which justifies the specification of more detailed reporting requirements for better valuation purposes, per the requirements set up in the RTS.

The new resolution reporting requirements have been published:

The final draft ITS on reporting requirements for the purposes of drawing up and implementing resolution plans will replace the European Commission’s implementing Regulation (EU) 2016/1066, and bring about the following changes:

  • A clearer scope of application of the minimum resolution framework by laying down a minimum set of data points to be reported by all institutions across the EU. Under certain conditions, resolution authorities will be able to waive some or all reporting requirements or to ask for additional data
  • Detailed minimum procedural requirements at least on an annual basis, by end of May in 2019 and by end of April from 2020 onwards
  • Revamped templates in line with the latest experience available
  • A full set of technical annexes to facilitate integration into banks’ business processes and automation. For the first time, resolution reporting requirements are integrated in the EBA’s single data point model, backed by validation rules and optional taxonomies

By default, all data under this framework will continue to be submitted by banks to resolution authorities. In line with the applicable law, supervisory authorities may collect information on behalf of resolution authorities. Supervisors and resolution authorities will also cooperate and if information is already available to the supervisors, they may exempt institutions from submitting that data. In such cases, they will inform institutions accordingly.

Changes in the taxonomy would mean changes to the reporting templates (there are more than 300 reporting templates in COREP and FINREP), changes to the validation rules (there are 1,000+ rules that need to be adhered to in order to prepare a valid report), and changes to the underlying syntax for XBRL reporting. These filing rules represent a collection of additional rules and guidance specifically applicable to the remittance of XBRL instances for reporting entities in scope of relevant EBA regulations (e.g. banks), and for regulatory filings by relevant national and supranational authorities to EBA; the EBA taxonomy dramatically influences filing rules. Although primarily addressed to those within the national and supranational authorities responsible for preparation or submission of XBRL instance files directly to the EBA, the filing rules will also be of value to individual reporters reporting to those authorities that utilise EBA filing rules or XBRL, or derivatives of them.

Reporting entities need a robust system that can take care of the underlying complexities of generating XBRL documents and provide a simple user interface that can validate data, and help in the generation of complete reports with in-built automation. Banks and financial institutions based in the EU and UK would have to report their financial statements and capital positions in the FINREP and COREP templates.

Common Reporting (COREP) covers the capital requirements and own funds reporting based on Directives 2006/48/EC and 2006/49/EC.

Financial Reporting (FINREP) covers Financial Reporting for supervisory purposes based on International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS), as endorsed by the European Union.

The first draft of reporting requirements was published in the EBA Consultation Paper and has now become formalised both as a regulation and as a technical standard.

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