Common Reporting (COREP) is expected to go live from 1 July 2013. This means that Q3 figures, submitted no later than 11 November 2013, are likely to be the first filings made under this new regime. Whilst this might seem a way off, our experience is that if firms have not started looking into the requirements yet, now is the time to start to ensure that they will be compliant.
What is it?
COREP is a new filing requirement for reporting to the European Banking Authority (EBA), as part of their implementation of the Basel III capital reforms. In the UK, the Financial Services Authority (FSA) and its successor bodies, who will be collecting data on behalf of the EBA, state that “COREP will become the prudential reporting framework for credit institutions and some investment firms according to the framework established by the Capital Requirements Directive IV (CRD IV) and Capital Requirements Regulation (CRR).”
In practice, the new requirements will apply to all firms currently required to file to the FSA, estimated to be around 2,800 firms in the UK. Whilst some parts of the reporting framework will remain unchanged, other parts will be totally overhauled in the new COREP templates. The result of this will be fundamental and wholesale changes in the type, volume and granularity of data reported.
In particular, the following are some key templates that will now be reported using the new EBA templates, rather than the old FSA-style templates:
• FSA003: Capital Adequacy
• FSA004: Capital Risk
• FSA005/006: Market Risk
• FSA008: Operational Risk
• FSA008: Large Exposures
• Others: FSA045/046/058
Based on our experience, this will affect the vast majority of hedge funds, for whom capital adequacy figures make up a significant portion of their filings.