With the implementation of COREP scheduled for the first half of 2014, UK firms will be required to report on regulatory capital adequacy at an unprecedented level of granularity and in a fully standardised format. For most UK firms, this requires a radical review of their regulatory reporting framework.

The Scope

• All BIPRU firms (banks, building societies and investment firms) will be required to change their reporting process to enable COREP. Firms which are currently reporting FSA returns FSA001, FSA002 will fall under the FSA’s (and their successor bodies) COREP requirements.
• It is the legal responsibility of each firm (and not the FSA) for being compliant with these new European Banking Authority (EBA) reporting requirements.

The Impact

Institutions need to prepare their plan of execution including:

• Bringing systems and processes up-to-date in order to ensure their capability to meet the new reporting requirements;
• Reviewing the accuracy and timeliness of the drafted returns and the underlying processes and controls; and
• Taking responsibility for regulatory reporting at management level.

The Background

The COREP templates are expected to be implemented during 2013 through the Capital Requirements Directive IV (CRD IV) and Capital Requirements Regulation (CRR). Affected UK BIPRU firms will be required to report their capital adequacy to their supervisor on a single entity as well as consolidated basis, quarterly and within 30 business days of the quarter-end.

The most critical aspect of this new framework is the greatly increased granularity of requested information in combination with the new data perspective requested. Consequently, the FSA has urged BIPRU firms to take sufficient time for shaping up their data, systems and processes to adequately adapt this new standardised reporting format. An expansion of the number of reportable data items results from an increased number of dimensions.

KPMG's offerings

KPMG has two main offerings to help our clients understand and deal with COREP. Both offerings complement each other and often work in tandem.

These are:

• Consulting services: to help clients understand the requirements, identify the gaps between current and required processes, and to assist in the implementation of them.
• Technology services : KPMG has developed XBRL software to assist firms in the filing of COREP data to the FSA and its successor bodies.