What is Regulatory Reporting?

Regulatory reporting refers to the periodic disclosure of financial information by banks and other financial institutions to government agencies and regulators. The purpose of regulatory reporting is to help authorities monitor the financial stability of the institution and identify any risks that may pose a threat to its solvency.

What are the most important regulatory reports?

The most important regulatory reports for banks are the Call Report and the Consolidated Reports of Condition and Income (aka, the “FFIEC 051” report). The Call Report is filed quarterly and includes information on the institution’s balance sheet, income statement, and certain off-balance sheet items. The FFIEC 051 report is filed semi-annually and provides more detailed information on the balance sheet and income statement.

How does regulatory reporting work?

Regulatory reporting may sound more daunting than it is, but the truth is, you're probably already doing it without realizing. Regulatory reporting can be done in many ways--internally and externally--and all that technical jargon can make it tricky to understand. There are usually periodic external audits at a properly functioning organization to ensure protocols are being followed as well as regularized internal processes verifying that the proper procedures are occurring.

Examples of ways regulator reporting occurs are:

1. Record keeping

This type of reporting is done by preserving complete records of each transaction and process, making sure that you have incontrovertible proof that you're sticking to the rules.

2. Processes and procedures

Because the various standards and legal rules are often incorporated into a company's normal operations, many common practices that you wouldn't believe were regulatory reporting - from describing your terms and conditions to signing paperwork - do so.

3. Handling complaints

When dealing with a complaint, you must comply with the established procedure – and as such, you must report on it. When you complete paperwork related to a complaint investigation or employee discipline, you're doing regulatory reporting.

4. Filing reports and disclosures

This is the regulatory reporting that people are usually referring to when they talk about the process. Organizations must periodically file certain documents with their regulator, such as an annual or semi-annual report, or in some cases – monthly, quarterly, or even daily reports.

5. Onboarding and formalised training

Any onboarding, training, or performance assessment will be subject to regulation — both on the inside and outside of your organization. As a result, simply following these guidelines is sufficient to satisfy regulatory requirements.

There are many different ways regulatory reporting can occur, and the complexity will vary depending on your organization's size and industry.

What other types of financial institutions are subject to regulatory reporting?

In addition to banks, credit unions, savings and loans, and other depository institutions are subject to regulatory reporting requirements. Insurance companies, investment advisers, broker-dealers, and other financial institutions may also be subject to special regulatory reporting requirements depending on their business activities.

What happens if an institution fails to timely file its regulatory reports?

Filing deadlines for regulatory reports are generally set by the agencies or regulators that require the reports. Failure to timely file a report can result in civil or criminal penalties, depending on the severity of the violation. In some cases, institutions may be subject to cease-and-desist orders or other corrective actions if they fail to properly file their reports.

What are some best practices for regulatory reporting?

There are a number of best practices that financial institutions can follow to ensure compliance with regulatory reporting requirements, including:

-Designating a specific individual or team to responsible for preparing and filing the reports;

-Establishing internal procedures and controls to ensure accuracy and completeness of the information contained in the reports;

-Staying up to date on changes in reporting requirements; and

-Working with experienced professionals, such as accountants or attorneys, to ensure compliance.

Follow these best practices and you will be well on your way to ensuring compliance with regulatory reporting requirements.

The Regulatory Reporting Environment is Complex

The regulatory reporting environment refers to the system of laws, rules, and guidelines that govern the activities of financial institutions. This system is designed to promote the safety and soundness of the financial system and to protect consumers.

The regulatory reporting environment is complex, and it can be difficult for financial institutions to navigate. There are a number of different regulators, supervisors, and bodies that have a role in this environment, and they all have their own specific mandates. Financial institutions must understand the requirements of each of these entities in order to comply with the law.

One of the challenges of the regulatory reporting environment is that it is constantly changing. Financial institutions must be prepared to adapt to new regulations as they are issued. This can be a challenge, particularly for smaller institutions that may not have the resources to keep up with all of the changes.

Another challenge is that the regulatory environment is global in scope. Financial institutions must be aware of the regulations of other countries in order to conduct business internationally. This can be a complex task, as different countries have different approaches to regulation.

The regulatory reporting environment can be a challenge for financial institutions, but it is also an important part of the financial system. By understanding the requirements of the various regulators, financial institutions can ensure that they are complying with the law and protecting consumers.

REGULATION AND REGULATORS

Source of Regulations and Guidelines:

The banking sector is one of the most heavily regulated industries in the world. Regulations and guidelines are issued by various government agencies, international organizations, and standard-setting bodies.

Role of Various Regulators, Supervisors & Bodies:

The role of regulators, supervisors, and other bodies varies depending on the country or jurisdictions in which they operate. In general, however, their primary mandate is to ensure the safety and soundness of the banking system and protect consumers.

Types of Supervised entities:

Banks are the primary type of supervised entity in the banking sector. However, other types of financial institutions, such as credit unions and securities firms, are also subject to regulation.

Significant Institutions vs less Significant Institutions:

Banks are typically classified as either significant or less significant institutions. Significant institutions are those that pose a greater risk to the financial system and are subject to more stringent regulation. Less significant institutions, on the other hand, are subject to less stringent regulation.

Options/Discretions & Waivers Regulatory vs Statutory Groups:

Options and discretions are typically available to regulatory groups, but not statutory groups. Waivers may be available to both regulatory and statutory groups.

STATUTORY GROUP VS REGULATORY GROUP

Regulatory groups v statutory groups:

A regulatory group is a group of companies that are regulated by the same government agency. A statutory group is a group of companies that are subject to the same set of laws.

Group, Solo & Solo Consolidated concepts:

A group is two or more companies that are under common ownership and control. A solo company is a single company that is not part of a group. A consolidated company is a company that is part of a group, but which has its own separate financial statements.

Differences between statutory and regulatory groups:

The main difference between statutory and regulatory groups is that regulatory groups are subject to the same regulations, while statutory groups are subject to the same laws.

REGULATORY RETURNS AND RELEVANT REGULATION

Overview of Regulatory returns (Statistical, Supervisory, Local etc.):

Statistical returns: Statistical returns are used to collect data on the banking sector. They are typically used by central banks and other government agencies.

Supervisory returns: Supervisory returns are used to collect data on the financial condition of banks. They are typically used by banking regulators and supervisors.

Local returns: Local returns are used to collect data on the banking sector in a specific country or jurisdiction. They are typically used by local authorities and banks.

Relevant reporting regulation & guidelines (reporting ITS/Annexes/Q&As/Notes on Compilation etc.):

The following regulations and guidelines are relevant to the reporting of regulatory returns:

International Financial Reporting Standards (IFRS): IFRS are the global accounting standards that banks must use to prepare their financial statements.

Basel III: Basel III is a set of international banking regulations that banks must comply with.

Local reporting requirements: Local reporting requirements vary depending on the country or jurisdiction in which a bank operates.

Taxonomies & Validations:

A taxonomy is a classification system that is used to classify data. A validation is a process that is used to check the accuracy of data.

Submission Process (ONR/XBRL):

The Online Regulatory Reporting (ONR) system is used to submit regulatory returns. The eXtensible Business Reporting Language (XBRL) is used to submit financial data.

Cross Return Alignment:

Cross return alignment is the process of aligning data across different regulatory returns. This is done to ensure that the data is consistent and accurate.

Governance requirements:

Governance requirements vary depending on the country or jurisdiction in which a bank operates. Banks must comply with the governance requirements of their regulator.

ASSURANCE, OVERSIGHT AND INSPECTIONS

Internal Governance & Assurance Framework:

The internal governance and assurance framework is the set of policies and procedures that a bank has in place to ensure that its data is accurate and reliable.

Inspection Process & Findings:

The inspection process is used to assess the compliance of banks with regulatory requirements. Inspections are typically conducted by banking regulators and supervisors.

Challenges (data, technology etc.) and possible solutions:

Data challenges: Ensuring that data is accurate and reliable is a challenge for banks. Possible solutions include the use of data quality assurance tools and the implementation of data governance frameworks.

Technology challenges: The use of technology can help banks to overcome some of the challenges associated with data. Possible solutions include the use of data analytics and the use of cloud-based solutions.

Future Directions:

The future direction for regulatory reporting is towards greater transparency and accountability. Banks will need to continue to invest in data quality assurance tools and technology solutions in order to meet the changing demands of regulators.

Regulatory Reporting Training

Course overview:

In this course, you will learn about the regulatory reporting environment for both financial and non-financial firms. We will cover various topics such as:

- The different types of financial reports that are filed with regulators

- Who is responsible for preparing these reports

- The frequency with which they are prepared and filed

- The consequences of not filing accurate and timely reports

Learning objectives:

By the end of this course, you should be able to:

- Understand the different types of financial reports that are filed with regulators

- Know who is responsible for preparing these reports

- Understand the frequency with which they are prepared and filed

- Understand the consequences of not filing accurate and timely reports

- Prepare some of these reports in a simulated environment

Regulatory Reporting for Banks

Course overview:

Regulatory reporting is the process of submitting data to banking regulators and supervisors. The data that is submitted helps them to monitor the financial condition of banks and to assess the risks that they pose to the financial system. Regulatory reporting is important because it helps to ensure the safety and soundness of the banking sector. It also helps to promote transparency and accountability in the banking industry.

This course will provide an overview of regulatory reporting requirements for banks. The course will cover topics such as statistical returns, supervisory returns, local returns, and the relevant reporting regulation and guidelines.

Course objectives:

By the end of this course, participants should be able to:

- Understand the different types of regulatory returns that banks are required to submit

- Understand the reporting requirements for each type of return

- Understand the submission process for regulatory returns

- Understand the challenges associated with regulatory reporting and possible solutions

Glossary:

Federal reserve system:

The federal reserve system is the central banking system of the United States. It was created by the Federal Reserve Act of 1913.

Timely and accurate filing:

Banks are required to submit their regulatory reports in a timely and accurate manner.

Federal reserve system relies:

The federal reserve system relies on the financial services industry to provide accurate and timely information in order to fulfill its supervisory and regulatory responsibilities.

Financial services industry:

The financial services industry includes banks, investment banks, insurance companies, and other financial institutions.

Regulatory environment:

The regulatory environment is the set of laws, regulations, and guidelines that govern the activities of banks and other financial institutions.

Foreign financial institutions:

Foreign financial institutions are banks and other financial institutions that are located outside of the United States.

Federal deposit insurance corporation:

The federal deposit insurance corporation is a government agency that insures deposits in banks and other financial institutions.

Financial instruments:

Financial instruments are contracts between two parties that have financial value. They include stocks, bonds, and derivatives.

Regulatory compliance:

Regulatory compliance is the process of complying with the laws, regulations, and guidelines that govern the activities of banks and other financial institutions.

Report data:

Report data is information that is reported in regulatory reports. It includes data on assets, liabilities, and capital.

Consumer protection act:

The consumer protection act is a law that requires banks to protect the rights of consumers.

Separate legal entity:

A separate legal entity is a legal entity that is distinct from its owners. It can be a corporation, partnership, or trust.

Reporting institutions:

Reporting institutions are banks and other financial institutions that are required to submit regulatory reports.

Data collected:

Data collected in regulatory reports includes data on assets, liabilities, and capital.

Accurate reports:

Banks are required to submit accurate regulatory reports.

Banking organizations:

Banking organizations are groups of banks that are regulated by the same government agency.

Timely implementation:

Banks are required to implement the requirements of the consumer protection act in a timely manner.

Granular data:

Granular data is data that is collected in a way that allows for detailed analysis.

Financial services:

Financial services are services that are provided by banks and other financial institutions.

Risk management:

Risk management is the process of identifying, assessing, and managing risks.

Federal reserve:

The federal reserve is the central banking system of the United States.

Accurate filing:

Banks are required to submit their regulatory reports in a timely and accurate manner.

Manual processes:

Manual processes are processes that are done by hand. They can be slow and error-prone.

Business lines:

Business lines are the different types of businesses that a bank or financial institution offers.

Stress testing:

Stress testing is a way to test the resilience of a bank or financial institution.

Data sources:

Data sources for regulatory reports can include data from member firms, business lines, and stress tests.

Early identification:

Early identification of problems can help banks and financial institutions avoid potential losses.

Member firms:

Member firms are banks and other financial institutions that are members of a banking organization.

Business requirements:

Business requirements are the requirements that businesses must meet in order to be compliant with the law.

Credit losses:

Credit losses are losses that occur when borrowers default on their loans.

New regulation:

New regulation can impact the way that banks and other financial institutions operate.