Integration of Pillar III Disclosures into Regulatory Reporting

EBA’s comprehensive Pillar III framework in a nutshell

With its disclosure reform, EBA is introducing a comprehensive framework, which covers all Pillar 3 disclosure topics with a single standard, to increase the ease of use and the comparability of the information and thus further promote market discipline.

The key targets that are addressed through EBA’s new Pillar III reporting framework are to increase the clarity of the Pillar 3 policy framework by providing a single comprehensive package and fostering the ease of use for institutions by providing easy-to-understand templates. Furthermore, EBA is increasing the consistency and comparability of the information disclosed by institutions, especially by aligning with Basel Pillar III standards, using fixed templates, providing more standardization through common definitions, and integrating disclosure with reporting, incl. mapping quantitative disclosures to supervisory reporting. To facilitate access to key information for users, new key metrics templates are introduced, and the proportionality of reporting and the frequency are aligned with the size of the reporting firm.

Despite the advantages that the new EBA Pillar III framework will certainly bring to the whole economy, reporting institutions face new challenges in reporting and data procurement.

Amongst others, the increased volume of disclosures affects data procurement, data adjustments and data reconciliation and is one of the main challenges for reporting firms. The limited availability of authorized data sources and the need to rely on source systems, enduser applications, and spreadsheets, signify a significant challenge, with aspects around data governance, data quality and metadata management.

Regnology helps reporting firms meet the challenges resulting from the new pillar III disclosure requirements

With Abacus Data and Calculation Engine, we provide our customers with a standard solution for regulatory reporting. Covering the Pillar I and the current Pillar III requirements already, we will support reporting firms to face the upcoming challenges arising from EBAs upcoming Pillar III framework as follows:

High volume of disclosures

• Dedicated disclosure modules for prudential and financial disclosure
• Future coverage of disclosure requirements on resolution reporting
• Disclosure for investment firms (planned)

Data governance and data management

• Integrated, single data model covering Pillar I and Pillar III data
• Flexibility for sourcing data (raw or ready calculated, additive load of additionally required data)
• Drill-down and data lineage from report to input data
• Traceability, reconciliation and (cross-)validation
• Historization of calculations

Compliance

• Reporting based on EBA’s standardized fixed templates for quantitative data
• Support of qualitative disclosures using ITS flexible tables
• „Embedded EBA mapping of Pillar I data (already part of our solution) to Pillar III templates“
• Support of required submission formats

Monitoring and Updating

• Constant monitoring of regulatory changes
• Automatic updates

Abacus Data and Calculation Engine automates reporting process, from data delivery through to data analysis, audit and preparation of reports - including calculations and validation - and all the way to submission to the regulatory authorities.