The rule in plain words
Amount cannot be negative.
EBA checks it for five rows: fixed overhead requirement, annual fixed overheads of the previous year after distribution of profits, total expenses of the previous year after distribution of profits, fixed expenses incurred on behalf of the investment firms by third parties and projected fixed overheads of the current year. That makes five checks. A failure names the one that failed.
How the Line4 Check report words itShowHide
The first of its checks, word for word as the report shows it when it fails. The others read the same, with their own column, row or sheet.
Fixed overhead requirement >= 0
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Look for a value with the wrong sign in these cells, such as an amount entered as a negative number.
- 03EBA compares the values exactly here: there is no rounding tolerance.
- 04It runs only when your filing indicators mark I 03.01 as reported.
- 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.
The cells it reads
Fixed overheads requirement calculation (Class 3 IF) (I 03.01)
Rows
- 0010Fixed overhead requirement
- 0020Annual fixed overheads of the previous year after distribution of profits
- 0030Total expenses of the previous year after distribution of profits
- 0040Of which: Fixed expenses incurred on behalf of the investment firms by third parties
- 0200Projected fixed overheads of the current year
Column
- 0010Amount
A worked example
The first of its checks, with simple numbers.
Fixed overhead requirement must then be at least 0.
A file that reports 0 passes. One that reports -100 fails, by 100.
The numbers are illustrative.
Show the rule as writtenShowHide
EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.
{I_03.01,r0010,c0010,} >= 0The next four:
{I_03.01,r0020,c0010,} >= 0{I_03.01,r0040,c0010,} >= 0{I_03.01,r0030,c0010,} >= 0{I_03.01,r0200,c0010,} >= 0Other rules on I 03.01
- Liquidity requirement cannot be less than fixed overhead requirement times 1 divided by 3 (v11141_m)Warning
- Fixed expenses incurred on behalf of the investment firms by third parties cannot be more than total expenses of the previous year after distribution of profits (v11145_m)Warning
- Amount cannot be more than zero (v11198_s)Warning
Every IFR class 3 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.