The rule in plain words
None of the values it checks in fair value hierarchy can be negative.
EBA checks it for four columns: fair value, level 1, level 2 and level 3. And for 19 rows, from financial assets at amortised cost (0015) to other financial liabilities (0104). That makes 76 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.
Fair value: Financial assets at amortised cost >= 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 F 41.01 as reported.
- 05This is a blocking check. A filing that fails it is normally rejected, so fix it before you submit.
The cells it reads
Fair value hierarchy: financial instruments at amortised cost (F 41.01)
Rows
- 0015Financial assets at amortised cost
- 0016Debt securities
- 0017Loans and advances
- 0021Non-trading non-derivative financial assets measured at a cost-based method
- 0022Equity instruments
- 0023Debt securities
- 0024Loans and advances
- 0031Other non-trading non-derivative financial assets
- 0032Equity instruments
- 0033Debt securities
- 0034Loans and advances
- 0070Financial liabilities measured at amortised cost
- 0080Deposits
- 0090Debt securities issued
- 0100Other financial liabilities
- 0101Non-trading non-derivative financial liabilities measured at a cost-based method
- 0102Deposits
- 0103Debt securities issued
- 0104Other financial liabilities
Columns
- 0010Fair value
- 0020Level 1
- 0030Level 2
- 0040Level 3
A worked example
The first of its checks, with simple numbers.
Financial assets at amortised cost, fair value 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}.
{F_41.01,r0015,c0010,} >= 0The next five:
{F_41.01,r0015,c0020,} >= 0{F_41.01,r0015,c0030,} >= 0{F_41.01,r0015,c0040,} >= 0{F_41.01,r0016,c0010,} >= 0{F_41.01,r0016,c0020,} >= 0And 70 more, the same formula for the other cells it covers.
Other rules on F 41.01
- Financial liabilities measured at amortised cost must equal the sum of its three parts (v1095_m)Warning
- Fair value must equal level 1 plus level 2 plus level 3 (v1094_m)Warning
- Financial liabilities measured at amortised cost must equal the sum of its three parts (v23879_h)Warning
- Non-trading non-derivative financial liabilities measured at a cost-based method must equal the sum of its three parts (v23880_h)Warning
- Non-trading non-derivative financial assets measured at a cost-based method must equal the sum of its three parts (v23923_h)Warning
- Other non-trading non-derivative financial assets must equal the sum of its three parts (v23924_h)Warning
- Financial assets at amortised cost must equal debt securities plus loans and advances (v903639_h)Warning
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.