Type of instrument in the case of credit extended to investment firms
- Question ID: 2021/0004
- Date of publication: 25/06/2021
- Subject matter: General clarifications
- AnaCredit Manual: Part II
- Data attribute: Type of instrument
Credit extended to investment firms that are non-MFI credit institutions should not be classified as “deposits”.
The Q&A dealing with the sector classification of investment firms authorised as credit institutions clarifies that investment firms which do not conduct business under Article 4(1)(1)(a) of Regulation (EU) No 575/2013 (CRR) as amended by Article 62(3)(a) of Regulation (EU) 2019/2033 should not be treated as monetary financial institutions and are therefore classified as “Other financial intermediaries” under the S.125 institutional sector. In this regard, could you clarify the type of instrument which should be reported under AnaCredit in the case of instruments extended to investment firms? Under what circumstances would they be classified as “deposits other than reverse repurchase agreements”?
AnaCredit Manual Part II (Section 3.4.1) clarifies that the type of instrument “deposits other than reverse repurchase agreements” covers any type of deposit or loan (except those that meet the definition of a reverse repurchase agreement) where the debtor is a monetary financial institution (i.e. when its institutional sector is central banks, credit institutions, deposit-taking corporations other than credit institutions or money market funds).
In line with these clarifications relating to sector classification, investment firms – including investment firms authorised as credit institutions – which do not carry out business under point (a) of Article 4(1)(1) of the amended CRR are not classified as “deposit-taking corporations” (the definition of Sector S.122) and therefore do not qualify as MFIs.
Consequently, credit extended to investment firms which are non-MFI credit institutions should not be classified as deposits under AnaCredit.
Meanwhile, credit other than reverse repurchase agreements extended to investment firms which conduct business under both Article 4(1)(1)(a) and Article 4(1)(1)(b) of the amended CRR, and which are therefore classified under the S.122 institutional sector as “MFI credit institutions”, is reported to AnaCredit as “deposits other than reverse repurchase agreements”.