コンプライアンス対応のRegulatory Reporting

External reports and compliance refers to the disclosure filings that are required by regulating agencies like the SEC. Public facing companies must comply with filing guidelines set out by regulators and accounting rules depending on region, IFRS or US GAAP. These documents are submitted under the intention of transparency; it’s the responsibility of public companies to ensure that stakeholders and investors know what they’re getting themselves into by being involved in a company. This way external stakeholders can continue to support, or otherwise withdraw their support, based on results.

Supervisory reporting is the mandatory recognition and reporting for financial companies, banks, securities, and investment firms required by supervisory bodies, like the Committee of Banking Supervision (CEBS) or European Banking Authority (EBA). Supervisory and regulatory reports contain consolidated data, balance sheets and income information.

This reporting allows the financial institution controlling the entities to analyze the financial situation of the institution. These vary from industry to industry:

• Banking: Basel III, FinRep CoRep
• Insurance: Solvency II

Basel II is the second of the Basel Accords which were put in place by the Basel Committee on Banking Supervision in 2004 in an effort to mitigate banking and economic risk. Effective in 2004, Basel II expanded on Basel I and established three pillars: 

• Pillar 1: Minimum Capital Requirements
• Pillar 2: Regulatory Supervision
• Pillar 3: Market Discipline

The minimum capital requirement imposed by Basel II was its greatest contribution to the Basel accords, ensuring that banks had to maintain minimum capital ratios of regulatory capital over risk-weighted assets. Basel II has now been superseded by Basel III.

Basel III is the third of the Basel Accords which were put in place by the Basel Committee on Banking Supervision in 2004 in an effort to mitigate banking and economic risk. Effective in 2009, in the wake of the 2008 financial crisis, Basel III is composed of three pillars:

• Pillar 1: sets minimum capital requirements and outlines capital adequacy
• Pillar 2: establishes supervisory review requirements of capital adequacy assessments
• Pillar 3: imposes greater market discipline and stringent disclosure of capital structure. Adequacy and risk weighted assets are required by the regulatory authorities

The main goal of Basel III is to improve transparency in banks, how they deal with economic stress and strengthen individual banks in order to avoid widespread crashes. Basel III in particular works to ensure that all banks are held accountable, even those deemed “too big to fail.”