DESCRIPTIONS
ANNEX IISupplementary provisions
ANNEX II DESCRIPTIONS PART 1 Descriptions of instrument categories 1. Table A provides a detailed standard description of the instrument categories which national central banks (NCBs) must transpose into their national categories in accordance with this Regulation. Neither the list of individual financial instruments in the table nor their corresponding descriptions are intended to be exhaustive. The descriptions refer to the European system of accounts set up by Regulation (EU) No 549/2013 (hereinafter the ‘ESA 2010’). 2. For some of the instrument categories, maturity breakdowns are required. These refer to: (a) original maturity, i.e. maturity at issue, which is the fixed period of life of a financial instrument before which it cannot be redeemed, e.g. debt securities, or before which it can only be redeemed with a penalty, e.g. some types of deposits; or (b) remaining maturity, i.e. the remaining period of life of a financial instrument at the end of the reporting period, before which it cannot be redeemed, e.g. debt securities, or before which it can only be redeemed with a penalty, e.g. some types of deposits. 3. Financial claims can be distinguished by whether they are negotiable or not. A claim is negotiable if its ownership is readily capable of being transferred from one party to another by delivery or endorsement or of being offset in the case of financial derivatives. While any financial instrument can be traded, negotiable instruments are designed to be traded on an organised exchange or ‘over-the-counter’, although actual trading is not a necessary condition for negotiability. Table A Description of instrument categories in the assets and liabilities of insurance corporations (ICs) ASSETS Instrument Category Description of main features 1. Currency and deposits Holdings of euro and foreign currency banknotes and coins in circulation that are commonly used to make payments and deposits placed by the IC with monetary financial institutions (MFIs). They may include overnight deposits, deposits with agreed maturity and deposits redeemable at notice, as well as claims under reverse repos or securities borrowing against cash collateral. 1.1 Transferable deposits Transferable deposits are deposits which are directly transferable on demand to make payments to other economic agents by commonly used means of payment, such as credit transfer and direct debit, possibly also by credit or debit card, e-money transactions, cheques, or similar means, without significant delay, restriction or penalty. Deposits that can only be used for cash withdrawal and/or deposits from which funds can only be withdrawn or transferred through another account of the same owner are not to be included as transferable deposits. 2. Debt securities Holdings of debt securities, which are negotiable financial instruments serving as evidence of debt, are usually traded on secondary markets. They can also be offset on the market and do not grant the holder any ownership rights over the issuing institution. This instrument category includes: — holdings of securities which give the holder the unconditional right to a fixed or contractually determined income in the form of coupon payments and/or a stated fixed sum at a specific date or dates, or starting from a date fixed at the time of issue, — loans which have become negotiable on an organised market, i.e. traded loans, provided that there is evidence of secondary market trading, including the existence of market makers, and frequent pricing of the financial asset, such as demonstrated by bid-offer spreads. Where these criteria are not fulfilled the loans should be classified under instrument category 3 ‘Loans’ (see also ‘traded loans’ in the same category), — subordinated debt in the form of debt securities (see also ‘subordinated debt in the form of loans’ in instrument category 3 ‘Loans’). Securities lent out under securities lending operations or sold under a repurchase agreement remain on the original owner's balance sheet (and are not to be recorded in the balance sheet of the temporary acquirer) where there is a firm commitment to reverse the operation, and not simply an option to do so. Where the temporary acquirer sells the securities received, this sale must be recorded as an outright transaction in securities and entered in the balance sheet of the temporary acquirer as a negative position in the securities portfolio. 3. Loans For the purposes of the reporting scheme, this category consists of funds lent by ICs to borrowers, or loans acquired by ICs, which are either evidenced by non-negotiable documents or not evidenced by documents. The following items are included: — holdings of non-negotiable securities: holdings of debt securities which are not negotiable and cannot be traded on secondary markets, — traded loans: loans that have de facto become negotiable are classified under the category ‘loans’ provided that there is no evidence of secondary market trading. Otherwise, they are classified as debt securities (instrument category 2), — subordinated debt in the form of loans: subordinated debt instruments provide a subsidiary claim on the issuing institution that can only be exercised after all claims with a higher status have been satisfied, giving them some of the characteristics of equity. For statistical purposes, subordinated debt is classified as either ‘loans’ or ‘debt securities’ according to the nature of the instrument. Where an IC's holdings of all forms of subordinated debt are identified as a single figure for statistical purposes, it is to be classified under the category ‘debt securities’, on the grounds that subordinated debt is predominantly constituted in the form of debt securities, rather than as loans, — claims under reverse repos or securities borrowing against cash collateral: counterpart of cash paid out in exchange for securities purchased by reporting agents at a given price under a firm commitment to resell the same or similar securities at a fixed price on a specified future date, or securities borrowing against cash collateral. This category excludes assets in the form of deposits placed by ICs (which are included in category 1). 3.1 Deposit guarantees in connection with reinsurance business Deposits placed by reinsurance corporations as collateral for ICs acting as ceding corporations in reinsurance transactions. 4. Equity Financial assets that represent ownership rights in corporations or quasi-corporations. Such financial assets generally entitle the holders to a share in the profits of the corporations or quasi-corporations, and to a share in their net assets in the event of liquidation. This category includes listed and unlisted shares and other equity. Equity securities lent out under securities lending operations or sold under repurchase agreements are treated in accordance with category 2 ‘Debt securities’. 4.1 Listed shares Equity securities listed on an exchange. The exchange may be a recognised stock exchange or any other form of secondary market. Listed shares are also referred to as ‘quoted shares’. 4.2 Unlisted shares Unlisted shares are equity securities not listed on an exchange. 4.3 Other equity Other equity comprises all forms of equity other than listed shares and unlisted shares. 5. Investment fund shares/units This category includes holdings of shares or units issued by money market funds (MMFs) and non-MMF investment funds (i.e. investment funds other than MMFs) included in the ECB's lists of MFIs and investment funds (IFs) for statistical purposes. 5.1 MMF shares/units Holdings of shares or units issued by MMFs as defined in Article 2 of Regulation (EU) No 1071/2013 (ECB/2013/33). 5.2 Non-MMF shares/units Holdings of shares or units issued by IFs other than MMFs as defined in Article 1 of Regulation (EU) No 1073/2013 (ECB/2013/38). 6. Financial derivatives Financial derivatives are financial instruments linked to a specified financial instrument, indicator, or commodity, through which specific financial risks can be traded in financial markets in their own right. This category includes: — options, — warrants, — futures, — forwards, — swaps, — credit derivatives. Financial derivatives are recorded at market value on the balance sheet on a gross basis. Individual derivative contracts with positive market values are recorded on the asset side of the balance sheet and contracts with negative market values on the liability side of the balance sheet. Gross future commitments arising from derivative contracts should not be entered as on-balance-sheet items. This category does not include financial derivatives that are not subject to on-balance-sheet recording according to national rules. 7. Non-life insurance technical reserves Financial claims of ICs against reinsurance corporations based on life and non-life reinsurance policies. 8. Non-financial assets Tangible and intangible assets, other than financial assets. This category includes dwellings, other buildings and structures, machinery and equipment, valuables, and intellectual property products such as computer software and databases. 9. Remaining assets This is the residual category on the asset side of the balance sheet, defined as ‘assets not included elsewhere’. NCBs may require the reporting of specific sub-positions included in this category. Remaining assets may include: — dividends receivable, — accrued rent receivable, — reinsurance claims receivable, — amounts receivable which do not relate to the IC's main business. LIABILITIES Instrument Category Description of main features 10. Debt securities issued Securities issued by the IC, other than equity, that are usually negotiable instruments and traded on secondary markets, or that can be offset on the market, and do not grant the holder any ownership rights in respect of the issuing institution. 11. Loans received Amounts owed to creditors by the IC, other than those arising from the issue of negotiable securities. This category consists of: — loans: loans granted to the ICs which are either evidenced by non-negotiable documents or not evidenced by documents, — repos and repo-type operations against cash collateral: counterpart of cash received in exchange for securities sold by the IC at a given price under a firm commitment to repurchase the same (or similar) securities at a fixed price on a specified future date. Amounts received by the IC in exchange for securities transferred to a third party (the ‘temporary acquirer’) are to be classified here where there is a firm commitment to reverse the operation and not merely an option to do so. This implies that the IC retains all risks and rewards of the underlying securities during the operation, — cash collateral received in exchange for securities lending: amounts received in exchange for securities temporarily transferred to a third party in the form of securities lending operations against cash collateral, — cash collateral received in operations involving the temporary transfer of gold against collateral. 11.1 Deposit guarantees in connection with reinsurance business Deposits received by ceding corporations as collateral from reinsurance corporations. 12. Equity See category 4. 12.1 Listed shares See category 4.1. 12.2 Unlisted shares See category 4.2. 12.3 Other equity See category 4.3. 13. Insurance technical reserves The amount of capital that the IC holds in order to meet the future insurance claims of its policyholders. 13.1 Life insurance technical reserves The amount of capital that the IC holds in order to meet the future insurance claims of its life insurance policyholders. 13.1.1 of which Unit-linked life insurance technical reserves The amount of capital that the IC holds in order to meet the future insurance claims of its unit-linked life insurance policyholders. The policyholder's future claims under a unit-linked life insurance contract depend on the performance of a pool of assets in which the policyholder's funds are invested. 13.1.2 of which Non–unit-linked life insurance technical reserves The amount of capital that the IC holds in order to meet the future insurance claims of its non–unit-linked life insurance policyholders. The policyholder's future claims under a non–unit-linked life insurance contract do not depend on the performance of any defined pool of assets. 13.1.3 of which Pension entitlements The amount of capital that the IC holds in order to meet the future claims of its pension schemes. This category only refers to occupational pension plans. Individual pension plans that are not linked to an employment relationship do not fall into this category. 13.1.3.1 Pension entitlements of which Defined contribution schemes The amount of capital that the IC holds in order to meet the future insurance claims of its defined contribution scheme policyholders. In a defined contribution scheme the benefits paid are dependent on the performance of the assets acquired by the pension scheme. The liability of a defined contribution scheme is the current market value of the fund's assets. 13.1.3.2 Pension entitlements of which Defined benefit schemes The amount of capital that the IC holds in order to meet the future insurance claims of its defined benefit scheme policyholders. In a defined benefit pension scheme the level of pension benefits promised to participating employees is determined by a formula agreed in advance. The liability of a defined benefit pension scheme is equal to the present value of the promised benefits. 13.1.3.3 Pension entitlements of which Hybrid schemes The amount of capital that the IC holds in order to meet the future insurance claims of its schemes combining elements of defined contribution and defined benefit schemes. 13.2 Non-life insurance technical reserves The amount of capital that the IC holds in order to meet the future insurance claims of its non-life insurance policyholders. 13.2.1 Medical expense insurance Medical expense insurance obligations where the underlying business is not pursued on a similar technical basis to that of life insurance, other than obligations included in line of business 13.2.3. 13.2.2 Income protection insurance Income protection insurance obligations where the underlying business is not pursued on a similar technical basis to that of life insurance, other than obligations included in line of business 13.2.3. 13.2.3 Workers' compensation insurance Health insurance obligations which relate to accidents at work, industrial injury and occupational diseases and where the underlying business is not pursued on a similar technical basis to that of life insurance. 13.2.4 Motor vehicle liability insurance Insurance obligations which cover all liabilities arising out of the use of motor vehicles operating on land (including carrier's liability). 13.2.5 Other motor insurance Insurance obligations which cover all damage to or loss of land vehicles (including railway rolling stock). 13.2.6 Marine, aviation and transport insurance Insurance obligations which cover all damage or loss to sea, lake, river and canal vessels, aircraft, and damage to or loss of goods in transit or baggage irrespective of the form of transport. Insurance obligations which cover liabilities arising out of the use of aircraft, ships, vessels or boats on the sea, lakes, rivers or canals (including carrier's liability). 13.2.7 Fire and other damage to property insurance Insurance obligations which cover all damage to or loss of property, other than those included in lines of business 13.2.5 and 13.2.6, due to fire, explosion, natural forces including storm, hail or frost, nuclear energy, land subsidence and any event such as theft. 13.2.8 General liability insurance Insurance obligations which cover all liabilities other than those in lines of business 13.2.4 and 13.2.6. 13.2.9 Credit and suretyship insurance Insurance obligations which cover insolvency, export credit, instalment credit, mortgages, agricultural credit and direct and indirect suretyship. 13.2.10 Legal expenses insurance Insurance obligations which cover legal expenses and the cost of litigation. 13.2.11 Assistance Insurance obligations which cover assistance for persons who get into difficulties while travelling, while away from home or while away from their habitual residence. 13.2.12 Miscellaneous financial loss Insurance obligations which cover employment risk, insufficiency of income, bad weather, loss of benefit, continuing general expenses, unforeseen trading expenses, loss of market value, loss of rent or revenue, indirect trading losses other than those mentioned above, other financial loss (non-trading) as well as any other risk of non-life insurance not covered by lines of business 13.2.1 to 13.2.11. 13.2.13 Reinsurance Reinsurance obligations. 14. Financial derivatives See category 6. 15. Remaining liabilities This is the residual item on the liabilities side of the balance sheet, defined as ‘liabilities not included elsewhere’. NCBs may require the reporting of specific sub-positions included in this category. Remaining liabilities may include: — amounts payable not related to the IC's main business, i.e. amounts due to suppliers, tax, wages, social contributions, etc., — provisions representing liabilities against third parties, i.e. pensions, dividends, etc., — net positions arising from securities lending without cash collateral, — net amounts payable in respect of future settlements of transactions in securities. PART 2 Descriptions of security-by-security attributes Table B Descriptions of security-by-security attributes Field Description Security identifier code A code that uniquely identifies a security, subject to the NCB's instructions (e.g. NCB identification number, CUSIP, SEDOL). Number of units or aggregated nominal amount Number of units of a security, or aggregated nominal amount if the security is traded in amounts rather than in units, excluding accrued interest. Price Market price per unit of a security, or percentage of the aggregated nominal amount if the security is traded in amounts rather than in units. NCBs may also require accrued interest to be reported under this position. Quotation basis Indicates whether the security is quoted as a percentage or in units. Total amount Total market value of a security. In the case of securities that are traded in units, this amount equals the number of securities multiplied by the price per unit. Where securities are traded in amounts rather than in units, this amount equals the aggregated nominal amount multiplied by the price which is expressed as a percentage of the nominal amount. NCBs must in principle require accrued interest to be reported either under this position or separately. However, NCBs may in their discretion require data excluding accrued interest. Financial transactions The sum of purchases minus sales (securities on the asset side) or issues minus redemptions (securities on the liability side) of a security recorded at transaction value in euro. Securities purchased The sum of purchases of a security recorded at transaction value. Securities sold The sum of sales of a security recorded at transaction value. Currency of recording of the security ISO code or equivalent of the currency used to express the price and/or the outstanding amount of the security. Other changes in volume at nominal value Other changes in the volume of the security held, at nominal value in nominal currency/unit or euro. Other changes in volume at market value Other changes in the volume of the security held, at market value in euro. Portfolio investment or direct investment The function of the investment according to its classification in balance of payment statistics ( 1 ) . Issuer country The residence of the issuer. In the case of investment fund shares/units, the issuer country refers to the place where the investment fund is resident and not the residence of the fund manager. PART 3 Table C Descriptions of premiums, claims and commissions Category Description Premiums written Gross premiums written comprising all amounts due during the financial year in respect of insurance contracts, regardless of the fact that such amounts may relate in whole or in part to a later financial year. Claims incurred Sum of the claims paid in respect of the financial year and the provision for claims for that financial year, minus the provision for claims for the preceding financial year. Commissions Acquisition expenses paid by ICs to other entities to sell their products. PART 4 Descriptions by sector The ESA 2010 provides the standard for sector classification. Table D provides detailed descriptions of those sectors which NCBs must transpose into their national classifications in accordance with this Regulation. Counterparties resident in the territories of the Member States whose currency is the euro are identified according to their sector in accordance with the lists maintained by the European Central Bank (ECB) for statistical purposes and the guidance for the statistical classification of counterparties provided in the ECB's ‘Monetary Financial Institutions and Markets Statistics Sector Manual: Guidance for the Statistical Classification of Customers’ ( 2 ) . Table D Descriptions by sector Sector Descriptions 1. MFI MFIs are defined in Article 1 of Regulation (EU) No 1071/2013 (ECB/2013/33). The MFI sector consists of NCBs, credit institutions as defined in Union law, MMFs, other financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs and, for their own account, at least in economic terms, to grant loans and/or make investments in securities, and electronic money institutions that are principally engaged in financial intermediation in the form of issuing electronic money. 2. General government The general government sector (S.13) consists of institutional units that are non-market producers whose output is intended for individual and collective consumption and that are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth (the ESA 2010, paragraphs 2.111 to 2.113). 3. Other financial intermediaries, except ICs and pension funds + non-MMF IFs + financial auxiliaries + captive financial institutions and money lenders The other financial intermediaries, except ICs and pension funds subsector (S.125) consists of all financial corporations and quasi-corporations which are principally engaged in financial intermediation by incurring liabilities in forms other than currency, deposits (or close substitutes for deposits), IF shares/units, or in relation to insurance, pension and standardised guarantee schemes from institutional units. FVCs as defined in Regulation (EU) No 1075/2013 (ECB/2013/40) are included in this subsector (the ESA 2010, paragraphs 2.86 to 2.94). Non-MMF IFs are defined in Article 1 of Regulation (EU) No 1073/2013 (ECB/2013/38). The financial auxiliaries subsector (S.126) consists of all financial corporations and quasi-corporations which are principally engaged in activities closely related to financial intermediation but which are not financial intermediaries themselves. This subsector also includes head offices whose subsidiaries are all or mostly financial corporations (the ESA 2010, paragraphs 2.95 to 2.97). The captive financial institutions and money lenders subsector (S.127) consists of all financial corporations and quasi-corporations which are neither engaged in financial intermediation nor in providing financial auxiliary services, and where most of either their assets or their liabilities are not transacted on open markets. This subsector includes holding companies that hold controlling levels of equity in a group of subsidiary corporations and whose principal activity is owning the group without providing any other service to the businesses in which the equity is held, that is, they do not administer or manage other units (the ESA 2010, paragraphs 2.98 and 2.99). 4. ICs ICs are defined in Article 1 of this Regulation. 5. Pension funds The pension funds subsector (S.129) consists of all financial corporations and quasi-corporations that are principally engaged in financial intermediation as a consequence of the pooling of social risks and needs of the insured persons (social insurance). Pension funds as social insurance schemes provide income in retirement and often benefits on death and disability (the ESA 2010, paragraphs 2.105 to 2.110). Social security funds falling within the general government sector are excluded. 6. Non-financial corporations The non-financial corporations sector (S.11) consists of institutional units that are independent legal entities and market producers, and whose principal activity is the production of goods and non-financial services. This sector also includes non-financial quasi-corporations (the ESA 2010, paragraphs 2.45 to 2.50). 7. Households + non-profit institutions serving households The households sector (S.14) consists of individuals or groups of individuals, as consumers and as entrepreneurs, producing market goods and providing non-financial and financial services (market producers), provided that the production of goods and services is not carried out by separate entities that are quasi-corporations. It also includes individuals or groups of individuals that produce goods and non-financial services for exclusively own final use. The household sector includes sole proprietorships and partnerships that are not independent legal entities, other than those treated as quasi-corporations, and that are market producers (the ESA 2010, paragraphs 2.118 to 2.128). The non-profit institutions serving households sector (S.15) consists of non-profit institutions that are separate legal entities, serve households and are private non-market producers. Their principal resources are voluntary contributions in cash or in kind from households in their capacity as consumers, from payments made by general government and from property income (the ESA 2010, paragraphs 2.129 and 2.130). PART 5 Descriptions of financial transactions and revaluation adjustments for the purposes of this Regulation 1. ‘Financial transactions’ are measured in terms of the difference between stock positions at end-period reporting dates, from which the effects of changes resulting from the influence of ‘revaluation adjustments’ (as a consequence of price and exchange rate changes) and ‘reclassifications and other adjustments’ are removed. The ECB requires statistical information for the purpose of compiling data on financial transactions in the form of adjustments that involve ‘reclassifications and other adjustments’ as well as ‘price and exchange rate revaluations’. 2. ‘Price and exchange rate revaluations’ reflect changes to the valuation of assets/liabilities arising either from changes in the price at which assets/liabilities are recorded or traded, or from changes in exchange rates that affect the values, expressed in euro, of assets and liabilities denominated in a foreign currency. Price revaluations take into account the changes that occur over time in the value of end-period stocks because of changes in the reference values at which such stocks are recorded, i.e. holding gains/losses. Movements in exchange rates against the euro that occur between end-period reporting dates also result in changes in the value of foreign currency assets/liabilities when expressed in euro. As these changes represent holding gains/losses and are not due to financial transactions, these effects need to be removed from the financial transaction data. In principle, ‘price and exchange rate revaluations’ also takes account of changes in value that result from transactions in assets/liabilities, i.e. realised gains/losses; however, there are different national practices in this regard. ( 1 ) Guideline ECB/2011/23 of 9 December 2011 on the statistical reporting requirements of the European Central Bank in the field of external statistics ( OJ L 65, 3.3.2012, p. 1 ). ( 2 ) March 2007, available on the ECB's website at https://www.ecb.europa.eu/