Statistical Reporting Transition Notices to Reporting Banks 2006/01

Introduction to statistical reporting
Individual form reporting requirements
Guidance on data submission
Explanation of the plausibility process
Seminar on the transfer of societies statistical reporting to the Bank of England
Mapping between current building societies' forms and Bank of England forms
List of key contacts at the Bank of England

1. Introduction to statistical reporting

The Bank of England compiles and publishes a range of monetary and financial statistics. These statistics are derived from data supplied by monetary financial institutions (including banks and building societies). They are required by the Bank for monetary policy purposes and contribute to the UK national and financial account statistics, compiled and published by the Office for National Statistics (ONS).

The Bank of England Act 1998 gives the Bank powers to obtain information, in Section 17 (for the Bank’s monetary policy function) and Schedule 2 (for calculation of cash ratio deposits); the Bank of England (Information Powers) Order 1998, which came into force on 1 June 1998, specifies the types of financial affairs about which the Bank may require information under Section 17 of the Act.

The Monetary and Financial Statistics Division is responsible for compiling and publishing these data in a clear, accurate, and cost effective manner, in line with the Bank’s Code of Practice for statistics

2. Individual form reporting requirements

The Bank has well established reporting thresholds for banks operating in the UK. These will form the basis for the building societies’ reporting requirements but there are several changes expected to these over the next year. These changes are being driven by the Bank’s Cost Benefit Analysis Project which includes a review of all reporting forms over a 5 year period.

The bulk of those listed in the reporting thresholds document are either in the process of being reviewed or will have reviews started in 2007 or 2008. The reviews include a reassessment of the reporting thresholds with the aim of reducing the reporting populations where possible. Where a full population is required at a certain frequency but a smaller population is required more often, it is expected that the smaller population will be reduced. For example, the Bank is currently considering increasing the reporting threshold for completing the balance sheet return (Form BT) on a monthly basis to a higher level of eligible liabilities than the current £100mn. This could mean that many societies would be released from monthly balance sheet reporting but would be required to report the Form BT as at the end of the calendar quarter.

Following the order of the reporting thresholds document, the following points should be borne in mind.

Form BT (balance sheet return) – as outlined above, the monthly reporting threshold is likely to be based on a higher level of eligible liabilities.

Form BE (sect oral analysis of certain instruments) – the reporting threshold is likely to be based on an institution’s business with the UK private sector.

Form QX (various levels and transactions) – the transactions sections (sections 2 and 3) of this form have been discontinued. The remaining sections will be reorganised into new returns probably in 2007. Of the new returns, some building societies may be required to submit write-offs data, but are unlikely to be requested to complete the other new returns until the start of 2009 at the earliest to reduce the initial burden and allow more time for the transition to Bank of England reporting.

Form Q1(D) (lending to individuals) - the thresholds are unlikely to change meaningfully before the start of 2008 although the form may be amended.

Forms AD and AL (industrial analysis of deposits and lending) – these returns are being reviewed and positions with individuals are likely to be removed from the returns. The reporting threshold is likely to be based on an institution’s lending to the UK private sector excluding individuals. It is expected that very few societies will be required to complete these returns.

Form DQ (derivatives) – the transactions section of this return is likely to be discontinued. A building society would have to have significant derivative positions (currently over £1bn but likely to be increased significantly) to be required to complete this return. The ONS currently receive derivatives data for building societies (from the MFS1) and they will need to be consulted about the discontinuation of these data.

Form PL (profit and loss) – It is likely that the threshold for quarterly reporting (currently total balance sheet of £1bn) will increase significantly in the next year or so but the revised threshold is still to be decided. If a building society believes it will have difficulties completing this return over and above their current reporting requirements for profit and loss data please contact Martin Udy (Tel. 020 7601 4731).

Forms CA, CC and CL (currency and country analyses) – the threshold for these forms is being reviewed but no building societies will be asked to report these forms before the start of 2009 at the earliest to reduce the initial burden and allow more time for the transition to Bank of England reporting.

Form ER (effective interest rates) – only the very large societies are likely to be required to complete this return.

Forms BG (country analysis of profit/loss data), HI (inward investment) and HO (outward investment) - the thresholds for these forms are being reviewed but no building societies will be asked to report these forms before the start of 2009 at the earliest to reduce the initial burden and allow more time for the transition to Bank of England reporting.

Forms C1 and CE (worldwide consolidated returns for UK owned institutions) – The C1 is completed only by foreign-owned subsidiaries and so is not relevant for building societies. Form CE will only be applicable if a building society has a large non-resident business or a significant branch network outside the UK and will be discussed with each large society individually.

Forms MM and MQ - building societies’ secured lending subsidiary companies, currently reporting the MFS2, are required to complete Forms MM and MQ. Form MM is an 'analysis of secured lending to individuals and individuals' trusts by specialist mortgage institutions, while Form MQ is a summary balance sheet.

3. Guidance on data submission

All returns must be completed in accordance with a schedule of end-month, quarter or year reporting dates as opposed to accounting dates. The reporting date may fall on any day of the week, i.e. the last calendar day of the month, quarter or year (which includes weekends and bank holidays).

Our preferred method of reporting is electronic, as opposed to paper. The table below shows the deadlines for all returns after the month, quarter or year end. For all forms other than PL, C1, CE, BG, HI and HO the deadlines are given in working days after the period end. The differences between the paper and electronic reporting dates reflect the time savings generated by electronic reporting, and typically allow an extra one or two days for electronic reporters for certain returns:

Form	Paper reporters	Electronic reporters
BT	6 days	7 days
MM, MQ	10 days	10 days
BE	12 days	12 days
Q1(D)	13 days	13 days
AD, AL	13 days	15 days
ER	13 days	13 days
CA	15 days	17 days
CL,CC,QX	18 days	20 days
DQ	20 days	20 days
PL	7 weeks	7 weeks
C1, CE	7 weeks	7 weeks, 2 days
BG	2 months	2 months
HI, HO	12 weeks	12 weeks

All institutions wishing to send the Bank of England returns electronically need to use the format specified in the Bank of England Electronic Reporting Systems (BEERS) technical specification.

The returns are sent in an ASCII format that is then compressed using WinZip. This is then encrypted using software from Sophos (called PUBLIC) for data security purposes. PUBLIC protects the information being sent using digital signatures and encryption. The encrypted file is then emailed to a dedicated email address at the Bank and a receipt is automatically generated and transmitted to the sender.

Certain software houses have created systems to enable reporting institutions to send returns to the Bank in the BEERS format. There are currently seven software houses that are recognised as providing appropriate electronic reporting facilities.

Related resources

	Link to Electronic reporting pages
	Reporting schedules

4. Explanation of plausibility checking process

Once forms have been submitted to the Bank and are validated within the reporting system, they are loaded on to the internal database, known as MIDAS, and a set of plausibility rules are run against each form. These rules check for large or unusual movements using specific thresholds set for each form by the team responsible for that form. Any data breeching the thresholds are then reviewed to see if questions on these breeches should be raised with the reporting institution. Questions are raised as quickly as possible, usually the next working day, and reasonable deadlines for answering the questions are given. Certain forms will have shorter deadlines than others, depending on the use of the data reported and the speed with which the forms are submitted to the Bank.

Generally, explanations behind the movements are requested rather than a simple confirmation that the data are correct, as this aids understand of the business and hence may reduce the need for future plausibility questions.

Once all institutions have sent in their returns and answered the initial plausibility questions, a second round of checks is undertaken to ensure that movements at a sector level look realistic and any large or unusual movements can be explained. Occasionally this will result in additional questions being raised with reporting institutions. Again these will be raised as quickly as possible and reasonable deadlines set for answers.

5. Seminar on the transfer of societies statistical reporting to the Bank of England

A seminar to provide more information on the Bank’s statistical reporting requirements for building societies has been arranged for Monday 6 November 2006 in the Conference Centre at the Bank of England. The seminar will expand on the information within this notice, release a proposed mapping document between the current building society and Bank of England returns and give the societies a chance to ask questions and discuss reporting issues with the project team. The seminar is likely to run from 10am to 4pm and will include:

Introduction from Jo Paisley, Head of the Monetary and Financial Statistics Division
The structure of the statistical area of the Bank
Details of the Bank’s Building Society Reporting Project (including a chance to meet the members of the project team).
Information on the Bank’s reporting requirements for building societies
The launch of mapping document(s) between the current building society and Bank of England forms (where possible)
Use of building societies data (including Cash Ratio Deposit calculations)

6. Mapping between current building society forms and Bank of England forms

As mentioned above, the Bank are currently working on producing a mapping between the current building society reporting forms sent to the FSA and the Bank of England returns. This mapping will be launched at the building society reporting seminar on 6th November, but the Bank hope to send an advance copy to the societies a few days prior to the seminar to allow them to give feedback on their initial views of the document(s) at the seminar and also raise any questions they may have.

There will be a number of definitional issues between the two sets of reporting forms and it is hoped this mapping exercise will bring some of these to light. Once identified, the Bank may need to discuss these with the societies and may look to raise some initial questions at the seminar.

7. List of key contacts at the Bank of England

General Issues	Pat O'Connor	020 7601 4450
Data Submission Issues	Leslie Lambert	020 7601 4544
Cash Ratio Deposits	Sarah Waddington	020 7601 5505

Individual Forms:

BT, BE, Q1(D), QX, AD, AL, MM/MQ	Sue Docker	020 7601 3236
CA, CC, CL, CE, C1, DQ	Pat O'Connor	020 7601 4450
PL, BG, HI, HO	Martin Udy	020 7601 4731
ER	Mhairi Burnett	020 7601 5479

Bank of England
Monetary & Financial Statistics Division
26 September 2006

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