Definition of "location"

Answer · verbatim

Paragraph 270, Annex V, Part 2 of Commission Implementing Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) states that, for the purposes of templates from F 20.01 to F 20.03:

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…] location’ means the jurisdiction of incorporation of the legal entity which has recognised the corresponding asset or liability; for branches, it means the jurisdiction of its residence. For these purposes, ‘domestic’ shall include the activities recognised in the Member State where the reporting institution is located.

The definition above thus stipulates that location shall mean the jurisdiction of incorporation of the (non-branch) legal entity which has recognised the corresponding asset or liability.

This means that, in a cross-border banking group, a reporting institution shall recognise as “domestic”:

all assets and liabilities pertaining to its own non-consolidated accounts; and

all assets and liabilities pertaining to the non-consolidated accounts of its controlled institutions incorporated within the same jurisdiction.

Conversely, the reporting institution shall recognise as “non-domestic” all assets and liabilities pertaining to the non-consolidated accounts of its controlled institutions incorporated in different jurisdictions.

For branches, the jurisdiction of incorporation is substituted with the jurisdiction of its residence for the purposes of the determination of the “location”.

In the example provided, if the bank is an institution incorporated in jurisdiction X, it shall recognise as domestic the loans granted to the borrowers from other countries.

It should be noted that, for the purposes of templates from 20.04 to 20.07, information country-by-country shall be reported on the basis of the residence of the immediate counterparty (paragraphs 271, Part 2 and 43, Part 1, Annex V of ITS on Supervisory Reporting).