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Annex V Part 2 §280 F 22.01 c0010
For the purposes of the calculation of the threshold in Article 9(f) of this Regulation, the amount of ‘net fee and commission income’ shall be the absolute value of the difference between ‘fee and commission income’ and ‘fee and commission expense’. For the same purposes, the amount of ‘net interest’ shall be the absolute value of the difference between ‘interest income’ and ‘interest expenses’.
Annex V Part 2 §281 F 22.01 r0230
The fee and commission income and expenses shall be reported by type of activity. Under IFRS, this template shall include fee and commission income and expenses other than both of the following:
(a) amounts considered for the calculation of the effective interest of financial instruments (IFRS 7.20.(c));
(b) amounts arising from financial instruments that are measured at fair value through profit or loss (IFRS 7.20.(c).(i)).
Annex V Part 2 §282 F 22.01 r0230
Transaction costs directly attributable to the acquisition or issue of financial instruments not measured at fair value through profit or loss shall not be included. Those transaction costs shall form part of the initial acquisition/issue value of those instruments and shall be amortised to profit or loss over their residual life using the effective interest rate (IFRS 9.5.1.1).
Annex V Part 2 §283 F 22.01 r0230
Under IFRS, transaction costs directly attributable to the acquisition or issue of financial instruments measured at fair value through profit or loss shall be included as a part of ‘Gains or losses on financial assets and liabilities held for trading, net’, ‘Gain or losses on non-trading financial assets mandatorily at fair value through profit or loss, net’ and ‘Gains or losses on financial assets and liabilities designated at fair value through profit or loss, net’, depending on the accounting portfolio in which those transaction costs are classified. Those transaction costs shall not be part of the initial acquisition or issuance value of those instruments and shall be immediately recognized in profit or loss.
Annex V Part 2 §284 F 22.01 r0230, r0235, r0240, r0245, r0250, r0255, r0260, r0270, r0280, r0281, r0282, r0290
Institutions shall report fee and commission income and expenses in accordance with the following criteria:
(a) ‘Securities. Issuances’ shall include fees and commissions received for the involvement in the origination or issuance of securities not originated or issued by the institution;
(b) ‘Securities. Transfer orders’ shall include fees and commissions generated by the reception, transmission and execution on behalf of customers of orders to buy or sell securities;
(c) ‘Securities. Other fee and commission income in relation to securities’ shall include fees and commissions generated by the institution providing other services related with securities not originated or issued by the institution;
(d) Under fee and commission expenses, ‘securities’ shall include fees and commissions charged to the institution where it is receiving services related with securities regardless of whether they are originated or issued by the institution or not;
(e) ‘Corporate Finance. M&A advisory’ shall include fees and commissions for advisory services surrounding corporate clients’ mergers and acquisitions activities;
(f) ‘Corporate Finance. Treasury services’ shall include fees and commissions for corporate finance services related to capital market advisory for corporate clients;
(g) ‘Corporate Finance. Other fee and commission income in relation to corporate finance activities’ shall include all other corporate finance related fees and commissions;
(h) ‘Fee based advice’ shall include fees and commissions charged for advisory services to clients that are not directly linked to asset management, such as private banking related fees. M&A advisory fees shall not be included here, but under ‘Corporate Finance. M&A advisory’;
(i) ‘Clearing and settlement’ shall include fees and commission income (expenses) generated by (charged to) the institution where that institution participates in counterparty, clearing and settlement facilities;
(j) ‘Asset management’, ‘Custody’, ‘Central administrative services for collective investment undertakings’ and ‘Fiduciary transactions’ shall include fees and commission income (expenses) generated by (charged to) the institution that provides those services;
(k) ‘Payment services’ shall include fees and commission income (expenses) generated by (charged to) the institution that provides (receives) payment services as referred to in Annex I to Directive (EU) 2015/2366 of the European Parliament and of the Council. Information on the fee and commission income shall be reported separately for current accounts, credit cards, debit cards and other card payments, transfers and other payment orders as well as other fee and commission income in relation to payment services. ‘Other fee and commissions income in relation to payment services’ shall include charges for the use of the institution’s ATM network by cards not issued by the institution. Information on fee and commission expenses on credit, debit and other cards shall be reported separately;
(l) ‘Customer resources distributed but not managed (by type of product)’ shall comprise fee and commission income for distribution of products issued by entities outside the prudential group to its current customers. This information shall be reported by type of product;
(m) Under fee and commission expenses, ‘Externally provided distribution of products’ shall comprise the expenses for distribution of the institution’s products and services via an external agent network/distribution arrangement with external providers such as mortgage brokers, online loan platforms or Fintech frontends;
(n) ‘Structured finance’ shall include fees and commissions received for the involvement in the origination or issuance of financial instruments other than securities originated or issued by the institution;
(o) Fees from ‘Loan servicing activities’ shall include, on the income side, the fee and commission income generated by the institution providing loan servicing services and on the expense side, the fee and commission expense charged to the institution by loan service providers;
(p) ‘Loan commitments given’ and ‘Financial guarantees given’ shall include the amount, recognized as income during the period, of the amortization of the fees and commission for those activities initially recognised as ‘other liabilities’;
(q) ‘Loan commitments received’ and ‘Financial guarantees received’ shall include the fee and commission recognised as expense by the institution during the period as a consequence of the charge made to the counterparty that has given the loan commitment or the financial guarantee that is initially recognised as ‘other assets’;
(r) Under ‘loans granted’, fees and commissions shall be reported which are charged in the process of granting loans, but are not part of the effective interest rate calculation;
(s) ‘Foreign exchange’ includes fee and commission income (expenses) for foreign exchange services (including exchange of foreign banknotes or coins, fees on international currency cheques, bid-ask-spread) and fee income from/expenses on international transactions. Where the income (expenses) attributable to foreign exchange transactions can be separated from the other credit/debit card related fee income, this item shall also include foreign-exchange related fees and commissions generated via credit or debit cards;
(t) ‘Commodities’ include fee and commission income related to the commodity business, except for income related to commodity trading which shall be reported as other operating income;
(u) ‘Other fee and commission income (expenses)’ shall include the fee and commission income (expenses) generated by (charged to) the institution that cannot be allocated to any of the other listed items.
Annex V Part 2 §285 F 22.01 r0245, r0250, r0255
Business related to asset management, custody functions, and other services provided by the institution shall be reported using the following definitions:
(a) ‘Asset management’ shall refer to assets belonging directly to the customers, for which the institution is providing management. ‘Asset management’ shall be reported by type of customer: collective investment undertakings, pension funds, customer portfolios managed on a discretionary basis, and other investment vehicles;
(b) ‘Custody assets’ shall refer to the services of safekeeping and administration of financial instruments for the account of clients provided by the institution and services related to custodianship such as cash and collateral management. ‘Custody assets’ shall be reported by type of customers for which the institution is holding the assets distinguishing between collective investment undertakings and others. The item ‘of which: entrusted to other entities’ shall refer to the amount of assets included in custody assets for which the institution has given the effective custody to other entities;
(c) ‘Central administrative services for collective investment’ shall refer to the administrative services provided by the institution to collective investment undertakings. It shall include, among others, the services of transfer agent, of compiling accounting documents, of preparing the prospectus, financial reports and all other documents intended for investors, of carrying out the correspondence by distributing financial reports and all other documents intended for investors, of carrying out issues and redemptions and keeping the register of investors, as well as of calculating the net asset value;
(d) ‘Fiduciary transactions’ shall refer to the activities where the institution acts in its own name but for the account and at the risk of its customers. Frequently, in fiduciary transactions, the institution provides services, such as custody, asset management services, to a structured entity or managing portfolios on a discretionary basis. All fiduciary transactions shall be reported exclusively in this item irrespective of whether the institution provides other services;
(e) ‘Payment services’ shall refer to the payment services listed in Annex I of Directive (EU) 2015/2366;
(f) ‘Customer resources distributed but not managed’ shall refer to products issued by entities outside the prudential group that the institution has distributed to its current customers. This item shall be reported by type of product;
(g) ‘Amount of the assets involved in the services provided’ shall include the amount of assets in relation to which the institution is acting, using the fair value. Other measurement bases including nominal value may be used where the fair value is not available. Where the institution provides services to entities such as collective investment undertakings or pension funds, the assets concerned may be shown at the value at which those entities report the assets in their own balance sheet. Reported amounts shall include accrued interest, where applicable.