Consultatie “Good practices Handreiking prudentiële rapportages”

DNB initiated a consultation on „Good practices Guidance on prudential reporting for investment firms and investment fund managers.“
The guidance aims to provide investment firms and managers of investment institutions and UCITS with an overview of best practices for prudential reporting. Institutions are legally obligated to report to DNB, and the quality of the data received in these reports is crucial for DNB’s supervisory role. Prudential reports often contain significant errors, leading to time-consuming re-reports, and negative trends in financial solidity may go unnoticed. DNB urges institutions to take additional measures, where necessary, to ensure the quality of their prudential reports.
The consultation includes the following three topics:
1. Good practices related to overall governance and infrastructure
The guidance advises institutions to integrate risk management for regulatory prudential data quality, ensure board oversight for data aggregation, and document processes. It emphasizes awareness of limitations and routine consideration of data processes in various initiatives. The guidance also stresses the importance of incorporating data processes into business continuity planning, defining roles for data ownership, utilizing a three lines of defence model, assigning responsibility to a board member, and providing training opportunities for compliance.
2. Good practices related to the processes for collecting legally required prudential data
The institution is advised to accurately aggregate regulatory prudential data with robust control measures, effective risk mitigation for manual processes, and reconciliation with data sources. Access for responsible staff is crucial, and documentation of all processes, periodic monitoring, and addressing data quality deficiencies are emphasized. The institution should ensure completeness, timeliness, and adaptability of its processes for regulatory prudential data, especially in stress or crisis situations. Consistency in defining concepts across the organization and maintaining an appropriate balance between automated and manual systems is also recommended.
3. Good practices regarding the accuracy, clarity, usability, frequency, and distribution of prudential reports
The institution should ensure correct regulatory prudential data reports through measures like reconciliation processes and automated editing. Accurate reporting is crucial for confident decision-making by the board and management. Management needs to establish correctness requirements and apply a four-eyes principle. The institution should use consistent materiality criteria, address diverse information needs, and set reporting requirements. The board is responsible for compliance monitoring, especially in stress situations. The institution should have procedures for timely report distribution while ensuring confidentiality. During stress, critical data must be quickly available to the prudential supervisor for effective risk response.
Stakeholders can provide feedback until 13 December 2023, by emailing consultatie@dnb.nl.