# Commission Implementing Regulation (EU) 2018/1624 of 23 October 2018 laying down implementing technical standards with regard to procedures and standard forms and templates for the provision of information for the purposes of resolution plans for credit institutions and investment firms pursuant to Directive 2014/59/EU of the European Parliament and of the Council, and repealing Commission Implementing Regulation (EU) 2016/1066 (Text with EEA relevance), Division II.7.2: Z 07.01 — Criticality assessment of economic functions (FUNC 1): Instructions concerning specific positions

Extent: E+W+S+N.I.

Rows
Instructions
0010-0380
Economic functions
Economic functions as defined above
Columns
Instructions
0010
Description of economic function
Where the Economic function is of the type ‘Other’ (functions 1.5 – 1.7, 2.6 -2.8, 3.7 – 3.9, 4.5 – 4.7, 5.5 – 5.7), a description of that function shall be provided.
0020
Market share
Estimate of the market share of the institution or group for the economic function in the respective country. As a percentage of the total market in terms the monetary amount.
0030
Monetary Amount
The content of this column depends on the Economic function provided:
1.. Deposits
Carrying amount (including accrued interest) of deposits accepted
References: FINREP, Annexes III and IV, template F 08.01 and Annex V, Part 2, paragraph 97.
2.. Lending
Gross carrying amount of unimpaired and impaired loans and advances (including accrued interest). Lending stock is taken as a proxy for expected future lending.
References: FINREP, Annexes III and IV, template F 04.04.01 and Annex V Part 1, paragraph 34, point (b)
3.. Payments, Cash, Settlement, Clearing, Custody services
As a general rule, the average of daily transactions over the year shall be reported. If not available, an average over a shorter period (e.g. a few months) may be reported.
Specifically with regard to the different functions, the following measures shall be considered:
Payment services (3.1 to 3.2): Value of transactions sent.
(References: Article 4(5) of Directive 2015/2366/EC; ECB/2013/43)
Cash services (3.3): Value of ATM transactions, as defined in ECB/2013/43 Table 5a, as well as over-the-counter cash withdrawals, as defined in ECB/2014/15 Table 4.
Securities settlement services (3.4): Value of securities transfers processed on behalf of clients. This includes transactions settled with a securities settlement system or settled internally by the reporting institutions, and ‘free-of-payment’ transactions.
CCP clearing services (3.5): the positions (exposure) that the CCPs of which the institution is a member take on with the institution on behalf of its clients. Please report the average daily value of open positions related to client activity at CCPs. If not available, you may report averages over a shorter period (e.g. a few months).
Custody services (3.6): The amount of assets under custody, using fair value. Other measurement bases including nominal value may be used if fair value is not available. In those cases where the institution provides services to entities such as collective investment undertakings, pension funds, the assets concerned may be shown at the value at which these entities report the assets in their own balance sheet. Reported amounts shall include accrued interest, if appropriate.
(Reference: FINREP, Annex III and IV, template F 22.02, column 010)
4.. Capital Markets
Notional amount — Only report for derivatives (4.1-4.2): gross nominal amount of all deals concluded and not yet settled at the reference date.
References: FINREP Annex V, Part 2, paragraph 133for the definition; for the data FINREP Annex III; IV and V:
Derivatives total (4.1-4.2): Template F 10.00 column 030 row 290.
Derivatives OTC (4.1): Template F 10.00 column 030 rows 300 + 310 + 320.
Secondary market activities (4.3). Carrying amount assets — the carrying amount to be reported on the asset side of the balance sheet, including accrued interest [FINREP: Annex V Part 1, paragraph 27] for equity instruments and debt securities [FINREP: Annex V Part 1, paragraph 31], classified as ‘Held for Trading’ [FINREP: Annex V Part 1, paragraph 15, point (a) and paragraph 16, point (a)].
Reference: FINREP: Annex III Template F 04.01 column 010 rows 010 + 060 + 120.
Primary markets (4.4): Fee income — Fees and commissions received for involvement in the origination or issuance of securities not originated or issued by the institution.
Reference: FINREP: Annex III, IV Template F 22.01 column 010 rows 030 + 180.
5.. Wholesale funding
Use gross carrying amount as defined in FINREP.
References: FINREP: Annex V Part 1, paragraph 34, FINREP: Annex III, IV, Templates:
Borrowing (5.1): Template F 20.06 column 010 rows 100 + 110, all countries.
Derivatives (assets) (5.2): Template F20.04 column 010 row 010, all countries.
Lending (5.3): Template F 20.04, column 010 rows 170 + 180, all countries.
Derivatives (liabilities) (5.4): Template F 20.06, column 010, row 010, all countries.
0040
Numeric indicator
The content of this column depends on the Economic function provided.
1.. Deposits
Total number of clients which deposited the values reported in monetary amount. If one client uses more than one deposit product/account, the client shall be counted only once.
2.. Lending
Total number of clients. If a client is using multiple loan products/accounts, the client shall be counted only once.
3.. Payments, Cash, Settlement, Clearing, Custody services
As a general rule, the averages of daily transactions over the year shall be reported. If not available, averages over a shorter period (e.g. a few months) may be provided.
Specifically with regard to the different functions, the following measures shall be used:
Payment services (3.1-3.2): Number of transactions made.
References: Article 4(5) of EU Directive 2015/2366/EC; ECB/2013/43.
Cash services (3.3): Number of ATM transactions, as defined in ECB/2013/43 Table 5a, as well as ovethe-counter cash withdrawals, as defined in ECB/2014/15 Table 4.
Securities settlement services (3.4): Number of securities transfer transactions processed on behalf of clients. This includes transactions settled with a securities settlement system or settled internally by the reporting institution or group, and ‘free-of-payment’ transactions.
4.. Capital Markets
Number of counterparties OR transactions. For derivatives (4.1-4.2) and secondary market instruments (4.3), total number of counterparties. For primary markets (4.4), total number of underwritten transactions.
5.. Wholesale funding
Total number of counterparties. If one counterparty has more than one account and/or more than one transaction, the counterparty shall be counted only once.
0050
Impact on market
Estimated impact of a sudden discontinuation of the function on third parties, financial markets and the real economy, taking into account the size, market share in the country, external and internal interconnectedness, complexity, and cross-border activities of the institution.
This assessment shall be expressed qualitatively as ‘High (H)’, ‘Medium-High (MH)’, ‘Medium-Low (ML)’ or ‘Low (L)’.
‘H’ shall be selected if the discontinuation has a major impact on the national market; ‘MH’ if the impact is significant; ‘ML’ if the impact is material, but limited; and ‘L’ if the impact is low.
0060
Substitutability
Article 6(3) of Delegated Regulation (EU) 2016/778.
A function is considered substitutable where it can be replaced in an acceptable manner and within a reasonable timeframe thereby avoiding systemic problems for the real economy and the financial markets. The following shall be taken into account:
(a) the structure of the market for that function and the availability of substitute providers;
(b) the ability of other providers in terms of capacity, the requirements for performing the function, and potential barriers to entry or expansion;
(c) the incentive of other providers to take on these activities;
(d) the time required by users of the service to move to the new service provider and costs of that move, the time required for other competitors to take over the functions and whether that time is sufficient to prevent significant disruption depending on the type of service.
This assessment shall be expressed qualitatively as ‘High (H)’, ‘Medium-High (MH)’, ‘Medium-Low (ML)’ or ‘Low (L)’.
‘H’ shall be selected if a function can easily be provided by another bank under comparable conditions within a reasonable timeframe;
‘L’ if a function cannot be easily or rapidly substituted;
‘MH’ and ‘ML’ for intermediate cases taking into account different dimensions (e.g. market share, market concentration, time to substitution, as well as legal barriers to and operational requirements for entry or expansion)
0070
Critical Function
In this column it shall be reported whether, taking into account the quantitative data and criticality indicators in this template, the economic function is considered to be critical in the market for the relevant country.
Report ‘Yes’ or ‘No’

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Source: https://www.legislation.gov.uk/eur/2018/1624/annex/II/division/II/division/II.7/division/II.7.2 (the official version)
Page: https://openlegislation.uk/eu-regulation-2018-1624/annex-II/division-II/division-II.7/division-II.7.2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.