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It is vital that those undertaking COREP Reporting for your Firm understand the methodology and regulatory requirements that go into submitting accurate COREP returns. This is increasingly becoming the attention of regulatory focus as highlighted by the PRA’s and FCA’s Dear CEO Letters recently.
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Dear CEO: Accuracy of COREP Returns
15th October 2018
Both UK regulators (FCA & PRA) have issued ‘Dear CEO letters’ recently that focus upon the need for accuracy within the COREP regulatory reporting returns being submitted by firms.
In 2016, the PRA upped the ante on cross-
Since then, the regulatory focus on the accuracy of COREP returns has heightened with the FCA taking the same approach by issuing their own ‘Dear CEO letter’ just this February with COREP returns expected to undergo a review by the regulator this month.
FCA Dear CEO Letter COREP Returns
The FCA’s Dear CEO letter requested that CEOs of IFPRU investment firms and BIPRU firms review their firm’s regulatory reporting practices and was entitled ‘Quality of Prudential Regulatory Returns’.
The letter stated that the FCA has seen a significant number of returns being submitted with inaccurate and/or incomplete data. The FCA utilises the data from these regulatory returns to assess prudential risk and identify sectoral trends and thus it is extremely important the data within these reports is accurate and can be relied upon. The regulator therefore highlighted a number of areas of weakness within current COREP reporting that should be reviewed by firms.
COREP Reporting: Common Failings
Common Failings highlighted by the FCA’s Dear CEO Letter included:
As of the first of this month, October 2018, the FCA have informed they will be reviewing a sample of firms’ COREP returns, and should they find that firms are continuing to submit materially inaccurate, incomplete and/or poor quality data, they will then have to consider 'next steps' to improve the standard of COREP returns.
What might this mean? Well, after the PRA issued their Dear CEO letter to firms in 2016, there was a surge in thematic s166 reviews over the succeeding year, whose purpose was to investigate the COREP processes and procedures of individual businesses. And thus, it is anticipated that potential ‘Next Steps’ for the FCA will therefore be similar.
If your firm has received a Dear CEO letter and has yet to act, then you should do so quickly.
In essence, CEOs of IFPRU investment firms and BIPRU firms should have reviewed their firm’s regulatory reporting process from start to finish and in doing so have asked themselves these questions?
These reviews should incorporate detailed and substantive procedures that test and consider factors such as:
COREP Support & Assistance
The Corep Support Team at Compound Growth have extensive experience in assisting firms with reviewing their COREP reporting and have been ensuring that accurate client COREP reports have been submitted since implementation in 2014.
If you would like support in assessing your firm’s compliance with the rules, regulations and reporting requirements we would be only too happy to assist. SImply get in touch with our friendly and supportive COREP Support team.