The Central Bank of Ireland has recently announced that it will extend quarterly reporting requirements to all Section 110 Special Purpose Vehicles (SPVs). All SPVs are now required to register with the Central Bank prior to submitting their first return by 20 November 2015.  

1. What is the background to the extension of reporting requirements for all Section 110 companies which are not financial vehicle corporations (“FVCs”)?

Under existing requirements, companies which are FVCs must register with the Central Bank and provide certain reports to the Central Bank on their business activities on a quarterly and annual basis. The Central Bank has decided to introduce similar reporting requirements for all Section 110 companies which are not FVCs. This is designed to close data gaps which the Central Bank believes may prevent it from performing its functions in relation to safeguarding financial stability effectively and to facilitate domestic and European statistical analysis. The Central Bank will be subject to a statutory obligation to ensure the confidentiality of data supplied pursuant to the new reporting regime.

2. Which companies fall within the scope of the new reporting requirements?

Any Irish incorporated company that registers as a Section 110 vehicle with the Revenue Commissioners which does not fall within the scope of the FVC reporting requirements is subject to the new reporting regime. 

The Central Bank has indicated that it is prepared to exempt an entity from the reporting requirements where it meets the following requirements:

  • it remains a non-trading entity;
  • it retains a negligible balance sheet position;
  • it has no planned trading activities.

If any of the above were to change, this would trigger the reporting requirements for the relevant entity. 

3. What is the deadline for registration with the Central Bank?

All non-FVC Section 110 companies which are incorporated in Ireland are required to register with the Central Bank before submitting returns. The first quarterly return is due by 20 November 2015.

4. What information must be provided to the Central Bank at the time of registration?

Information to be provided at the time of registration includes:

  • Registered name, number and address of company;
  • Company type (e.g. public limited company, designated activity company, limited company);
  • Details of transactions to be undertaken (e.g. aircraft leasing, loan origination);
  • Expected size (total assets in €);
  • Listing of debt securities issued;
  • Whether entity is bankruptcy remote;
  • Details of sponsor/promoter;
  • Whether the entity is consolidated into the financial statements of another entity;
  • Whether there is an interest in the entity disclosed in the financial statements of another entity;
  • Corporate services provider;
  • Reporting agent; and
  • Expected first reporting quarter.

5. When must quarterly reports be provided to the Central Bank?

The first quarterly return (in respect of Q3 2015) must be submitted by 20 November 2015.

The second quarterly return (in respect of Q4 2015) must be submitted by 12 February 2016.

For all further quarterly reports, the deadline for filing reports will be the 19th working day after the last working day of the relevant quarter.

6. What information must be provided to the Central Bank in quarterly reports?

Information to be included in quarterly reports includes:

  • Deposits and loan claims;
  • Debt securities held (ISIN);
  • Debt securities held (non-ISIN);
  • Securitised loans;
  • Derivatives;
  • Loans and deposits received;
  • Certain balance sheet items, outstanding amounts and transactions at end of quarter;
  • Debt securities issued (list by ISIN);
  • Total assets/liabilities; and
  • Annual profit and loss (to be reported in Q4 quarterly report).

Reports are to be completed in thousands of euro. Foreign currency assets and liabilities are to be converted at the exchange rates at the end of quarter reference date as a rule. Details of the country and sector classification (as defined by the Central Bank) of each counterparty must be provided. The template for quarterly reports and guidance notes for compilation of reports are set out on the Central Bank’s website.

7. Is there a reduced reporting regime for companies with total assets below a de minimis threshold?

No. Unlike the equivalent reporting regime for FVCs, the new reporting regime for Section 110 companies which are not FVCs does not, at present, include a reduced reporting regime for companies with total assets below a de minimis threshold. The Central Bank has indicated informally that the reason for not having a de minimis threshold at the outset is that the Central Bank currently has no data on this sector. In order to get a clearer picture of the size and activities of the sector, the Central Bank is requesting full reporting by every Section 110 vehicle which is not a FVC. The Central Bank will analyse this data and will then be in a position to consider applying a minimum threshold.

8. What are the potential consequences for companies which are not compliant?

The Central Bank has introduced the new reporting requirements pursuant to Section 18 of the Central Bank Act 1971 (as amended). Failure to comply with a request for information from the Central Bank pursuant to that provision is a criminal offence. This would include situations where no return is filed or the return that is filed is incorrect or incomplete or does not follow the prescribed format.

9. What are the required next steps?

Section 110 companies which are not FVCs should:

  • register with the Central Bank before the deadline for filing the first report;
  • appoint a reporting agent to assist with reporting (if required);
  • ensure that the first quarterly report is filed by 20 November 2015 and that quarterly and annual reports are filed within the above deadlines going forward.