On 17 October 2012, the Governing Council of the ECB approved a Regulation (Regulation (EU) 1011/2012) establishing the reference framework for ensuring the collection of basic data needed for producing detailed statistics on holdings of securities (Securities Holding Statistics or SHS).
The compilation of such statistics aims to fill in the gaps in available information noticed during the financial crisis of 2007-2008, not only by the monetary policy authorities but also by those in charge of prudential supervision of the banking and finance sector and financial markets. The shortcomings mainly concerned information on risk exposures among financial sector stakeholders, and in particular large multinational groups, as well as their cross-border liabilities, mainly in the form of securities.
The information will be collected across all economic sectors and in the form of data for each individual security, one by one. The data will be gathered either directly for some financial sub-sectors, or indirectly for the remaining sectors. The information gathered will concern exclusively the positions held in securities.
The direct method consists of gathering information from entities in the sub-sectors concerned on their own assets they hold in the form of securities, while the indirect way involves requesting custodians to provide the same information for deposits made with them. In addition, the Regulation also lays down arrangements for collecting data on securities holdings by the big banking groups. The practical arrangements of these different collection procedures are specified in the aforementioned Regulation.
When the new system was being devised and the legislation drafted, it was stressed that it was essential to limit any increase in the reporting burden on declarants by making full use of data collection systems that are already in place.
Since the data collection is governed by an ECB Regulation, its implementing provisions apply directly to the economic stakeholders concerned (monetary financial institutions, stockbroking firms, investment funds, etc.) and give them the obligation to supply the required information.
The ECB Regulation stipulates that the data must be collected in accordance with instructions given by the national central banks. The National Bank of Belgium therefore adopted the necessary instructions for arranging the data collection in Belgium on 22 May 2013 (the full text of these instructions can be found under the Legislation tab).
Since a large part of the information that Regulation (EU) 1011/2012 requires to be gathered has already been covered by surveys carried out under the Law of 28 February 2002 regulating the compilation of the balance of payments and the international investment position, declarants already meet the requirements stemming from the aforementioned Regulation (EU) 1011/2012 by responding to these surveys and, if need be, by supplying any additional information described in the Bank’s instructions.
The first data-collecting exercise among reporting parties, in the new format, will refer to the situation at the end of December 2013 and will be held during the course of the first quarter of 2014.