REPORTING NAV RETURNS TO THE CENTRAL BANK

Transcription

1 REPORTING NAV RETURNS TO THE CENTRAL BANK Explanatory information on how to report NAV returns to the Central Bank with the Online Reporting system. Reporting NAV Returns to the Central Bank Page 1 of 13

2 TABLE OF CONTENTS Contents 1. MONTHLY NAV RETURN WHAT IS TO BE REPORTED? WHEN IS REPORTING TO OCCUR? HOW IS REPORTING TO OCCUR? LOADING A FILE FILE AND DATA VALIDATION File name validation Schema validation Arithmetic Validation Reasonableness validation CONSISTENCY WITH MMIF DATA PROCEDURES FOR SPECIAL CIRCUMSTANCES PROCEDURES FOR REPORTING ON LAG BASIS PROCEDURE FOR LIQUIDATING FUNDS PROCEDURE FOR TRANSFER OF A FUND FROM ADMINISTRATOR TO ADMINISTRATOR VALIDATION RESPONSE TEMPLATE DESCRIPTION OF FIELDS Reporting NAV Returns to the Central Bank Page 2 of 13

3 1. Monthly NAV return. 1.1 What is to be reported? All Irish authorised collective investment schemes ( CIU s ) must file a monthly NAV return with the Central Bank of Ireland. The full reporting requirement for Monthly NAV data consists of 14 fields for each fund. A fund must report from the month of its authorisation until such time as it has received a notice of revocation from the Central Bank. This means that funds which have liquidated but not yet been revoked are still required to report. Finalised NAV s and revisions to NAV s may also be uploaded in this fashion, but they should have the appropriate identifier completed in field 3 NAV Type. 1.2 When is reporting to occur? All funds must report for a given month by T+10 business days from the end of a reference period. The end of a reference period is the last business day of a given month, e.g., 31 March. If a month ends on a Saturday or Sunday it would be the last working day of the month. Thus completed reports are expected to be submitted to the Central Bank by 10 working days after the end of a reference period. A calendar of reporting dates will be maintained on the Statistics page of the Central Bank website. The homepage of the Online Reporting ( ONR ) system will display a message advising users of the requirement to complete the monthly NAV return and additionally the NAV validation response template (if necessary). 1.3 How is reporting to occur? From January 2013, all funds must be reported via the Central Banks online reporting platform. Each fund administrator or entity which currently submits monthly NAV returns will be classified as a Reporting Agent. Each reporting agent will be required to appoint a person to act as a firm administrator. Each administrator will be issued with a password and logon name in order to access ONR. Only one logon and password will be given to each reporting agent. The administrator will be able to designate various logon permissions and passwords to other personnel within their firm, and will be responsible for renewing forgotten passwords. Reporting NAV Returns to the Central Bank Page 3 of 13

4 Each reporting agent can logon and see a list of funds to which they have been officially designated as administrator. They will then be required to make a return for each fund. There are two methods which a reporting agent can use to complete a return 1. Manual entry of data 2. Bulk uploading of data using a.xml file Procedures for both of these mechanisms are dealt with in the document Draft procedures for NAV online reporting. 1.4 Loading a file Files can be uploaded from the relevant Return Type data page on the Online Reporting system. The user will be asked to browse to the file for upload on their local system. Once the file for upload is selected, clicking on the Load File button will upload the file. Files that are uploaded will be added to a queue and processed as soon as possible, but the length of time this takes will depend on the system s activity and the file size. Once a file has been processed, the system will send an notification to the address specified in the user s profile, informing them that the file has been processed and outlining any validation queries which have arisen. If the file does not comply with the XML schema or file naming conventions it will be rejected and the user will be notified. In addition if a particular fund does not conform to arithmetic validation, the particular fund will be rejected and the user will be notified of the rejection and the reason for rejection. Please see below section on validation for more details. At any time the user will be able to see what funds have been uploaded for a specified reporting period and what funds remain outstanding. In addition to automatic validation checks that cause a fund to be rejected, there will be additional validation checks that require an explanation to be submitted. Where a fund requires a validation explanation, the user will be ed with the full list of items requiring explanation. An additional excel file is then required to be uploaded, containing the responses to the validation queries. Please see section 3, Validation response template for further details. Reporting NAV Returns to the Central Bank Page 4 of 13

5 1.5 File and Data Validation Validation is applied at a number of different points in a file upload File name validation XML files for NAV s must adhere to the following naming convention: CCCCCC_YYYYMMDD_NAV.xml The CCCCCC represents the code of the reporting institution used to submit returns for the NAV. This will be allocated to each reporting institution before they use the system for the first time. YYYYMMDD - represents the reporting period in the format YYYY (year),mm (Month), and DD(day). NAV.xml represents the file type and extension (.xml) Sample file name: C12345_ _NAV.xml Files that do not follow the correct naming convention will be immediately rejected by the system. No further processing will take place Schema validation The XML file must be consistent with the relevant XML schema defined by the Central Bank. Reporting firms should ensure that files have been checked against this schema before loading to the ONR. The schema sets out the structural and data type rules for each fund in the return. All columns have a pre-defined data type, e.g., Fund code should begin with a C and not exceed 8 characters. If a field contains a data that is not in accordance with the predefined data definitions, the file will fail the schema validation. A copy of the reporting version of the NAV return accompanies this document which includes the row and column numbers to use in the XML file. (Header rows in blue are ignored for the purposes of row numbers in the XML file). Reporting NAV Returns to the Central Bank Page 5 of 13

6 If an XML file fails the schema validation, it will be rejected. Details of the errors can be seen on the File Load History page of the Online Reporting system Arithmetic Validation The Central Bank has defined a set of validation rules for each fund return, which ensures all data submitted are correct and of high quality. These rules will be applied when the data is being loaded. There are 2 arithmetic validation checks: Ensure that Net proceeds equals Issue of shares less redemption of shares Ensure that NAV per share equals total NAV divided by number of shares. If any fund fails either of these arithmetic checks then it will be rejected from the upload and sent detailing the reason for rejection Reasonableness validation In addition to the arithmetic validation, a number of reasonableness validation checks will be applied. Where a fund breaks a reasonableness validation tolerance, it will be required to upload the validation response template. Please see Section 3. This template is available from the Central Bank website. Each validation breach will require a specific explanation. The reasonableness validation queries are as follows: All funds must be reported in the base currency of the fund. Accordingly any change in currency between one month and the next will require an explanation. For any increase of greater than 20% month on month in the NAV value of a fund, excluding net proceeds, an explanation providing the reason for the large movement is required. The formula used to calculate this query is NAV in current month- NAV previous month- Net proceeds of current month > 20% of NAV of previous month All funds must report their fund types as described on the MMIF guidelines. These fund types should be consistent with what the fund reports for the MMIF, and should be consistent with the fund s prospectus. Where there is a change of fund type the reason for the change requires an explanation. GAV: This validation query examines change in difference between the NAV and GAV of a fund. It is calculated using the following formula: (GAV of current month NAV of current month) (GAV of previous month - NAV of previous month) > Reporting NAV Returns to the Central Bank Page 6 of 13

7 20% of GAV of current month. If the difference is greater than 20% of the current month s GAV this would require an explanation If any of these rules are broken, the particular fund in question will be accepted by the upload system and an sent to the reporting agent. The reporting agent must then complete the template and load it to the NAV ONR system. The report for the fund will not be considered to be complete until the validation response template is received. Please note that in instances whereby a return has variance rule breaks set out on the ONR and the return is highlighted in pink, that this return will subsequently appear as green in the event that changes are made to the original return or an amended return is submitted. 1.6 Consistency with MMIF data Monthly NAV data and quarterly MMIF data are used by the Central Bank to satisfy the Banks requirements under EU Regulation No. 958/2007 of the European Central Bank (ECB) Accordingly the data reported for each fund must be consistent between both returns. There are a number of key areas where data must match in both returns. Net proceeds on the NAV return must match the transactions in L-Equity on the MMIF. The validation process for this is conducted in the MMIF return. (Note there is a variance of 5% allowable in this regard). The Units/Shares in issue in the MMIF return must match the NAV on the monthly return The NAV on the MMIF return must match the NAV on the monthly return The fund type on the MMIF return must match the fund type on the NAV return The currency must match on both the MMIF and NAV return and must be the base currency of the fund. Reporting NAV Returns to the Central Bank Page 7 of 13

8 2. Procedures for special circumstances. 2.1 Procedures for reporting on best estimate basis Due to the timeline for reporting, it is acknowledged that in a very limited number of cases, funds may have to report estimated data until finalised data becomes available. Where estimated data is reported it must be updated as soon as finalised data becomes available. The fund in question must seek and be provided with permission to adopt this approach from the Statistics Department of the Central Bank. Submissions in this regard should be made to sbys@centralbank.ie. 2.2 Procedure for liquidating funds Where a fund has liquidated it should record its NAV as zero. This applies even if a small amount of cash is retained in the fund to meet wind down fees. 2.3 Procedure for transfer of a fund from administrator to administrator Where a fund transfers services from one administrator to another: 1. Such a change requires prior authorisation from the Central Bank. 2. Once authorisation is forthcoming from the Central Bank, the fund in question will change association on the Central Bank s database such that it appears for that reporting month on the new administrators list of expected NAV returns. NB., it is extremely important that the transfer of services is in line with the dates provided to the Central Bank, otherwise the administrator may not be able to submit a return for the fund in question and the fund will be in breach of its legal requirements. It is the responsibility of the fund to ensure that the transfer of services occurs in time. 3. The new administrator will be expected to submit a return for the entirety of the month in which it begins providing administration services to the fund. In this regard. The previous administrator must provide the new administrator with all relevant data. Reporting NAV Returns to the Central Bank Page 8 of 13

9 3. Validation response template Where validation queries arise, the reporting agent is required to complete the validation response template. The template is available from the central bank website at the following link : The template has a worksheet for each rule type described in section above. Each validation query requires an individual explanation on the correct page. The file should then be uploaded using the NAV upload facility on ONR. 3.1 Validation response template Submission Date In the event that a validation response template is required to be completed, the reporting agent will have two business days (T+12 business days) to submit this template, ensuring that it is signed off by a business administrator within the firm. The homepage of the ONR system will display a notification message in this regard. 3.2 Validation response template sign off Given that the validation responses are describing reasons for large or unusual movements, this item should be reviewed and signed off by a business unit manager. Therefore, this manager should be someone with oversight for the submission of the NAV Data. In access permissions on the ONR system, this equates to business administrator user permission, therefore it may be necessary to have a business administrator appointed who has the necessary knowledge and understanding of the NAV returns. Each business administrator should be able to set user permissions on the system. Reporting NAV Returns to the Central Bank Page 9 of 13

10 3.3 Consistency with MMIF return NAV returns - Please also note that monthly NAV returns should be in line with the MMIF returns. The requirement for these to be revised the following month if reported with a lag has been in place since the monthly returns moved to online reporting at the start of Where a previous NAV is used as the best available estimate, it should not re-record any issues, redemptions or net proceeds, but should report these as nil. For example, if February s data is inputted for February and as an estimate for March, please do not input share issuance and redemptions for March. Reporting NAV Returns to the Central Bank Page 10 of 13

11 Field No. 3. Description of fields Field Name Field Description XML Field No 1 Sub-Fund Entity Code (C Code) Code as issued by Central Bank 2 Currency 3 letter ISO code. Must be base currency of fund. 3 NAV type (Final, Estimate, Revision) Describes NAV information. Where estimates are submitted, they must be updated with final versions. Where final versions are revised this must be indicated. 4 Fund Type AS per MMIF return, this refers to the trading strategy of the fund (defined at end of MMIF reporting guidelines). The Fund type must be consistent between the MMIF and the NAV return. 5 Total Gross Asset Value 6 Total Net Asset value 7 No. of Shares in Issue 8 Net Asset Value per Gross Asset Value is the total assets presented in a company Balance Sheet comprising of current and non-current assets The total NAV of the fund, calculated as set out in the fund s prospectus, and averaged across all share classes. Any currency conversions should use the last date of the reference period, e.g., 31 March. Amalgamated number of shares in issue. Should include the total number of all shares in all share classes. Must equal the NAV of the fund divided by the total XML Field Name Data type 1 C Code C followed by 6/7 digits. 2 3 character ISO 3 One digit from: F, E, R Amount 6 Amount 7 Nominal amount 8 Amount Reporting NAV Returns to the Central Bank Page 11 of 13

12 share 9 Issue of Shares 10 Redemptions of shares number of shares (Field No.6/ Field No. 7). Any currency conversions should use the last business date of the reference period, e.g., 31 March. The base currency value of all shares issued during the corresponding reporting period. This should be calculated using monthly average exchange rates. The base currency amount of all shares redeemed during the corresponding reporting period. This is reported using monthly average rates. Should not contain a minus sign. 11 Net Proceeds Issue of shares minus redemption of shares, i.e., Field No.9 Field no. 10. This can contain a minus sign. 12 Net Increase/ Decrease from operations 13 Investment management fees 14 Other Expenses The Net increase/decrease from operations is the profit/loss made in the period from operations. See below for additional details. The fee paid to the investment manager or fund manager, excluding any performance/incentive fee paid by the fund, to manage the day to day operations of the fund. The fee is not based on any past or future performance of the fund. See below for additional details. 9 Amount 10 Amount 11 Amount 12 Amount 13 Number 14 Number Reporting NAV Returns to the Central Bank Page 12 of 13

13 Net increase/decrease from operations: The Net increase/decrease from operations is the profit/loss was made in the period from operations. It is not impacted by capital contributions into the fund or redemptions in capital from the fund; it is purely the income from operations. This would contain gains/losses accrued from the disposal of Investment assets, which would feed into the P/L through the realised/unrealised gain/losses at fair value. This would relate to any realised and unrealised gains/losses associated with disposal of assets or unrealised price movement of asset as well as other income that comes into the P/L, i.e. dividend income, interest income, other income, etc. it should be recorded for the one month reporting period and not for the year to date. Investment Management Fees: It is the fee paid to the investment manager or fund manager, excluding any performance/incentive fee paid by the fund, to manage the day to day operations of the fund. The fee should be recorded for the month reported and not for year to date. The fee is not based on any past or future performance of the fund. The Central Bank want the amounts charged or accrued in the P/L reported rather than amounts paid to the investment manager or fund manager. Investment management fees refer to Fees paid to the Fund Management Company for the provision of fund management services. Fees paid to the investment manager for investment management services In some instances a separate fee is paid for fund management and investment management services. These should be aggregated, where applicable. In other circumstances only one fee is paid. Where a fee is paid to the Fund Manager who pays a portion of that fee on to the Investment Manager, we only require the fee paid to the Fund Management Company to be disclosed. These are the fees that generally appear in the Annual Audited Accounts as investment management fees. Other Expenses: Expenses, excluding fees paid to the investment manager or fund manager, relating to the day-to-day management of the Fund. This figure should exclude any performance/incentive fee paid by the fund. It should be reported for the month in question and not on a year to date basis. Examples of such expense items would be: Bank Charges; Out of pocket expenses reimbursed to the administrator; Custodian fees; Administrator s fees; Legal Fees; Audit fees; Director s fees; Other expenses (all sorts of small fees in here). Reporting NAV Returns to the Central Bank Page 13 of 13