AxiomSL, a provider of risk and regulatory reporting solutions, has developed a solution to address Net Stable Funding Ratio (NSFR) reporting requirements.
The NSFR rules will require banking institutions to maintain stable funding to cover all or a portion of their business activities, depending on the size of the bank, for a period of one year.
The rules were finalised last month with the deadline set for 1 July 2021. However, banks must prepare to implement the rule's complex new data collection, categorisation, capital calculation and reporting requirements now.
The AxiomSL NSFR solution will automatically gather necessary data and perform this calculation, streamlining workflows while facilitating the measure of compliance with the new rule.
Under the NSFR requirements, the largest, global systemically important banks (G-SIBs), or Tier I institutions and Tier II banks, must cover 100 percent of their required stable funding over the course of one year with available stable funding.
Meanwhile, smaller banks, falling into the Tier III-IV categories, will need to maintain either 85 percent or 70 percent of available stable funding to cover their required stable funding.
The data required to calculate this ratio is drawn from across the banking institution and includes a large portion of data attributes already reported in the Federal Reserve's FR2052a report.
This includes unencumbered assets, liabilities, funding activities and contingent liabilities, along with data and attributes required to measure available and required stable funding.
With its new NSFR solution, AxiomSL will automate the data collection, calculation and reporting process required to streamline NSFR compliance.
Building on its liquidity monitoring solutions for FR 2052a, the new technology will be delivered via AxiomSL's ControllerView transparent data integrity and control platform.
The solution will automatically populate and validate the reports required for all aspects of NSFR.
Ed Probst, general manager, North America product, AxiomSL, commented: "NSFR is a complicated requirement that has been talked about in the industry for years, but did not get finalised until October of this year and banks must now be fully compliant in just eight months.”
Probst added: "Fortunately, we have been developing this solution for the last several years in tandem with our liquidity reporting solutions (2052a) in anticipation of the rule. That advance groundwork has put us into position to launch a fully functional reporting solution that addresses the NSFR needs of banks of every size and ensure that they will be compliant by the deadline."
Last month, AxiomSL created a new solution to address the new EU requirements defined in the Investment Firms Regulation and Investment Firms Directive, followed by the UK requirements from the Financial Conduct Authority (FCA).
