Newsletter - June 2018
June 2018

Extensive Updates to Bank, Building Society Interest (BBSI) Announced


In May 2018, HMRC formally announced an ambitious schedule of changes that will be introduced over the coming years. This will bring BBSI reporting in-line with the Automatic Exchange of Information (AEOI) and move towards the ultimate aim of real-time tax reporting. These widespread changes show that HMRC has ambitious plans to revolutionise the way it operates in order to introduce more sophisticated and efficient processes, which will improve the information it has available to operate and reduce the period it has to wait between the close of a tax period and the moment it is able to collect outstanding revenues.


BBSI

The full schedule of changes has not been completely finalised, but many details have been announced. Banks and vendors need to factor these changes into their future release plans and must be vigilant of further updates as they are announced. Fairmort has already included those updates that have been announced into the WILF Reporting (WILFr) development roadmap and frequently monitors HMRC and the Regulator for legislation changes. Fairmort will be liaising with all users of the WILFr BBSI module to arrange delivery of updates as deadlines approach.

The schedule of changes announced so far is summarised here:

  • BBSI 2017-2018: Return Notes
    • Changes to reportable Countries to only report GB
      • As the other countries have joined CRS they are no longer needed in the BBSI return
  • BBSI 2018-2019: Return Notes
    • Full Participant Reporting (2018 to 2019 onwards)
      • Currently HMRC only requires the first 2 reportable account-holders for each account reported, but starting from the 2018 to 2019 return all UK-resident account-holders must be reported
    • Small format and field changes over the next 2 years (2018 to 2019 and 2019 to 2020)
      • HMRC will engage with providers to finalise the return format for the returns going forward from 2020
    • End of EUSD/SIR reporting
      • The last EU Savings Directive of Savings Income Reporting return was for the 2016 April 2016 tax year
      • HMRC is now looking to ‘slim down’ the BBSI/OI specifications and spreadsheets by abandoning the EUSD sections. The proposed date for implementation is after the 2019-2020 Tax year return
    • Deeply Discounted Securities reporting still not required
      • HMRC has the power to ask for this information but at the current time it has chosen not to include this in the return
    • National Insurance Numbers
      • HMRC still does not require anyone to report new NINo information on accounts opened from 6th April
    • The actual data required and the structure of the BBSI return is unchanged
  • BBSI 2019-2020: Return Notes
    • Notes not published on HMRC website yet
  • Planned Future changes (2021 to 2022 Tax year onwards)
    • In November 2017 HMRC sent out proposed changes for the BBSI return which HMRC is currently reviewing the feedback from FIs and is revising the proposal that will be implemented for the BBSI return
    • These changes to the BBSI return will not take impact returns made before tax year 2021/2022
    • The full scope of the proposed BBSI changes will be developed to move to a real time submission of data that will include a real time handling/processing of the data received
    • HMRC will publish the 2021/2022 changes as soon as they are finalised, giving the sector 2 years to prepare for the changes and allowing FIs to make the changes in a single delivery

Full details can be found on the


Fairmort Systems Help a Complex Migration in the Philippines


A large Universal Bank in the Philippines has successfully completed the majority of a complex, multi-phase migration using both Fairmort's WILF Data Migration (WILFm) and WILF Reporting (WILFr) products. The migration was managed and executed by one of Fairmort's partners with remote support from our London based team.


Philippines Migration

Phase 1 succeeded in migrating a separate business entity from a 1997 version of Systematics, plus ancillary systems (including OCIFS customer and LNDSys corporate lending systems) to the target Systematics 212 (SI-212). The phase 1 migration was used as the opportunity to rationalise and reorganise the branches, products and accounts. Phase 1 also resulted in a historical archive, whereby all data was loaded into WILFr, where it was normalised. Only the data required to continue the business was migrated over to Systematics, leaving the residual data behind in WILFr as an archive solution. Phase 1 was completed in August 2017.

Phase 2 was completed five months later with migrated data from the primary incumbent Flexcube system (Oracle DB), plus several ancillary systems, to Systematics (VSAM file structures). As with Phase 1, products and accounts were rationalised and reorganised to fit the bank’s new structures. In addition, a number of branches were merged during the process.

The Migration Team Managing Consultant told us “Over 20,000 elements were migrated, with over 1m customers and to date, not one data migration error has been reported. Not only was the migration run clean, but all WILFm teams cut significant times off their previous best runs as well.”

The project posed many significant challenges. Firstly, the enormous volumes, involving many millions of customers and accounts, plus billions of transactions, where Fairmort’s expertise in database and data management was employed to optimise processing with WILFm connecting directly to the Flexcube database (WILFr connected independently for the purposes of reconciliation and to create the archive) to maximise load speeds.

Another huge challenge was that with multiple source systems there have been many different database types to manage, which has required many data type conversions and data structure translations.

The final major challenge has been that of scheduling the migration event around peak processing periods. Local customs mean that employees are paid twice a month, which has limited the number of windows available to just two 2-day weekends each month.

Despite the many challenges, Fairmort is proud that its WILFm and WILFr products have been used to successfully deliver the majority of this large and complex migration project and wishes the migration team the best of luck for Phase 3 which will involve migrating five overseas branches in three continents by the end of June 2018.


Regulatory Updates

To ensure our software is compliant with the latest regulations we proactively research regulatory changes monthly. These changes may have an impact on your business.

  • COREP
    Taxonomy version 2.8.0.0 has been released and takes effect on 1 January 2019. Updates to the COREP reports are scheduled for release to those clients using WILF Reporting (WILFr) RegForm reports to submit their COREP returns, in December 2018.

Regulatory Updates

  • GDPR
    GDPR came into effect on 25 May, as we are all aware following the flood of email communiques made by companies across the EU, which explained their data usage and privacy policies. The WILFr GDPR module provides tools for managing the documentation of your data in one place, which can be particularly problematic if you hold personal data in multiple systems, performing data security audits, responding to Requests for Information and the Right To Be Forgotten. If you would like to find out how our WILFr GDPR module can help your business, contact Clive Bowles –

    The ICO continues to update its guidelines on a monthly basis, particularly in the run-up and over the launch of the new legislation


  • BBSI
    As you will have seen mentioned in our main article, HMRC has now formally announced major changes to the BBSI return, which will be rolled out over the next few years.

BIS/PRA Activities

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Date Topic Ref Other Ref Report Comment Link to webpage
14 May 2018 BIS Capital treatment for simple, transparent and comparable short-term securitisations BCBS D422 New standard. Relates to firms who are involved in securisation
03 May 2018 PRA MREL reporting taxonomy - public working draft issued MREL CP 1/18 MREL New taxonomy for MREL reporting
30 April 2018 PRA Groups policy and double leverage PS 9/18 CP 19/17 ICAA/ILLA Effective 01/01/19 impacts groups
30 April 2018 PRA Pillar 2: Update to reporting requirements PS 8/18 CP 25/17 PRA111 Effective 01/10/2018 (PRA111 total assets >/=£5bn)
30 April 2018 PRA Model risk management principles for stress testing PS 7/18
SS 3/18
CP 26/17 Effective 1/06/2018 relates to SREP & ICAAP Report effectiveness in ICAAP from 01/01/2019

Releases and New Features

We are pleased to announce that WILF Reporting (WILFr) v2.0.3 is now available for general release. This new release contains fixes and the following new features:

  • Regulatory Report Drilldowns
    Automated data population of regulatory reporting using WILFr RegForm reports has been enhanced with drilldown options, allowing users to drilldown on the underlying detail of results in the report cells.
Charities
  • Conditional Formatting
    WILFr’s revolutionary new Logical Object Reporting capability, which we proudly announced in our December 2018 Newsletter, has been enhanced with improved formatting capabilities, including Conditional Formatting, which provides the ability to configure reports to highlight notable data within selections using established styling techniques, including colour.

  • Out-of-the-Box Reports
    Our Out-of-the-Box Reports Catalogue has been strengthened by the enhancements to the Interest Rate Risk in the Banking Book report, which we announced in our February 2018 Newsletter, plus introduction of the Deposits Dashboard, Customer Analysis, Postal Account Application Monitoring and Customer Services Dashboard. Additional reports will become available over the coming months.

  • GDPR Module v1.1
    The GDPR module has seen enhancements to the Data Classification screen, with the introduction of Data Retention Period and Legal Basis fields. These new data documentation attributes have also been filtered into the Data Access Request report.

  • AEOI v1.1.3
    The latest patch was released prior to the May 2018 submission date to provide changes to reportable jurisdictions after a late change made by HMRC removed 15 previously reportable countries. Also some small improvements to functionality and performance have been added.

  • Automated MLAR Reporting
    Automatic data population of the Mortgage Lending and Administration Reports (MLAR) has been enabled within our regulatory reporting suite using WILFr’s new Logical Object Reporting capability.