FIA EPTA is broadly supportive of the laid-out draft guidelines on the resubmission of historical data and welcome the clarity it provides. We are however concerned that the numerical materiality thresholds (tolerance limits) outlined in paragraph 18 would result in a large volume of historical data resubmission for the vast majority of entities covered by these guidelines.
The indicated tolerance levels would effectively result in restatement of historical data for calculation inaccuracies as low as EUR 1,000. We would not consider this a proportionate approach in particular against the backdrop of the generally accepted levels of accuracy when preparing financial information. While the level of accuracy applied when preparing the financial information is materially different from the resubmission threshold, a false sense of accuracy may emerge. Despite an increase of resubmissions for discovered inaccuracies, many other inaccuracies below the internal accuracy applied and the external reporting threshold will remain unnoticed and therefore unreported.
A significant increase in resubmissions could also lead to additional burdens being placed on the NCAs in processing the updates and engaging further with the firms for errors that are immaterial.
- Prudential Regulation