Transcript Improved System for Monitoring Portfolio Capital Movements

Transition from ITRS to Direct
reporting
Skopje, October 3, 2013
Liliana Bancheva
Bulgarian National Bank
Balance of Payments and External Debt Division,
Statistics Directorate
Transition from ITRS to direct reporting
Introduction
BOPED Division within the Statistics directorate of the
BNB independently compiles:
Balance of payments (b.o.p.) statistics - since 1994
External debt statistics – since 1996
International investment position (i.i.p.) – since
1998
International reserves and foreign currency
liquidity data template (Data Template) – since 2003
Investment fund statistics – since 2007
Staff – 16 well qualified specialists: 14 experts in
statistics, 2 registrars
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Transition from ITRS to direct reporting
Why?
Due to the changing environment (legal and methodological)
Bulgarian bop statistical production system has evolved
from:
• An exchange control system before 1994, to
• A system mainly based in settlements (ITRS), as it was first
implemented in 1994 based on an aggregated reporting by
BoP code, to
• An open system based on the aggregation of a growing
number of different data sources (e.g. Direct reporting +
Administrative sources + Surveys + ITRS).
This “new” system has been running on a monthly basis
since 2010.
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Transition from ITRS to direct reporting
Why?
• The free capital movements in Bulgaria have to be
backed by an efficient system for monitoring capital flows,
among which the portfolio capital flows to and from the rest
of the world.
• Changes in the methodological requirements – form
BPM4, through BPM5 to BPM6
• Constantly increasing requirements for the quality,
coverage and timeliness of the statistical data
• Removal of the settlement-based national reporting
obligations on payment service providers for balance
of payments statistics – loss of information particularly
in other services
Led to stronger need to directly approach companies involved
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in transactions with non-residents.
Transition from ITRS to direct reporting
What?
Institutional sectors
Non financial corporations
BoP/IIP item
Financial
corporations
Central bank
General government
Households and NPISH
A. Current account
Goods
National Statistical Institute
Services
Transportation
Estimation methodology
Travel
Border survey
Other services
Direct reporting
Income
Copmensation of employees
Estimation methodology + ITRS
Investment income
Direct reporting
Current transfers
Direct reporting + ITRS
Direct reporting
Direct reporting + ITRS
B. Capital account
Direct reporting + ITRS
Direct reporting
Direct reporting + ITRS
C. Financial account
Foreign direct investment abroad
Foreign direct investment in Bulgaria
Direct reporting
ITRS
Direct reporting + Annual census survey of the NSI
ITRS + Admin. rec.
Portfolio investment, assets
Reporting through custodians
Direct reporting
Reporting through custodians
Portfolio investment, liabilities
Reporting through custodians
Direct reporting
Reporting through custodians
Other investment, assets
Direct reporting
Other investment, liabilities
Direct reporting
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Transition from ITRS to direct reporting
Key success factors
• Sound legal basis – requirements, penalties
• Define the reporting population - item tailored approach
(bop register, ITRS, conditional reporting)
• Explore internal and external users’ needs
• Flexible user-friendly IT system IT support
• Re-use of already available data
• Well-trained staff and good co-operation with the
respondents
• Learning from others
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Transition from ITRS to direct reporting
Setting up the legal requirements
• The BNB Law – Art. 42 “The Bulgarian National Bank
shall compile the balance of payments of this country. For
this purpose, all government and municipal authorities, as
well as legal entities and physical persons, shall provide
information to the BNB in accordance with a procedure
established by the BNB”.
• Foreign Exchange Law – Art. 7 – 10 – specify the
subjects that shall keep register for the purpose of the BOP
statistics and provide the information to the BNB, also gives
BNB the right to require from any legal entity and person
information, which may be relevant to the country’s
Balance of Payments and International Investment Position.
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Transition from ITRS to direct reporting
Setting up the legal requirements
• Penalties for not declaring and not reporting - Foreign
Exchange Law
 For natural persons - Anyone who is found to have
violated or permitted a violation under Art. 7, Art. 8 and
Art. 10, Para 2 shall be fined from 200 to 1 000 levs,
unless the violation constitutes a criminal offence.
 For a violation under Art. 7, Art. 8 and Art. 10, Para 1,
legal entities and sole proprietors shall be subject to
property sanctions in amounts from 2 000 to 10 000
levs (aprox. 5 000 euro).
• Procedures for declaring and reporting for the BOP
and IIP statistics - Regulation No 27 of the BNB
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Transition from ITRS to direct reporting
Defining reporting population
Item tailored approach
For other services
 Unstable reporting population based on various sources,
mainly ITRS, administrative records - stratified sampling
– strata are selected based upon the account entry
(debit/credit) and item
 Stable reporting population - all Banks and insurance –
census survey
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Transition from ITRS to direct reporting
Defining reporting population
Item tailored approach
For FDI abroad, company loans, issue/purchase of
securities abroad
 Direct Reporting based on Statistical Declaration any resident legal entity or sole proprietor who has
concluded a transaction under Article 7, paragraph 5 of the
Currency Law shall submit to the BNB a declaration within
15 business days after the conclusion of the transaction as
follows:
 on transactions related to extending or borrowing of loans –
exemption threshold of the lev equivalent of BGN 50,000
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Transition from ITRS to direct reporting
Defining reporting population
Item tailored approach
For portfolio investments
 Direct reporting to the BNB by:
- domestic issuers/end investors is applied for financial
and government sectors (S12 and S13), which are
perceived as main institutional investors and issuers
- resident issues abroad and
- residents holding securities in self-custody or with
foreign custodians
 Indirect reporting by custodians or other intermediaries is
applied towards non-financial sector, households and nonprofit institutions serving households (S11, S14 and S15).
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Transition from ITRS to direct reporting
Defining reporting population
For natural persons (loans and other assets and
liabilities) and companies trade credits and advances
Statistical Reporting without prior Declaration
 Resident legal entities and sole proprietors report on a
quarterly basis to the BNB in statistical forms
receivables/payables from/to non-residents on commercial
credits and transactions other than financial loans provided
the total amount of receivables/payables is equal to or
exceeding the lev equivalent of BGN 50,000;
 Resident natural persons report annually to the BNB in
statistical forms their receivables from or liabilities to nonresidents on financial credits, including on extended
financial credits by opening bank accounts in other
countries, by 31 March in the year following the reporting
year – exemption threshold of of BGN 50,000 (about EUR
25 000 mln.)
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Transition from ITRS to direct reporting
Identifying user needs
Main users of external statistics data of the BNB:
 National accounts – both Financial Accounts and Nonfinancial Accounts
 Researchers
 International organizations
 National specific needs
When designing the reporting forms and requirements all
users’ need have to be analyzed and taken aboard
regarding:
 Level of detail of the information
 Level of detail of breakdowns (geographical, instrument,
maturity, etc.)
 Periodicity
 Timeliness
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Transition from ITRS to direct reporting
Design and development of IT system
IT two step solution in the BNB:
As a first step - a simple model of the future Integrated
Statistical Information System called the “Prototype”
was developed and implemented by the Statistics
Directorate.
It allowed for:
- formal checks of reports
- processing of large amounts of data
- production of aggregated statistical reports
- better understanding of the processes that will facilitate
the requirements for the future ISIS
Transition from ITRS to direct reporting
Design and development of IT system
IT two step solutions:
The second step is the development and implementation of
the Integrated Statistical Information System.
In addition to the functionalities of the Prototype it will
allow for:
- Production of various structures of the aggregated data
depending on the user’s needs
- automate reporting
- provide access of internal and external users to
aggregate data
Transition from ITRS to direct reporting
Conclusions
• Our experience with the collection of external statistics data so far
confirms the importance of the effective and efficient use of
business registers.
 Results may be inaccurate for reasons like non-response and
inaccurate returns, but a crucial cause may also be noncoverage due to poor keeping of a register.
• This requires a flexible user-friendly IT system, well-trained staff
and good co-operation with the respondents and users.
• Since 1999 the BNB direct reporting system is in a constant
change and improvement, BUT “Life changes faster than any
Regulation”
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