Upcoming Changes to the RMBS Reporting Guidance
The RBA will publish an update to the RMBS reporting guidance in early 2018 to bring the definition of loan-level fields into line with those in the Economic and Financial Statistics (EFS) collection, following the publication of the EFS reporting requirements in August 2017. This is to ensure consistency in the data reported under these two reporting regimes and streamline reporting requirements for financial institutions.
The changes are expected to be fairly minor and concentrated in a small number of fields, with two possible exceptions:
- Property purpose. The RMBS reporting guidance currently defines property purpose in terms of the usage of the property posted as the main security for the loan (i.e. investment, owner-occupied or other). However, the EFS Collection requires property purpose to be reported according to the usage of the funds that have been borrowed. For example, a loan that is used to purchase or renovate a property would be classified as an owner-occupier loan if the property to be purchased or renovated meets the definition of owner-occupied (and would be classified as an investor loan otherwise). If funds are borrowed for purposes other than housing (e.g. travel, business), the purpose would be classified as ‘other’ even if the loan is secured against a property. In addition, the definition of owner-occupied in EFS has been clarified to strictly relate to the borrower's principal place of residence, which may be narrower than the definition currently being used for reporting purposes by financial institutions.
- First home buyer flag. The EFS collection clarifies that institutions must not rely solely on first home owner grants to identify first home buyers (i.e. they must also capture investor first home buyers). The RMBS reporting guidance currently allows for information providers (IPs) to rely on first home owner grant data. This allowance will be removed.
Information providers (IPs) will be expected to adhere to the new definitions for all loans originated from March 2019 onwards, when ADIs and registered financial institutions will commence reporting to APRA under the updated EFS requirements. However, institutions are strongly encouraged to report all loans according to these new definitions where feasible and may transition to the new definitions prior to March 2019. Submissions made prior to the change will not need to be revised.
For further information on the EFS reporting requirements see the ‘Definitions standard and guidance’ published on APRA's website.
Please contact the Securitisation Support Centre as email@example.com or 1800 919 211 if you have any concerns with the proposed changes or to suggest fields where further clarification may be useful.