BSL2 General Guidance

Summary

This is guidance from the Guernsey Financial Services Commission explaining how licensed banks should complete the BSL/2 prudential return, a Basel III-consistent suite of reporting modules covering credit risk, operational risk, market risk, balance sheet, capital and related prudential data.

• Scope of modules: Guernsey-incorporated subsidiary banks must complete Modules 1 or 2, plus Modules 3 to 9 and Module 11; Module 10 (interest rate risk in the banking book) is optional if an alternative methodology is agreed in writing with the Commission. Branches of banks incorporated elsewhere need only complete Modules 6, 8 and 9.
• Currency and valuation rules: BSL/2 must be completed in sterling only, with foreign currency balances translated at the London market middle-market spot rate (or an agreed parent bank rate); figures are reported to the nearest thousand pounds with specified rounding conventions and no decimal places.
• Front sheet and signatures: The Front Sheet must be completed and signed each quarter by the chief executive (or alternate) and chief financial officer (or alternate), per section 55(2) of the Banking Supervision (Bailiwick of Guernsey) Law, 2020; a hard copy need not be sent to the Commission but must be retained by the bank for possible review.
• Approaches to risk: Banks must use the Standardised Approach to Credit Risk, Standardised Approach to Operational Risk and Simple Approach to Credit Risk Mitigation unless the Commission has given written permission to use an alternative approach.
• Related return: The Monetary Aggregates return (MA/1) must be completed monthly, including in months where BSL/2 is also due.

The guidance also sets accounting conventions, such as completing the return on an accruals basis and rules for recognising guarantees, and stresses that the balance sheet module must balance before submission.

Key obligations

• Subsidiary banks must complete Modules 1 or 2 plus Modules 3 to 9 and Module 11 of form BSL/2 each quarter; branch banks need only complete Modules 6, 8 and 9
• Banks must report interest rate risk on the banking book using Module 10 or another methodology agreed in writing with the Commission
• BSL/2 must be completed and reported in sterling only, with foreign currency translated using specified spot rate conventions
• Figures must be reported to the nearest thousand pounds sterling with no decimal places, following the stated rounding convention
• The Front Sheet must be completed and signed each quarter by the chief executive and chief financial officer (or their alternates), per section 55(2) of the Banking Supervision (Bailiwick of Guernsey) Law, 2020, and retained by the bank (no longer sent as hard copy due to the online portal)
• The completed return must be submitted via the online submissions portal no later than close of business twenty-eight calendar days after the reporting date
• Banks must use the Standardised Approach to Credit Risk, Standardised Approach to Operational Risk and Simple Approach to Credit Risk Mitigation unless they have written permission from the Commission to use another approach
• The Monetary Aggregates return (MA/1) must be completed for every calendar month, including quarter-end months when BSL/2 is also due
• The balance sheet module must balance before submission

Applies to

banks licensed in Guernsey (subsidiaries), banks operating in Guernsey as branches, licensed institutions

Deadlines

• twenty-eight calendar days after the reporting date: Deadline for submitting the completed BSL/2 return via the online submissions portal each quarter
• monthly: Form MA/1 (Monetary Aggregates return) must be completed for all calendar months, including quarter-end months when BSL/2 is also due