Guidance Note: Validation and verification of the '4.1 BIA' Sheet (JIBs prudential reporting)

Summary

This is a technical guidance note from the JFSC explaining the validation and verification checks applied to the '4.1 BIA' sheet of the prudential reporting template used by Jersey International Banks (JIBs) that calculate operational risk using the Basic Indicator Approach (BIA). It sets out the specific cell-level rules, error checks and calculation formulas the JFSC's systems apply when a JIB submits its prudential return.

• Data input validation: Certain cells must be left blank unless the reporting bank uses the BIA method (as recorded in the Submission Header), while other cells must contain whole numbers within the range -1,000,000,000 to +1,000,000,000 (in units of £1,000).
• Calculation checks: Several cells are auto-calculated (e.g. sums, counts, averages, and the capital charge formula = ROUND(D9*15%*1250%,0)) and are checked for internal consistency.
• Logical checks: A consistency check confirms that if the Operational Risk Method is not 'BIA', all data entry cells on the '4.1 BIA' sheet must be blank; failures are highlighted in red in the template.
• Submission process: Excel's own validation is not a failsafe; the JFSC re-checks all data on submission and communicates acceptance or a list of warnings to the JIB.

The note is purely explanatory of the reporting template's built-in checks and does not itself introduce new substantive reporting obligations beyond ensuring accurate, consistent data entry in line with the chosen operational risk calculation method.

Key obligations

• JIBs must ensure no data is entered in the 4.1 BIA sheet unless the JIB uses the BIA method for calculating operational risk, and this must be reflected in the Submission Header.
• JIBs must ensure monetary amount cells contain only whole numbers within the range -1,000,000,000 to +1,000,000,000 (in £1,000 units) where input is required.
• JIBs must check their own data for accuracy before submission, since Excel's built-in validation is not a failsafe.
• JIBs must ensure that if the Operational Risk Method is not 'BIA', all data entry cells on the '4.1 BIA' sheet are left blank.

Applies to

Jersey International Banks (JIBs)