Bank of Israel Reporting
Comply with all your global derivative reporting obligations
What is Bank of Israel reporting?
On 1st of January, 2017, the Bank of Israel will introduce this mandatory derivative reporting requirement on over-the-counter derivatives on FX and rates. The regime is the second Bank of Israel reporting regime in recent years, the first was introduced six years prior; on 1st July 2011.
The Bank of Israel reporting regime is unique in the following ways:
- Extra-territoriality – it requires foreign firms (and indeed, any foreign firm over the volume threshold) to report, with financial sanctions possible for firms that do not report.
- Reportable asset classes – although only FX and rates derivative transactions in Israeli shekel (or otherwise involving or referencing a shekel-denominated asset, benchmark or rate) are reportable, the reporting obligation also includes FX spot – which is typically not considered a derivative.
The reporting obligation starts on 1st January 2017 for all reporting firms. Firms may also apply to the Bank of Israel for an extension to this, so long as their application to do so is received before 1st November 2016.
Who is affected by the regulation?
The following firms have to report:
- Israeli banks
- Israeli financial institutions above the threshold
- All non-Israeli firms above the threshold
The volume threshold concerns average daily notional executed (irrespective of whether this was on the firm’s own behalf or whether on behalf of clients) over a rolling lookback period of one year. If the average daily notional of reportable FX instruments and reportable options over this lookback period for that firm exceeds USD15m in aggregate gross notional, then firms will need to report to the Bank of Israel until a year has passed with the average daily notional threshold not being met. The day count convention used is 250 days in a year.
Which trades need to be reported?
Derivatives from the following asset classes need to be reported, where they are shekel-denominated (ISO currency code ILS), involve shekel, or reference a shekel yield or interest rate:
- FX (Includes FX spot)
A list of the reportable instruments is as follows (where they are shekel-denominated (ISO currency code ILS), involve shekel, or reference a shekel yield or interest rate):
- FX spot
- FX forwards
- FX swaps
- FX CFDs/spreadbets
- Inflation swaps
- FRAs (forward rate agreements)
- IRS (interest rate swaps)
- Coupon swaps
- Basis swaps
- Cross-currency swaps
- FX options (both deliverable and non-deliverable)
- Inflation options
- Rates options, caps and floors
What is the deadline for reporting?
T+1, the day after the trade is executed. A monthly report of all reportable transactions executed in that month must be submitted, as well as all transactions outstanding at the end of their month and their valuations.
Benefits of using UnaVista as a provider for your Bank of Israel reporting
Some of the key benefits that organisations have experienced when implementing The London Stock Exchange’s technology for their G20 reporting include:
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- Additional reporting
- Straightforward workflows
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- Automated, time efficient approach
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Hosted at the London Stock Exchange
- No IT hardware costs
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Low-cost, low-risk implementation
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Simple pricing model
- Flexible service charge pricing rather than up front perpetual license
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