In June 2009 the Committee of European Banking Supervisors (CEBS) published its consultation paper (CP 27) on its implementation guidelines on hybrid capital instruments. The consultation is open to all interested parties, including supervised institutions and other market participants.
Following CEBS’s proposal for a common EU definition of Tier I hybrids, published in April 2008, explicit rules for the treatment of hybrid capital instruments are now included in the amended Capital Requirements Directive (CRD).
This consultation paper responds to Article 63a (6) of the revised CRD that requires CEBS to “elaborate guidelines for the convergence of supervisory practices with regard to the instruments referred to in Article 63a (1) and in Article 57(a) and monitor their application”. In addition, the draft guidelines aim to complement the new CRD provisions, in particular Articles 63a and 66 (1a) where additional guidance appears necessary or appropriate. Thus, the draft guidelines presented in this consultation paper cover the topics of permanence, flexibility of payments, loss absorbency, limits and hybrid instruments issued through an SPV.
Comments received will be published on CEBS’s website unless respondents explicitly request otherwise.
A public hearing will take place on Tuesday, 8 September 2009 from 9.30 am to 1.00 pm at the CEBS’s premises in order to allow all interested parties to put forward their views on the consultation paper.
Registrations should be received by Wednesday, 2 September 2009.