With regards to both: • deposits in the context of Clearing, Custody and Cash Management, Article 422(3)(a) and (d) Regulation (EU) No 575/2013 (CRR), • deposits in the context of an established operational relationship Article 422(3)(c) (recognising the definition of an established operational relationship here is pending from the EBA), what type of 'evidence' are institutions required to demonstrate (Article 422(4)) and how conclusive does this evidence need to be for the deposit to be considered eligible? Also, with regard to Article 422(3)(c), it would appear from Article 509(2)(k) that established operational relationships will only be seen with non-financial corporates. Can you confirm if this is the case?
25% deposit outflow
Article 422(4) second subparagraph of Regulation (EU) No 575/2013 (CRR) states that, pending a uniform definition on an established operational relationship, institutions shall themselves establish the criteria to identify an established operational relationship for which they have a evidence that the client is unable to draw amount legally due over 30 days without compromising their operational functioning. The institution shall report these criteria to the competent authority. In the absence of a uniform definition competent authorities may provide general guidance.
Notwithstanding the above mentioned article and any guidance provided by competent authorities in the absence of a uniform definition, for deposits under Article 422(3)(a) and (d), institutions can provide different forms of evidence that a client cannot withdraw deposited amount. These could include, for example, the following elements:
As regards reporting of deposits from financials, it should be noted that while Article 509(2)(k) is clearly focused on established operational relationships with non-financial customers, Article 422(3)(c) refers to operational deposits that have to be maintained by the depositor in the context of an established operational relationship other than those reported in accordance with Article 422(3)(a), and as such, operational deposits from financial customers are not excluded from being reported in accordance with Article 422(3)(c).
Update 26.03.2021: This Q&A has been archived as the issue it deals with is addressed in Article 27 of Delegated Regulation (EU) 2015/61 and the July 2019 EBA report on LCR implementation in the EU.