Article 194(1) of the Regulation (EU) 575/2013 requires that credit protection is legally effective and enforceable in all relevant jurisdictions. This condition must be met before the credit protection can be considered as an eligible credit risk mitigation technique. The only way for an institution to establish whether this condition is met is to obtain a legal opinion.
The requirement in the abovementioned Article does not specify that such opinion needs to be obtained from an external legal counsel. As long as it is “independent, written and reasoned” it may also be provided by an internal legal counsel.
On the issue of whether an opinion must be specific to the relevant transaction covered and the technique employed by the institution or whether it can be a generic one, it depends mainly on the nature of the two. If an institution engages in the same type of transaction, with counterparties located in the same jurisdiction and uses the same credit risk mitigation technique, then it can rely on the same opinion. For example, if an institution uses a master netting agreement for which a generic opinion exists, it can use that opinion as long as the latter clearly indicates that the agreement is legally effective and enforceable in all the jurisdictions relevant to the transactions covered by that agreement.
This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate–General of the Commission (Directorate General for Internal Market and Services) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.