The eligibility for grandfathering of both innovative and non-innovative instruments is determined in accordance with the provisions of Regulation (EU) No. 575/2013 (CRR).
For instruments issued under national transposition measures of Article 57(ca) of Directive 2006/48/EC, Article 484(4) of the CRR applies.
The limits for grandfathering applicable to those instruments are determined in accordance with Article 486(3) and (5) of the CRR. The conditions for the inclusion of hybrid instruments with a call and incentive to redeem are further specified in Article 489, and were also clarified in QA 2013_15.
Tier 1 instruments issued under national transposition measures of Article 57(ca) of Directive 2006/48/EC without an incentive to redeem shall be included in Additional Tier 1 subject to the limits referred to in Article 486 (3) and (5), regardless of the frequency of subsequent calls.
Amounts of such instruments exceeding the applicable percentage referred to in Article 486(3) may be treated as items referred to in Article 484(5) if they comply with the conditions of Article 487(2).
Provided the instrument meets all the criteria of Article 63 of the CRR, amounts of such instruments in excess of the limit referred to in Article 486(3) may also be treated as fully eligible Tier 2.
It should be noted that the Regulation does not prohibit subsequent calls after the first call date, but also that dividend pusher and stopper clauses that are common in instruments issued under national transposition measures of Article 57(ca) of Directive 2006/48/EC may interfere with the institution's flexibility to cancel distributions on other classes of capital instruments (see related QA 2013_21 and QA 2013_54 for further information).