2013_482 Under the large exposure regime Article 390 (6)(e) of CRR provides an exemption for deduction of items according to article 36, 56 and 66. These deducted items must not be considered in the large exposure regime.

Question ID:

2013_482

Legal Act:

Regulation (EU) No 575/2013 (CRR)

Topic:

Credit risk

Article:

133 versus 390

Paragraph:

Subparagraph:

COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:

Not applicable

Article/Paragraph:

not applicable

Disclose name of institution / entity:

Yes

Name of institution / submitter:

Austrian Federal Economic Chamber, Division Bank and Insurance

Country of incorporation / residence:

Austria

Type of submitter:

Industry association

Subject Matter:

Under the large exposure regime Article 390 (6)(e) of CRR provides an exemption for deduction of items according to article 36, 56 and 66. These deducted items must not be considered in the large exposure regime.

Question:

Is it correct that deducted equity exposures do not need to be reported in the solvency regime as well (=same procedure as in Large Exposure regime) or do they have to be reported in asset class “equity exposures” with a risk weight of 0%?

Background on the question:

Under Basel II such deducted equity exposures have to be reported with 0% (according to the solvency regime of the Austrian Banking Act).

Date of submission:

01/11/2013

Published as Final Q&A:

19/09/2014

Final Answer:

The treatment for supervisory reporting of direct, indirect or synthetic holdings of CET1 instruments in financial sector entities is laid down in the instructions to the solvency reporting templates (templates CA1 and CA4 in particular). These holdings shall be reported as deductions from CET1. The templates and the instructions are included in the Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 as Annex I and Annex II respectively.

DISCLAIMER:

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.

Status:

Final Q&A

Answer prepared by:

Answer prepared by the European Commission because it is a matter of interpretation of Union law.

Note to Q&A:

Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR).