2013_56 Grandfathering on own funds instruments

Question ID:: 2013_56
Legal Act:: Regulation (EU) No 575/2013 (CRR)
Topic:: Own funds
Article:: 489
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:: Not applicable
Article/Paragraph:: N/A
Disclose name of institution / entity:: No
Type of submitter:: Credit institution
Subject Matter:: Grandfathering on own funds instruments
Question:: What will be the treatment of the "phased-out" amounts which exceed the applicable percentages according to Article 486 (5)) of grandfathered Additional Tier 1 instruments which are non-eligible due to an incentive to redeem (accord. to Art 489) or a coupon pusher (accord. to Art 53 (a)), during the grandfathering period (accord. to Art. 486 (5)). Will the phased-out amounts flow into grandfathered Tier 2 amounts (subject to applicable limits) or will they lose their regulatory recognition completely (i.e. are these amounts entirely eliminated from regulatory own funds)?
Background on the question:: -
Date of submission:: 10/07/2013
Published as Final Q&A:: 15/11/2013
Final Answer:: See QA 2013 15 and QA 2013 31.
Status:: Final Q&A
Answer prepared by:: Answer prepared by the EBA.
Note to Q&A:: Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.