Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Own funds
52, 63, 484
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
not relevant
Disclose name of institution / entity:
Type of submitter:
Credit institution
Subject Matter:
Treatment as own funds under Regulation (EU) No 575/2013 (CRR)

Confirmation is sought that instruments that initially qualified for transitional treatment in a higher own funds category according to CRR transition rules in Articles 484ff, but for which documentation had to be altered to a lower own funds category as instructed by a court ruling following a litigation, are to be reported as fully compliant with that lower own funds category. More background information on the instruments will be made available directly to EBA.

Background on the question:

Treatment of own funds instruments where terms and conditions were clarified and retrospectively altered as instructed by a Court ruling.

Date of submission:
Published as Final Q&A:
Final Answer:

Q&A 2013-16 indicates that "a material change in the terms and conditions of a pre-existing instrument shall be considered in the same way as the issuance of a new instrument", without distinguishing cases where these changes have been triggered by the institution or imposed by an external party, which should then apply similarly.

In order for the amended instrument to be reported as fully compliant with the lower own funds category, it would need to meet all CRR eligibility criteria for this category (in particular the absence of incentives to redeem).

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.