Does the application of the 4% risk weight referred to in Article 305(3) presuppose that the omnibus model meets all requirements set out in Article 305(2) lit (a) to (d) CRR and article 305(3) CRR together? Or, is Article 305(3) CRR meant to replace the requirement in article 305(2)(a), which presupposes an individual style segregation model?
The question whether omnibus clearing models which are based on net omnibus segregation principles may benefit from the regulatory capital regime as set out in article 305(3) CRR is complex and there are possible arguments both ways as to the correct construction of the wording of that provision. In particular, the reference in Article 305(3) to ‘all other conditions in paragraph 2 are met’ could imply that segregation models must meet 305(2) points (a) to (d) and 305(3). If this is the case then the application of the treatment in accordance with Article 306, subject to replacing the 2 % risk weight with a 4 % risk weight referred to in Article 305(3), is essentially obsolete because only an individual segregation model would meet all the conditions of 305(2) and 305(3). Alternatively, the reference to ‘all other conditions’ could be understood to mean that the conditions of 305(3) should be considered in lieu of 305(2)(a).
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.
If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.