Question ID:
2014_759
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Transparency and Pillar 3
Article:
13
Paragraph:
1, 2, 3
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
13(1), 13(2)
Disclose name of institution / entity:
Yes
Name of institution / submitter:
Clearstream Holding AG
Country of incorporation / residence:
Germany
Type of submitter:
Other
Subject Matter:
Disclosure of certain information by large subsidiaries of EU parent institutions on an individual or sub-consolidated basis
Question:

The disclosure information of regulatory groups is according to Article 13(1)/(2) first paragraph (each) of Regulation (EU) No. 575/2013 (CRR) to be done on a consolidated basis in any case. However, Article 13(1)/(2) second paragraph (each) of the CRR requires the disclosure of certain information by significant subsidiaries etc. as well. In the past, the implementation of that rule in Article 72 of Directive 2006/48/EC led in practice to the disclosure of only one consolidated report disclosing the required information also for all individual institutions or sub-groups which are of material significance. To our understanding, there exists a factual possibility for the entity in charge of the disclosure obligation on a consolidated level to either separately disclose the required information within one disclosure report or to take care for the issuance of separated individual disclosure reports of the significant subsidiaries and/or those subsidiaries which are of material significance for their local market.

Is it possible to disclose also under CRR only a consolidated disclosure report with – in case need be – individual information per institution when requested? Is this particularly the case, where that practice has been used in the past and accepted by the national competent authorities?

Background on the question:

The disclosure information of regulatory groups is according to Article 13(1)/(2) first paragraph (each) of Regulation (EU) No. 575/2013 (CRR) to be done on a consolidated basis in any case.

However, Article 13(1)/(2) second paragraph (each) of the CRR requires the disclosure of certain information by large subsidiaries etc. as well. In the past, the implementation of that rule in Article 72 of Directive 2006/48/EC led in practice to the disclosure of only one consolidated report disclosing the required information also for all individual institutions or sub-groups which are of material significance. To our understanding, there exists a factual possibility for the entity in charge of the disclosure obligation on a consolidated level to either separately disclose the required information within one disclosure report or to take care for the issuance of separated individual disclosure reports of the large subsidiaries.


According to the precise wording of Article 13(1) paragraph 2 and (2) of the CRR large subsidiaries of EU parent institutions shall disclose the information specified in Articles 437, 438, 440, 442, 450, 451, 451a and 453 on an individual basis or, where applicable in accordance with this Regulation and Directive 2013/36/EU, on a sub-consolidated basis. significant subsidiaries of EU parent institutions/EU parent financial holding companies/EU parent mixed holding companies and those subsidiaries which are of material significance for their local market shall disclose, on an individual or sub-consolidated basis, certain information.

We are of the opinion that an individual report disclosing only the limited information requested but not embedded in a full disclosure report is hardly readable and not delivering the intended insight into that institution. Consequently, we read the text as there being the need to disclose at least the named information on an individual basis. This can be done either (a) within the consolidated report or (b) in addition to the consolidated report in a stand alone disclosure report. In our opinion both options described above fulfil the requirements of Article 13 as they clearly address the intention of the rule to disclose the relevant information of significant institutions or sub-groups on an individual basis while being embedded in the context of a full disclosure report.

Date of submission:
23/01/2014
Published as Final Q&A:
30/04/2014
Final Answer:

The first second subparagraphs of Article 13(1) and (3) (2) of Regulation (EU) No. 575/2013 (CRR) lay down the disclosure requirements that significant large subsidiaries of either EU parent institutions or of parent undertakings established in a third country of institutions controlled by an EU parent financial holding company or EU parent mixed financial holding company and subsidiaries of those EU parent institutions or companies which are of material significance for their local market shall make on an individual or, where appliable, ona a sub-consolidated basis, as applicable.

The disclosure requirements in question are those specified in Articles 437, 438, 440, 442, 450, 451
, 451a and 453 of the CRR.

Article 434 of the CRR prescribes that
, institutions shall disclose all the information required under Titles II and III of Part Eight of the CRR in electronic format and in a single medium or location to the degree feasible, all disclosures of Part VIII shall be provided in one medium or location. Although this provision applies to parent companies regarding information to be provided on a consolidated basis, it should also serve as good practice for the location of disclosures to be provided by significant large subsidiaries or subsidiaries which are of material significance for their local market.

Where parent institutions or companies include the disclosures to be provided by their
significant large subsidiaries or subsidiaries of material significance for their local market in their consolidated report, it should allow clear identification of the entity to which those disclosures relate. To the extent the disclosures requested under the second paragraphs of  Article 13(1) and (2) (3) of the CRR are not provided within the consolidated report of the parent company, but in one or more separate reports, cross-references between these disclosures and the disclosures of the EU parent institution or company should be provided.

Where
significant large subsidiaries or subsidiaries of material significance for their local market provide the disclosures required under the second paragrpahs of Article 13(1) and (2) (3) separately from their parent's consolidated report, this information should be provided to the degree feasible in one medium or location. As before, if provided separately in one or more separate reports (as applicable), appropriate cross-references between these separate report(s) should be included.

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 updated in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR).

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