Question ID
2017_3129
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Liquidity risk
Article
422, 460
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
Article/Paragraph
27
Type of submitter
Credit institution
Subject matter
Outflows associated with Payment Institutions' escrow accounts
Question

Can the escrow accounts held for Payment Institutions be considered as operational deposits ?

Background on the question

Payment Institutions are legally required to transfer the funds they receive to dedicated escrow accounts. These accounts are generally held in the books of Credit Institutions and mirror the deposits collected by the Payment Institutions. Payment Institutions cannot withdraw these funds freely.

Submission date
Final publishing date
Final answer

Deposits that are maintained by payment institutions in accordance with their legal obligation to safeguard funds received from their clients (e.g. escrow accounts) may be considered as operational deposits raised in the context of an established operational relationship according to Article 27(1)(a) of the Commission Delegated Regulation (EU) 2015/61 (LCR DA) to the extent that the conditions set out in Article 27(4) LCR DA are met.

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.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.