Seniority is not specified in some CDS instruments. Could we consider them as Senior Unsecured?
Some CDS instruments such as AXA CDS or AVIVA do not specify seniority.
The submitter should report the Instruments in the Annex 5, credit spread instrument following market convention, when not specified otherwise, therefore the submitter should consider them as senior Unsecured. The submitter should mention this in the explanatory document, as required by the letter (n)
“j” and “ ko” of the instruction of Annex 5. (quoting letter “ ko”: “ In the case that a bankWhere the institution is required to make additional assumptions beyond those specified here that it believes are relevant to the interpretation of its exercise including close of business timing, coupon rolls, mapping against indices and others, it shall submit a description of those specifications in the explanatory note referred to in point (d)” results […], it should submit a description of those specifications in a separate explanatory document to be delivered to the Competent Authority accompanying the results.”). Disclaimer
The present Q&A on Supervisory reporting is provisional. It will be reviewed after the Implementing Regulation is in force and published in the Official Journal. The text of the Implementing Regulation may differ from the text of the draft ITS to which this Q&A refers.
Update 03.12.2021: This Q&A has been updated in the light of the most recent amendments to the ITS 2016/2070 on Supervisory Benchmarking.