Should Article 494a(1) and (2) of the CRR also cover points (p), (q), and (r) of Article 52(1) and points (n), (o) and (p) of Article 63, respectively?
Article 494a (1) and (2), point (a) of Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 (CRR) states that the condition laid down in Article 52(1) (for AT 1 instruments) / Article 63 (for Tier 2 instruments) of the CRR requiring the direct issuance is exempted. However new requirements are also introduced in Article 52 points (p), (q) and (r) and Article 63 points (n), (o) and (p). It does not make sense to only exempt the direct issuance requirement, without also exempting these other new requirements, as „old-style“ instruments issued via SPEs will certainly not meet them.
Regulation (EU) No 575/2013 (CRR), as amended by Regulation (EU) 2019/876, provides for the grandfathering of own funds instruments with respect to certain eligibility criteria, in order to avoid cliff-edge effects (see recital 28 of Regulation (EU) 2019/876).
For own funds instruments, the grandfathering ends on 31 December 2021 and on 28 June 2025, respectively, depending on the date of issuance of the respective instrument and on which eligibility criteria are not met (see, for instance, Articles 494a and 494b of the CRR).
In response to the question raised by the submitter, it has to be noted that the two transitional Articles 494a and 494b of the CRR are complementary with each other and with Articles 52 and 63 of the CRR. They need to be read together, as both constitute derogations from Articles 52 and 63. This means that, when compliance with the conditions in Articles 52 and 63 is checked, the eligibility of the instrument for grandfathering under Articles 494a and/or 494b of the CRR also needs to be assessed.
This might be best explained by considering the following examples that are based on Articles 494a(1) and 494b(1) of the CRR:
The above listed examples apply mutatis mutandis to Tier 2 instruments (see Articles 494a(2) and 494b(2) of the CRR, respectively).
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