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List of Q&A's

Interpretation of validation rules v90316_m and v90317_m for “Average Value” column c0070 in template C 16.02

Under Regulation (EU) 2024/3117 and template C 16.02 (“Business indicator and business indicator components”), column c0070 is labelled as “Average Value”. The following validation rules apply: v90316_m:{r0310,c0070} = sum({r0320,(c0010,c0030,c0050)}) - sum({r0330,(c0010,c0030,c0050)}) / 3 v90317_m:{r0340,c0070} = sum({r0350,(c0010,c0030,c0050)}) - sum({r0360,(c0010,c0030,c0050)}) / 3 Based on standard operator precedence, the “/3” appears to apply only to the IPS adjustment terms (r0330 and r0360), and not to the complete fee and commission income/expense calculations. As a consequence, for institutions without IPS balances (r0330 = 0 and r0360 = 0), the validations effectively become: {r0310,c0070} = sum({r0320,(c0010,c0030,c0050)}) and {r0340,c0070} = sum({r0350,(c0010,c0030,c0050)}) This appears to imply that c0070 should contain a three-year cumulative sum instead of a three-year average. Could the EBA clarify whether: the current validation behaviour is intentional; or the intended validation should instead be interpreted/calculated as: (sum({r0320,(c0010,c0030,c0050)}) - sum({r0330,(c0010,c0030,c0050)})) / 3 and (sum({r0350,(c0010,c0030,c0050)}) - sum({r0360,(c0010,c0030,c0050)})) / 3

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Incoherent formulae of the validation rule v90317_m

The control formula currently in place for column 0070 / row 0340 of template C16.02 does not seem aligned with your definition of this indicator. Could you clarify the expected logic?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Incoherent formulae of the validation rule v90316_m

The control formula currently in place for column 0070 / row 0310 of template C16.02 does not seem aligned with your definition of this indicator. Could you clarify the expected logic?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Incoherent formulae of the validation rule v90315_m

The control formula currently in place for column 0070 / row 0260 of template C16.02 does not seem aligned with your definition of this indicator. Could you clarify the expected logic?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

incoherent formulae

The formula of control v90322_m seems not relevant.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Controls v90304_ and v903265_s

Why does the v90304_m control check that line 020 is equal to the sum of lines 030 and 070 because normally line 020 should be equal to line 030 minus line 070 as indicated in the document "annex_1_solvency_-_crr3_-_phase_1_-_op_risk_tc.xlsx" of your publication of 20/02/2024 (The EBA consults on amendments to the operational risk Pillar 3 and supervisory reporting requirements to implement the Basel III reforms in the EU | European Banking Authority) ? Why does the v903265_s control check that line 020 must be greater than or equal to 0 because the net income could be negative ?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Validation Rules

Validation rule V89101_S (with {tK_19.02.a, c*, default: null, interval: false}: {(r0040, r0090)} <= 0) of the Pillar 3 template EU OR2: it appears that the two rows “1b. Interest and lease expense” and “2b. Fee and commission expense” have to be reported with the negative sign or as zero. We guess that these two rows should be reported as positive or zero, because of the following reasons: It is already known, by definition, that they are “expenses”. This validation rule is not extended to the row “2d. Other operating expense”. Considering the DPM 4.2, which will enter into force from Q1 2026, the Validation Rules v903192_s (with {tC_16.02, c0070, default: null, interval: false}: {(r0010, r0110, r0200, r0220, r0260, r0310, r0340, r0370, r0420)} >= 0) and v903193_s (with {tC_16.02, default: null, interval: false}: {(r0020, r0030, r0040, r0050, r0060, r0070, r0080, r0090, r0100, r0120, r0130, r0140, r0150, r0160, r0170, r0180, r0190, r0210, r0230, r0240, r0250, r0270, r0290, r0300, r0320, r0330, r0350, r0360), (c0010, c0030, c0050)} >= 0) of the CoRep template C16.02 appear to require that all the expenses related items have to be reported with positive sign or as zero. Considering the mapping tool provided within the EBA Consultation Paper of February 2024 on OpRisk disclosure (file “mapping_tool_for_crr_3-step1-oprisk_tc.xlsx”), for the part related to the Pillar 3 template EU OR2, a direct link was reported to the related cells of the CoRep template C16.02, which were required to be positive by the Validation Rules reported at the previous point. In the Quantitative Impact Study (QIS), performed semi-annually by the Basel Committee, the sheet “OpRisk” requires reporting the items “Interest expenses (including financial and operational lease)”, “Fee and commission expenses”, and “Other operating expenses (except for financial and operational lease)” with a positive sign or as zero.   Validation rule V89104_S (with {tK_19.02.b, c0050, default: null, interval: false}: {r0190-0200} <= 0) of the Pillar 3 template EU OR2: it appears that the items “6b. Reduction in BI due to excluded divested activities” and “6c. Impact in BI of mergers/acquisitions” have to be lower than or equal to zero. We guess that the items “6b. Reduction in BI due to excluded divested activities” and “6c. Impact in BI of mergers/acquisitions” should be reported as zero or positive for the following reasons: It is already known, by definition, that item 6b is a “reduction”. Item 6c, i.e., the impact of an M&A operation, is generally positive. Considering the DPM 4.2, which will enter into force from Q1 2026, there are no Validation Rules that require reporting the columns 0020 (“of which: adjustments due to merge/acquisition of entities or activities”) and 0030 (“(Adjustments due to disposal of entities or activities)”) with a negative sign or as zero. Considering the mapping tool provided within the EBA Consultation Paper of February 2024 on OpRisk disclosure (file “mapping_tool_for_crr_3-step1-oprisk_tc.xlsx”), for the part related to the Pillar 3 template EU OR2, a direct link was reported to the related cells of the CoRep template C16.01, where the item 6b has to be “'={C 16.01, r0020, c0030}” (“Business indicator” / “(Adjustments due to disposal of entities or activities)”) and the item 6c has to be “={C 16.01, r0020, c0020}” (“Business indicator” / “of which: adjustments due to merge/acquisition of entities or activities”). Considering the previous point, no Validation Rules are coming from the CoRep template C16.01. In the Quantitative Impact Study (QIS), performed semi-annually by the Basel Committee, in the sheet “OpRisk,” the item “Reduction in BI due to excluded divested activities” is reported with a positive sign or as zero.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

incoherent formulae

Should the v903188_s control formula apply to columns 0010 and 0020?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

incoherent formulae

Should the v903188_s control apply for establishments that do not supply the C16.04 status?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

incoherent formulae

Is the v90304_m control formula consistent with the other controls on C16.02 ?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Calculation of dividend component at individual accounts of the institution

In the context of CRR article 314(2), should the dividend component (DC) at individual level include the dividends received from wholly owned subsidiaries?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Validation rules taxonomy V4.0 C_17.01

Validation rule v23510_h incorrect

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Validation rules v23509_h and v23510_h appear incorrect

Are validation rules v23509_h and v23510_h correct?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions

Validation rules taxonomy V4.0 C_17.01

The formula of control v23509_h seems not relevant

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions

Netting of income and expenses and mutualisation of losses for IPS in the Service Component of the Business Indicator (BI)

To which items of the Services Component, the net of “any income received from, or expenses paid to” of the second paragraph of Art. 314(5) refers to? It is unclear whether it refers to all the items of the Services Component, to the income and expenses of the “Fee & Commission” or to the income and expenses of the “Other Operating” as defined in Art. 314(5) first paragraph.  The last sentence of Art. 314(5) provides the following: “Any losses resulting from the related operational risks are subject to mutualisation across institutional protection scheme members.” Is it a requirement for the use of the netting exemption? Can institutions that are members of an institutional protection scheme meeting the requirements of Article 113(7) apply the netting or can such institutions apply the netting only if there is a mutualisation by the Institutional Protection Scheme (IPS)? Is this mutualisation referring to threatening operational risk losses only or to any losses resulting from the related operational risk events? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

OFR for operational risk on the date 31 December 2024

What method should we use to calculate the OFR on 31 December 2024 (e.g. to present in COREP 16.00) - new standardised approach according to CRR3 or one of existing approaches (BIA, TSA, AMA)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Operational risk – gross loss in tax related events in accordance with REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor, Article 318.

How should an institution calculate gross loss based on the regulatory changes stipulated in Article 318. of the Regulation amending Regulation 575/2013 in the following examples? Case 1 – Delayed tax payment, penalty interest payment, and system repairment expenses Case 2 – Delayed tax payment, no penalty interest payment, system repairment expenses.  Case 3 – Tax to be paid for this year and previous years, no penalty interest, or fine, financial reports for previous year to be revised and re-published.  Case 4 – Tax to be paid for this year and previous years, no penalty interest or fine, no changes to financial reports for previous year.  Case 5 – Tax to be paid for this year and previous years, penalty interest and fine, financial reports for previous year to be revised and re-published Case 6 – Tax to be paid for this year and previous years, penalty interest and fine, no changes to financial reports for previous year   

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Applicability of the Guidelines of the Committee of European Banking Supervisors on the management of operational risks in market-related activities (12 October 2010)

Are the Guidelines of the Committee of European Banking Supervisors on the management of operational risks in market-related activities (12 October 2010) still in force and applicable? Is the same legal reasoning used under Question 2020_5340 applicable?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

near miss

Hi I am looking for the definition and description of near- miss events and if possible also provide some examples. 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable