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Q&As refer 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.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

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List of Q&A's

Grandfathering of own funds instruments

Will preference shares issued in 2009 subscribed by the government and currently accepted as Core Tier 1 qualify for grandfathering of State aid?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_12
  • Topic: Own funds
  • Date of submission:

Grandfathering of own funds instruments

Is there any grandfathering applicable to instruments of state aid that are initially subscribed by the state but are then sold a) before 31 December 2017 and b) after that date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_11
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/10/2013

Synthetic holdings

We are considering own regulatory capital instruments which are put in pledge to the issuing bank itself as collateral for loans to customers.1) Do banks have to deduct those pledged own regulatory capital instruments under Regulation (EU) No 575/2013 (CRR) although the related loans are not granted for the purchase of these instruments (i.e. no direct funding), potentially as a synthetic holding (Article 4 (1) (126) of CRR?2) Do such pledged regulatory capital instruments still meet the “fully paid up”-criterion as per  (Article 28 (1)(b)) of CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_9
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/10/2013

Direct / indirect funding of own shares

According to In Articles 8 and 93 of Commission Delegated Regulation (EU) No 241/2014 (the draft RTS on Own Funds), what is the amount to be deducted / not to be considered eligible. If a subscription/acquisition of the institution's shares has been financed by it, what should be the impact and by which amount? There are two possibilities:A) The amount of the funding/loan granted is to be deducted from CET1 items (irrespective of the current accounting value of the shares acquired).B) The "# of shares subscribed/acquired" times the "per share accounting amount of total equity" is not to be given recognition as a positive item of CET1In case the instruments are not given recognition, what is the amount not to give recognition:A) Amount of the funding given to buy the shares (at the market value); or,B) Corresponding accounting amount of the shares bought (which is different from A if the book value is different from the market capitalization of the institution)?Example:An institution issues capital at par, i.e., book value per share = 100 and market value per share = 100.The share drops in price and is now valued at 80 (new market price). However, this market devaluation does not have a correspondence in the accounting value which remains at 100.The institution finances a customer to buy 2 shares, so finances with 160.Questions1) Should the institution not recognize as a positive item: 160 (funding given to buy the 2 shares) or 200 (accounting value of the 2 shares whose purchase was financed by the institution)2) In the example the credit to the issuer is higher than the stock financed and the share increases in value. What amount has to be considered?3) In the example above, there is collateral posted. What amount has to be considered? Does the treatment change depending on whether the collateral is junior or senior to the delivery of the own shares?4) In the example above, there is impairment associated with the funding provided (though this one is broadly covered in the article). What is the treatment when the funding provided is higher than the share bought)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_8
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/10/2013