Question ID
2013_192
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Liquidity risk
Article
411
Paragraph
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
-
Type of submitter
Credit institution
Subject matter
Definition of the words "on group basis"
Question

What is the definition of the words “on a group basis” in Article 411 (2) of Regulation (EU) No 575/2013 (CRR)

Background on the question

In the last draft-version from 27 April 2012 of the CRR the definition of ‘retail deposits’ related to SMEs was given by the applicable exposure class “where the aggregate liability to such clients or group of connected clients shall not exceed 1 million EUR”. This is in contrast to the final version where the definition of ‘retail deposits’ of SMEs additionally relates to the calculation of the exposure of a firm belonging to a group with consolidated total annual sales (or total assets, if more appropriate) of no more than EUR 50 million "where the aggregate deposits by all such enterprises on a group basis do not exceed EUR 1 million.“ The issue with this definition is in the words ‘on a group basis’ as this is not specified anywhere in the context. It might be assumed that a ‘group of connected clients’ (as defined in Article 4 par. 1 No. 39 CRR) is meant here but it appears to be a valid interpretation that reference is done to a ‘group of institutions’.

Submission date
Final publishing date
Final answer

If a term is not defined in the Regulation, the Q&A instrument cannot be used to provide a formal, legal definition. Non-defined terms must be interpreted according to the general meaning of the terms used, together with other recognised interpretative methods, such as contextual interpretation and by identifying the objective of the concerned provisions. From the context, it is clear that group refers to parties making deposits and not to a group of reporting institutions.

DISCLAIMER:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Internal Market and Services) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A

Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR).

Disclaimer

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