Question ID
2013_221
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Own funds
Article
48
Paragraph
1
Subparagraph
b
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Not applicable
Name of institution / submitter
Bulgarian National Bank
Country of incorporation / residence
Bulgaria
Type of submitter
Competent authority
Subject matter
Exemptions from deduction for CET1 items
Question

In Article 48(1)(b) of Regulation (EU) No 575/2013 (CRR) it states: 'where an institution has a significant investment in a financial sector entity, the direct, indirect and synthetic holdings of that institution of the CET1 instruments of those entities that in aggregate are equal to or less than 10% of the CET1 items of the instritution calculated after applying the following:' Question: When making the comparison between the amount of investment and CET1 of the reporting institution, does that comparison refer to the aggregate amount of all significant investments in all financial sector entities OR the comparison should be made on an individual entity basis?

Background on the question

Further clarification is needed because the impact on the own funds would be significantly different in applying the 2 scenarios.

Submission date
Final publishing date
Final answer

Article 48(1)(b) of Regulation (EU) No 575/2013 (CRR) clearly states that the comparison has to be made between all the reporting institution's holdings in financial sector entities in aggregate and the threshold of 10% of the reporting institution.

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

The Q&A refers 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.