Question ID
2014_1102
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Market risk
Article
305
Paragraph
2
Subparagraph
c
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
N/A
Type of submitter
Investment firm
Subject matter
Clarification regarding the legal opinion mentioned in Article 305 of Regulation (EU) No 575/2013 (CRR)
Question

Is it correct to assume that the specific legal opinion mentioned as a prerequisite in Article 305(2)(c) CRR only needs to confirm that the other prerequisites 'individual client segregation' in Art 305(2)a) and the facilitation of the portability of client assets under Art 305(2)(b) are in place and fulfilled (in a sense that the respective legal position of the client is enforceable under respective law(s)), or does the legal opinion need to address additional legal questions beyond that scope? In the latter case what kind of legal questions beyond Art 305(2)(a) and (b) would such legal opinion need to address?

Background on the question

Art. 305(2)(c) requires a client to obtain a legal opinion which needs to address a very general question (under potentially various jurisdictions) which in the opinion of many lawyers is too vague to be satisfactorily answered in such a general sense. Consequently if the scope of the legal opinion would go beyond the fact that segregation and portability are in place then such legal opinions would potentially need to be produced under various caveats resulting in a very broad and general statement which would very much impact the significance of the legal opinion while disproportionally inflating the costs of creating it.

Submission date
Final publishing date
Final answer

While the legal opinion has to conclude what is explicitly required under Article 305(2)(c) of Regulation (EU) No. 575/2013, the focus should indeed be on the segregation and portability arrangements entered into by the client (i.e. that the conditions in points (a) and (b) of Article 305(2) are fulfilled), including the effectiveness/enforceability of those arrangements.

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.