Question ID
2015_1740
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory reporting - COREP (incl. IP Losses)
Article
469
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
Article/Paragraph
Annex II
Name of institution / submitter
Banco de España
Country of incorporation / residence
España
Type of submitter
Competent authority
Subject matter
Excess of deductions from AT1 items over AT1 capital which must be deducted from CET1, but is caused by the impact of transitional arrangements.
Question

How should the excess of deductions from AT1 items over AT1 capital due to the impact of transitional arrangements, which cannot be done in AT1 because of the existing amount of the instruments in this category is not large enough and thus they must be deducted from CT1, be reflected in the templates C.01.00 and C.05.01?

Background on the question

When the transitional arrangements trigger an increase of the AT1 deductions and the institution does not hold enough AT1 to be able to absorb those deductions, the remaining part should be deducted from CET1. It is necessary to establish a criterion on how these deductions should be reflected in the reporting templates, respecting the spirit of the C.01.00 which gathers the impact of all the transitional arrangements in three items for each of the capital categories. In order to achieve that C.01.00 properly reflects the amount corresponding to its nature in every item and not the amounts that correspond to other transitional arrangements, it seems reasonable to include this excess that has to be deducted from CET1 in the row 430 from C.05.01 (which will be dumped in the C.01.00, row 520), instead of being deducted directly from row 440 of C.01.00.

Submission date
Final publishing date
Final answer

The reporting instructions state clearly in point 13b) of Annex II of Regulation (EU) No 680/2014 - ITS on Supervisory Reporting of institutions (ITS) that "transitional provisions may also affect the AT1 and the T2 shortfall (...) and thus the items containing these shortfalls may indirectly reflect the effect of transitional provisions". Therefore the excess of deductions from AT1 items over AT1 capital is reported in rows 440 and 740 of C 01.00. This is done regardless of the extent to which transitional provisions are concerned and therefore is an exception from the general approach regarding the effects of transitional provisions. This is reflected in the related validation rule v0181_m which will not be amended.

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.

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