- Question ID
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2015_1925
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- Resolution financing arrangements
- Article
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103
- Paragraph
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2
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Delegated Regulation (EU) 2015/63 - DR on ex ante contributions to resolution financing arrangements
- Article/Paragraph
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12, 14
- Type of submitter
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Competent authority
- Subject matter
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Annual contribution of institutions newly supervised, institutions non existent in the reference year for contribution calculation, and institutions that ceased to be supervised
- Question
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How to apply a requirement of the Article 12 of DA to determine a partial contribution calculated during subsequent contribution in case newly supervised institutions, institutions that ceased to exists / be supervised, and the institutions that were not existent in time in the reference year for contribution calculation as detailed in Article 14 of DA?
- Background on the question
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The contributions to resolution financing arrangements of institutions are primarily based on audited data preceding the calculation / contribution period by two years, i.e. the first contributions raised in 2015 will be based on 2013 data.
The way how to calculate the contributions is straightforward in cases where the institution existed / was supervised for the full reference year. In cases, where the institution did not exist or ceased to exist in the reference year, is however less clear.Annual contributions of institutions that were supervised in the full reference year shall be based on data as stated in Article 14 (1) of the Commission Delegated Regulation (EU) 2015/63.
Annual contribution of institutions that were supervised in part of reference year shall be based on data as stated in Article 14 (1) of the Commission Delegated Regulation (EU) 2015/63, however, the contribution shall be only partial as stated in Article 12 (1).
Annual contribution of institutions that were not yet supervised in the reference year shall be based on latest available approved annual financial statements as defined in Article 14 (1) of the Commission Delegated Regulation (EU) 2015/63.
Institutions that started to be supervised in particular year in which the annual contributions are raised, do not contribute in that particular year. The very next year, contributions of such institutions shall be based on latest available approved annual financial statements as defined in Article 14 (1) of the Delegated Act.
Institutions that cease to exists / be supervised in particular year in which the annual contributions are raised before the contribution is determined and notified towards the institution as stipulated by Article 13 do not contribute.
Institutions that cease to exists / be supervised in particular year in which the annual contributions are raised after the contribution is determined and notified towards the institution as stipulated by Article 13 contribute fully.
The suggested reasoning here is that all the institutions supervised in a particular year in which the annual contributions are raised shall contribute to resolution financing arrangements according to rules laid down by the Commission Delegated Regulation (EU) 2015/63. The only exception shall be institutions that started to be supervised in that particular year.
Strict reading of Article 14 of the Commission Delegated Regulation (EU) 2015/63 would lead to situations where an institution that did not exist / was not supervised in the reference year (two years back), would pay no contributions.On the other hand, in some specific cases, the contribution basis of an institution may be the same for two consecutive years. Moreover, putting together data of institutions from different years may create inconsistencies in calculation of e.g. risk weight.
Example:
Year 0 - institution does not exist
Year 1 - Institution start to be supervised
Year 2 - calculation of contributions, reference year Y0
Strict reading would result in 0 contribution of the institution in Y0.
Proposed solution takes (last YE available) audited data of the institution for Y1 as a basis for computations (however, mixing Y1 for the institution with Y0 basis of all others)
In Year 3, the calculation base of the institution in question would be the same as in Y2. - Submission date
- Final publishing date
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- Final answer
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Article 12(1) of Commission Delegated Regulation (EU) 2015/63 states that for these institutions, the contribution for the first months will be computed in the subsequent contribution period [Y2 according to the example above]. However, in the subsequent contribution period [Y2] the necessary data [presumably Y0 according to Article 14] might not be available either. In that case, Article 17(1) of Commission Delegated Regulation (EU) 2015/63 can be applied. In order to facilitate the use of estimates, institutions could provide the resolution authority with data from the budgeted balance sheet (which they have submitted to the competent authority in order to receive a banking licence) for Y1 and with any other relevant data that are not included in the budgeted balance sheet.
Disclaimer:
This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) 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
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Final Q&A
- Answer prepared by
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Answer prepared by the European Commission because it is a matter of interpretation of Union law.
- Note to Q&A
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Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.