Question ID
2020_5122
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Other issues
Article
4
Paragraph
1
Subparagraph
27
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Not applicable
Type of submitter
Other
Subject matter
Group financing companies of non-financial company groups / definition of "financial sector entity" in Article 4 (1) (27) CRR
Question
Do group financing companies belonging to non-financial company groups (e.g. in the industrial sector) qualify as a "financial sector entity" according to Article 4 (1) (27) CRR?
Background on the question
Industrial companies that are structured as a group often use their own group financing companies to raise capital. The main purpose of these group financing companies is to issue international bonds (corporate bonds) and to provide funds exclusively to companies of the group. Apart from senior corporate bonds, these group financing companies do also issue subordinated corporate bonds. If these group financing companies were to qualify as a "financial sector entity" within the meaning of Article 4 (1) (27) CRR, the subordinated bonds would be regarded as capital instruments according to Article 62 (a) CRR (Tier 2) and - as a consequence - Article 66 CRR would require institutions to deduct the subordinated corporate bond from its own funds.
Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the issue it raises is beyond the remit of the Q&A process and as such it cannot be addressed via a Q&A.   

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Status
Rejected question