- Question ID
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Large exposures
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Type of submitter
- Subject matter
"Unexpected outflow" in the context of applying large exposure exemptions granted in Article 390(6)(c) CRR
Are the exposures created between service providers, which are caused by clients signing up to new products outside of business hours, an “unexpected outflow” in the context of applying the exemptions granted in Article 390(6)(c) of the Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 (CRR2)?
- Background on the question
New technologies allow modern financial service providers to allow automated customer onboarding with minimal manual input. This means that onboarding can occur 24/7 (subjecting to the need for manual intervention triggered by controls). It also means that customers who have previously completed the “know your customer” (KYC) can agree to sign up to new products, including with different service providers, 24/7. To the extent that this involves a customer who holds an account with one company signing up to a new set of account based services with another, this can result in an out of hours transfer of funds. This leads to situations where exposure increases not because of traditional payment transactions, but because, for example, customers have onboarded to a new service provider and have elected to transfer all or part of their balance there, and that transfer is to be settled in net between the two companies. This is an issue for us where a customer of our electronic money institution signs up to be a customer of our bank overnight, for example.
- Submission date
- Final publishing date
- Final answer
Exposures caused by signing up to new payment services providers by clients outside of business hours and not lasting longer than the following business day fall under the exemption granted in Article 390(6)(c), of Regulation (EU) No 575/2013.
The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.
- Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.