Question ID:
2022_6501
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Credit risk
Article:
147
Paragraph:
8
Subparagraph:
b
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
n/a
Disclose name of institution / entity:
Yes
Name of institution / submitter:
SEB AB
Country of incorporation / residence:
Sweden
Type of submitter:
Credit institution
Subject Matter:
Specialised Lending - Interpretation of contractual arrangements that give the lender a substantial degree of control
Question:

How shall Article147 (8)(b) CRR be interpreted when identifying ‘contractual arrangements that give the lender a substantial degree of control over the assets and the income that they generate’ in the context of real estate financing?

Background on the question:

Article 147 (8) CRR outlines the conditions for the separate identification of corporate exposures as specialised lending exposures. While condition (a) and (c) of Art. 147 (8) CRR are generally uncontroversial, there is a perceived inconsistency in the interpretation of point (b) of Article  147 (8) CRR across jurisdictions and among competent authorities. Questions arise about what can be considered contractual arrangements that give the lender a substantial degree of control and to what extent the degree of control can be considered substantial where the exposure as such is not classified as being in default.

Date of submission:
30/06/2022
Published as Rejected Q&A
07/09/2022
Rationale for rejection:

This question has been rejected because the question is not sufficiently clear or has not sufficiently identified a provision of a legal framework covered by this tool that creates uncertainty and for which an explanation is merited in terms or practical implementation or application.

The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.

For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.

Status:
Rejected question
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