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
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.

Submission date
Rejected publishing date
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.

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Status
Rejected question