Does the exemption from the requirement to deduct holdings of own funds instruments under Article 49(3) of the CRR also apply with regard to the deductions set out in Article 72e(5)?

Regulation (EU) 2022/2036 inter alia introduced Article 72e(5) into Regulation (EU) No 575/2013 (CRR), which requires intermediate entities within a resolution group to fully deduct from their stock of internal MREL eligible resources their holdings of internal MREL eligible instruments issued by entities that are not themselves resolution entities and which belong to the same resolution group.

According to Article 72e(5), fourth subparagraph, of the CRR, holdings of own funds instruments fall within the scope of that new deduction approach. At the same time, Article 49, paragraphs 2 and 3, of the CRR contain certain exemptions from the requirement to deduct own funds holdings within a banking group and within an institutional protection scheme, respectively.

While Regulation (EU) 2022/2036 amended Article 49(2) of the CRR to clarify that the exemption set out in that provision does not apply with regard to the deductions set out in Article 72e(5), no such amendment was introduced for the purposes of Article 49(3) of the CRR.

Regulation (EU) 2022/2036 inter alia introduced Article 72e(5) into Regulation (EU) No 575/2013 (CRR), which requires intermediate entities within a resolution group to fully deduct from their stock of internal MREL eligible resources their holdings of internal MREL eligible instruments issued by entities that are not themselves resolution entities and which belong to the same resolution group.

According to Article 72e(5), fourth subparagraph, of the CRR, holdings of own funds instruments fall within the scope of that new deduction approach. At the same time, Article 49, paragraphs 2 and 3, of the CRR contain certain exemptions from the requirement to deduct own funds holdings within a banking group and within an institutional protection scheme, respectively.

While Regulation (EU) 2022/2036 amended Article 49(2) of the CRR to clarify that the exemption set out in that provision does not apply with regard to the deductions set out in Article 72e(5), no such amendment was introduced for the purposes of Article 49(3) of the CRR.

Against this background, clarification is sought on whether or not the exemption from the requirement to deduct holdings of own funds instruments under Article 49(3) of the CRR also applies with regard to the deductions set out in Article 72e(5) of the CRR.