Following Q&A 6576 we conclude that the deduction will only be applied to:

• M02.00 row 0140 (Eligible liabilities not subordinated to excluded liabilities) according to Q&A 2022_6651, in case that General Prior Permission is granted by the Board on Structured Notes and Senior Preferred Liabilities (Q&A 6651 states that in case the institution specifies in its application the respective amounts of the different layers of eligible liabilities it intends to subject to the prior permission, the deduction should take place on a corresponding amount for each layer affected)
• row 0010 (own funds and eligible liabilities)
• row 0060 (eligible liabilities)
• row 070 (eligible liabilities items before adjustments)
• row 0400 ('free CET1') of template M 02.00
• Accordingly, the Bank would appreciate to further guidance on the preferable feeding criteria among the two following options:OPTION A: no deductions are applied to M02.00 row 0150 nor to M02.00 row 0160 (detailing the amount reported in row 0140), but the deduction is only applied to row 140: this entails that the sum of rows 0150 and 0160 would differ from the total amount in row 0140
• OPTION B: give that the deduction is only applied to non grandfathered eligible liabilities reported in row 0150, the deduction is applied to both rows 0150 and 0140: this entails that the sum of rows 0150 and 0160 would differ from the total amount in row 0140
• M01.00row 0200 (own funds and eligible liabilities)
• row 0210 (own funds and subordinated liabilities)
• row 0300 to 0330 (ratios)
• Moreover, the Bank interprets that: although not explicitly specified in EBA Q&A 2022_6576, rows M01.00 from 0250 to 0290 (Other Bail-inable Liabilities) shall include the amount of unused prior permission, as specified by new instructions published by EBA (Unused prior permission amounts, to the extent that the permission covers an eligible liabilities instrument, shall be considered other bail-inable liabilities for the purposes of these rows [0250 – 0290] )
• the amount of unused prior permission should be applied solely in rows 0250 Other bailinable liabilities and 0280 Residual maturity of < 1 year since the unused amount of prior permission would be applicable to instruments with residual maturity of < 1 year (instruments with residual maturity of > 1 year are not part of Other Bail-inable liabilities as they are MREL eligible liabilities)

According to paragraph 3 of Article 32b of the EBA Final Report on the Draft Regulatory Technical Standards on own funds and eligible liabilities amending Delegated Regulation (EU) No 241/2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions (“draft EBA RTS”), in the case of a general prior permission (“GPP”) referred to in the second subparagraph of Article 78a(1) of Regulation (EU) No 575/2013 (“CRR”), the predetermined amount for which the resolution authority has given its permission should be deducted from the institution’s eligible liabilities instruments from the moment the authorisation is granted. The same applies for ad hoc permissions under paragraph 2 of Article 32b of the draft EBA RTS, where the actions listed in Article 77(2) of the CRR are expected to take place with sufficient certainty, and once the prior permission of the resolution authority has been obtained.

Regulation (EU) 2021/763 was adopted before the development of the said draft EBA RTS and, therefore, does not account for the deduction rules framed in Article 32b, paragraphs 2 and 3 of the draft EBA RTS. For this reason, according to the CIR instructions, the amounts of eligible liabilities to be reported in several data fields in MREL_TLAC reporting templates annexed to the same Regulation do not reflect the deductions that reporting entities should perform following the granting of prior permissions (if any). As a consequence, the MREL_TLAC reporting templates of Regulation (EU) 2021/763 to be submitted to resolution authorities for monitoring MREL compliance purposes would give to the receiving authorities an inaccurate picture of the MREL and TLAC capacity and composition of the reporting entities.