It is assumed that the financial product in question is connected to the exchange of goods and/or services. It has a maturity not exceeding one year (i.e. typically less than one year or a maximum of year) and is repeatedly extended by another 365 days unless the bank makes use of its contractual right to unilaterally terminate the product (“the termination right”) and sends a termination notice prior to any extension. The question is whether the termination right prior to any extension is sufficient such that the product meets the definition of “financial products of fixed short-term maturity, generally of less than one year, without automatic rollover“ and therefore qualifies as trade finance. The CRR does not further specify the term “automatic rollover”. In our view, the product qualifies as trade finance due to the existence of the termination right. 

Classifying this product as trade finance and hence “without automatic rollover” due to the presence of the termination right is consistent to previous EBA guidance in the context of termination options. For example, EBA Q&A 2014_883 states that a termination right reduces the remaining residual maturity in the context of an exposure without a contractual maturity. In addition, EBA Q&A 2013_687 states that a prolongation decision of the bank does not increase the maturity.