Question ID
2024_7031
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Large exposures
Article
390
Paragraph
5
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Institutions shall add to the total exposure to a client the exposures arising from derivative contracts listed in Annex II and credit derivative contracts, where the contract was not directly entered into with that client but the underlying debt or equit
Type of submitter
Credit institution
Subject matter
Disclosure of exposures arising from Article 390 (5)
Question

How the exposures as per Article 390 (5) be reported in Corep templates C28 & C29 - direct vs indirect?

Background on the question

Article 390(5) provides requirements for exposures arising from derivative contracts listed in Annex II of the CRR and credit derivative contracts, where the contract was not directly entered into with that client but the underlying debt or equity instrument was issued by that client. This is further supplemented by EBA through COMMISSION DELEGATED REGULATION (EU) 2022/1011 of 10 March 2022 in accordance with Article 390(9), where EBA has called out the exposure as Indirect exposures arising from derivatives.

 

However, in accordance with Annex IX Instruction for Reporting on Large exposure and Concentration Risk, indirect exposure to be reported in Col 120-170 of C28 template and equivalent disclosure in template C29 is restricted only to exposures arising from requirements of Article 403 and it doesn’t cover Article 390(5). This is therefore leading to divergence in regulatory guidance.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the issue it deals with is already explained or addressed in Annex IX of the Instructions for reporting large exposures and concentration risk.

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