Question ID
2024_7253
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Other issues
Article
143
Paragraph
3
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 529/2014 - RTS on materiality of extensions and changes in the advanced approaches (IRB and AMA)
Article/Paragraph
4
Type of submitter
Consultancy firm
Subject matter
Requirement for approval for IRB-implementation of acquired portfolios
Question

May the acquisition of a portfolio of exposures, within the range of application of the IRB-system of an institution, be subject to requirement of approval due to triggering of the quantitative impact rule in (EU) 529/2014 article 4?

Background on the question

A client IRB bank acquired a portfolio from a “standard method bank” consisting of the exact same type of exposures covered by the IRB-application. This is not a material change to the IRB-approach, subject to sufficient documentation of comparability and representativeness (EU 529/2014 Annex 1, Part 1, Section 1, pkt. 1-c). The question is whether materiality could still be triggered by the quantitative impact rule, due to effects of the transition from the standard method to the IRB-method for the acquired portfolio? 

The competent authority is of the opinion that any acquired exposures will be subject to requirements for supervisory approval if the quantitative backstop is triggered, even if there is no doubt that the exposures are identical to exposures already covered by the IRB-system. This causes challenges for the institution because the CA and the institution do not agree on the timeline for the review process.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. 

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