Question ID
2025_7580
Legal act
Directive 2014/59/EU (BRRD)
Topic
MREL
Article
45i
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2021/763 – ITS with regard to the supervisory reporting and public disclosure of MREL
Article/Paragraph
Annex II
Type of submitter
Resolution authority
Subject matter
Reporting of unused prior permission amounts with no specification of subordination
Question

How should banks report the unused prior permission amount in case the insolvency rank is not specified, and the unused prior permission amount exceeds the amount of eligible liabilities subordinated to excluded liabilities before the deduction of prior permission amounts (M02.00-r0100 to M02.00-r0130)? Furthermore, how should the unused prior permission amount be reported in cases where the subordinated layer only includes Tier 2 instruments, as T2 in phase-out is not covered by a general prior permission amount for eligible liabilities.

Background on the question

Commission Implementing Regulation 2024/1618, Annex II, Part II, 2.1.2 states

  • r0135: Where a general prior permission as referred to in point (ii) does not specify the ranking of the instruments that may be called, redeemed, repaid or repurchased, the full unused GPP amount shall be reported in this row.​
  • r0165: Where a general prior permission as referred to in point (ii) does not specify the ranking of the instruments that may be called, redeemed, repaid or repurchased, the full unused GPP amount shall be reported in row 0135, not in this row.​

For cases where the unused GPP amount (without any specification of insolvency ranking) is larger than the reported subordinated liabilities, the absolute value of r0135 can be larger than the total amount of subordinated eligible liabilities before GPP deductions (sum of M02.00-r0100 to M02.00-r0130). Moreover, validation rule v10761_m requires banks to report the total amount of subordinated eligible liabilities (r0090) as the sum of subtotals, which would be in breach, as the total amount of subordinated liabilities (r0090) is floored with 0 in the report.

Submission date
Status
Question under review
Answer prepared by
Answer prepared by the EBA.