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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

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List of Q&A's

Scope of calculation of own funds requirements for CVA risk

Can you provide some details on what criteria and/or thresholds are likely to apply in order to determine that securities financing transactions are material in the context of article 382(2)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_130
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Information to be declared under the concept of "discretionary pension benefits" in the annex of EBA/GL/2012/5 and in annex 2 of EBA/GL/2012/4

(1) What is the information to be declared by institutions under the concept of “total discretionary pension benefits” established in the annex 1  of EBA/GL/2014/07? A. Contributions made, during the year, by the credit institution to the company’s pension scheme, on behalf of the employee as part of their variable remuneration, or B. Amounts to be paid, or already satisfied, by the credit institution to the employees who have left the institution or got retired during the year. (2) What is the information to be declared by institutions under the concept of “total discretionary pension benefits” established in the annex 2 of EBA/GL/2014/08? A. Contributions made, during the year, by the credit institution to the company’s pension scheme, on behalf of the employee as part of their variable remuneration, or B. Amounts to be paid, or already satisfied, by the credit institution to the employees who have left the institution or retired during the year.  

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_103
  • Topic: Remuneration
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Exclusion of provisioned counterparties from the CVA capital charge

Could you confirm that a defaulted or doubtful counterparty that is subject to specific provisions/cost of risk shall not be subject to the CVA capital charge?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_99
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Grandfathering on own funds instruments

What will be the treatment of the "phased-out" amounts which exceed the applicable percentages according to Article 486 (5)) of grandfathered Additional Tier 1 instruments which are non-eligible due to an incentive to redeem (accord. to Art 489) or a coupon pusher (accord. to Art 53 (a)), during the grandfathering period (accord. to Art. 486 (5)). Will the phased-out amounts flow into grandfathered Tier 2 amounts (subject to applicable limits) or will they lose their regulatory recognition completely (i.e. are these amounts entirely eliminated from regulatory own funds)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_56
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Grandfathering of Non-Step Tier 1 instruments

A Tier 1 instrument, with no incentive to redeem, was issued prior to 31 December 2011, and, at the time of issue, was not callable for 5 years. It reaches its first call date in May 2014, and is callable quarterly thereafter. It is not called at its first call date. It does not meet all of the requirements as T1 capital under Article 52. Subject to grandfathering limits, does the instrument continue to count as Tier 1 capital? If it does not count toward Tier 1, would it count as Tier 2?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_52
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Treatment of non-step Tier 1 hybrids post grandfathering

This query concerns “non-innovative” (i.e. non step) hybrid Tier 1 instruments that fully qualified as original own funds which are now callable every quarter, which do not meet the requirements of Article 52 but are eligible for grandfathering under Article 484 of Regulation (EU) No. 575/2013 (CRR). Once they cease to be eligible (in part or in full) as AT1 due to the grandfathering limits, is the de-recognised amount eligible as Tier 2?"

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_40
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Grandfathering of capital instruments

This question concerns two types of non-innovative Hybrid Tier 1 instruments (both issued before 31 December 2011): -- Type A: securities with first call date occurred in year 5, and before 31 December 2012; -- Type B: securities with first call date occurred in year 5, and after 31 December 2012. Questions: 1. For both A and B, is it correct to follow Article 484(4) & Article 486(3) for grandfathering guidelines? 2. For both A and B, is it correct to assume that the amount in excess of the applicable Tier 1 grandfathering percentage limit will be treated as grandfathered Tier 2 capital, i.e. being subject to the Tier 2 cap, as per Article 487(2)? 3. Alternatively, for both A and B, can the amount in excess of the applicable Tier 1 grandfathering percentage limit be treated as Tier 2 in full from 1 January 2014? Since they are meeting all the criteria for Tier 2 capital under Regulation (EU) No. 575/2013, as per Article 63 post the call date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_28
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Grandfathering of Tier 1 instruments

In your response to the following question "What will be the treatment of an Additional Tier 1 (AT1) instrument structured with a first call date and one step up after 5 years prior to 1 January 2013, callable quarterly thereafter at every interest payment date without any step up (subject to supervisory approval)? Is the instrument eligible for grandfathering if not called at the first call date? If the instrument is derecognized as AT1 on 1 January 2013, can it be included into Tier 2 and, if so, what amount will be eligible (full amount or gradually phased out amount)?”, you mention that: "because in particular of the quarterly call, the instrument would not meet the eligibility criteria for inclusion in fully eligible Tier 2 capital. It would also not meet the eligibility criteria for inclusion in grandfathered Tier 2 capital as foreseen under Article 484 (5) of Regulation (EU) No 575/2013." Does that mean that an existing non-innovative (i.e. non-step) Tier 1 instrument with quarterly calls will also not be grandfathered in Tier 2 capital because of the quarterly calls?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_31
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 15/11/2013

First reporting date / reporting period

Given that the application date of Directive 2013/36/EU (CRD) / Regulation (EU) No 575/2013 (CRR) has now changed from 1 January 2014 to 31 December 2013 (see Directive 2013/36/EU, Article 162, Paragraph 1), what is the first reporting date / reporting period, specifically for the LCR and NSFR returns (Regulation (EU) No 575/2013, Part Six, Title II and Title III, respectively), but also for other returns such as COREP? Supplementary question: If the first reporting date is 31 December 2013, i.e. the first reporting period for the LCR return, for example, is December 2013, this would mean that most of the reporting period lies outside the application date of the legal provisions (CRD and CRR) underpinning the reporting. Do you see any legal complications in this fact?"

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2013_25
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as final Q&A: 15/11/2013

Own funds: Value adjustments for prudent valuation (Additional Value Adjustments)

Article 34 of Regulation (EU) No 575/2013 (CRR) requires institutions to deduct from CET1 the amount of any additional value adjustments on all assets measured at fair value calculated in accordance with a prudent valuation of these assets based on the provisions specified in Article 105 of CRR. In this context, paragraph 14 of Article 105 of CRR specifies that EBA shall submit draft regulatory technical standards (RTS) to the Commission by 28 July 2013 (as per CRR corrigendum published on 2 August 2013). In this regard the EBA published a draft consultation paper (EBA/CP/2013/28) whereby it is specified that "as a consequence of the EBA decision to conduct a QIS, the EBA currently envisages to finalise the technical standard in Q2 2014". On 7 October 2013 the EBA published revised deadlines for the delivery of the technical standards to the European Commission; in particular it is specified that the revised deadline for the submission of the RTS on prudent valuation (Article 105(14) CRR) has been postponed to 1 June 2014. Therefore it is not clear as concerns the first reporting date on Q12014 whether institutions must: 1) not apply the prudential filter (i.e. the relative reporting item shall be valued zero) until the publication of the final EBA RTS 2) calculate the prudential filter in accordance with the Basel II framework (i.e. requirements for prudent valuation defined by each local regulator) 3) calculate the prudential filter in accordance with the draft EBA standards as defined in consultation paper EBA/CP/2013/28

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_359
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Operational risk

Article 95 (3) in Regulation (EU) No 575/2013 (CRR) has a reference to Title VII, Chapter 3, Section II, Sub-section 1 of Directive 2013/36/EU. From reviewing Directive 2013/36/EU (CRD) there are no sub-sections of the above mentioned Section II. Section II which starts with Article 119 regards Financial holding companies etc. In light of this the reference to the CRD in Article 95 (3) of the CRR does not seem to be correct, could the EBA please provide guidance?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_358
  • Topic: Operational risk
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Artikel 115 (3) Zuordnung von Religiongemeinschaften zu Forderungsklasse/ Attribution of religious communities to an exposure class

Was ist mit der Aussage im 3. Satz gemeint: In diesem Fall gilt Absatz 2 nicht..." ? English translation: What does the statement ‘In this case, paragraph 2 shall not apply…’ in Article 115(3) mean?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_327
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Use of Core Market Participants Rule

This question regards the use of the Core Market Participants rule (Article 227 of Regulation (EU) No 575/2013 (CRR)) in the context of Master Netting Agreements with Own Estimates of Volatility (Article 220). The rule detailed under Article 227 of CRR specifically excludes only the Internal Models Approach for Master Netting Agreements (Article 221), and is consistent with the Basel II text (June 2006) in which paragraph 170 excludes the same approach in paragraphs 178-181. However, paragraph 177 of the June 2006 text provides for repo-style transactions under master netting agreements to have haircuts calculated in accordance with paragraphs 147-172, inclusive of the core market participant rules. This is in contrast to the CRR, where article 220(1) is only inclusive of the volatility adjustments detailed in Articles 223-226, thereby excluding the core market participant rule. The question is whether this exclusion in the final CRR was intentional or an oversight.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_269
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Notifications of agents and subagents of credit institutions in the European Economic Area (EEA)

1) Is it allowed for a credit institution to provide money remittance services via agent cross-border in the EEA? 2) Do agents have to be notified to the home-/host authority and if so under which directive? 3) Do agents have to be notified by way of freedom of establishment or by way of freedom to provide services? 4) Are agents to be treated as branches? 5) Is it allowed for an agent of a credit institution which provides money remittance services cross-border in the EEA to use subagents? If yes: a) Does a sub-agent have to be notified? b) On which legal basis? c) To which Authority? d) Does the credit institution or the agent provide notification and, if so, freedom of establishment or by way of freedom to provide services?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_190
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Capital charge for credit derivatives in the banking book in the position of protection seller

In Regulation (EU) No 575/2013 (CRR) we assume that for credit derivatives in the banking book in the position of protection seller the present capital charge is calculated only for credit risk with respect to the underlying and no extra capital charge for counterparty credit risk after CRR is needed. Do you agree?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2013_387
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/11/2013

Treatment of Upper Tier 2 instruments under CRR

Can existing Upper Tier 2 instruments with a provision such as "the institution has the right to defer the payment of interest because the institution has not paid dividends on ordinary shares (Core Equity Tier 1 – CET1) and on hybrid instruments (Additional Tier 1 – AT1)" qualify as fully eligible Tier 2 instruments under Regulation (EU) No 575/2013 (CRR)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_54
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/10/2013

Applicability of the re-securitisation definition to securitisation positions being subject to tranched credit protection according to Article 264(1) of Regulation (EU) No 575/2013 (CRR)

Do the portions of a securitisation position covered and uncovered by senior unfunded credit protection have to be treated as re-securitisation positions in accordance with Article 4(64) of Regulation (EU) No 575/2013 (CRR) for the purposes of determining the risk-weighted exposure amounts of these portions in accordance with Article 249(1) of Regulation (EU) No 575/2013 as amended by Regulation (EU) 2017/2401 and for other regulatory purposes?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_53
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as final Q&A: 31/10/2013

FINREP: Requirement to submit financial information

If a credit institution prepares consolidated accounts - under IFRS - for Statutory Reporting and is a non public company, and the subsidiary company's activities (a non-credit institution) are below the thresholds mentioned in Article 19 (a) and (b) of the Regulation (EU) No 575/2013 (CRR), can you confirm that it will not be mandatory for the credit institution to submit Financial Information (FINREP), effective from January 1st 2014?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2013_119
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 31/10/2013

Preferential risk weight of covered bonds containing securitisation positions of sovereign exposures as cover pool assets

Would UCITS compliant covered bonds containing public sector securitisation exposures qualify for preferential risk weights under Article 129 of Regulation (EU) No 575/2013 (CRR)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_42
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as final Q&A: 31/10/2013