List of Q&As

Scope of Prudential consolidation

Which is the applicability of Article 22 CRR for successive subsidiaries of a Significant Institution (SI) in the SSM and rest of EU, when the subsidiary in a third country as referred in Article 22 CRR is held by the subsidiary in the SSM or rest of the EU that is the last in the chain of the successive subsidiaries of the SI?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6454 | Topic: Other issues | Date of submission: 17/05/2022

Deduction of share buy-backs included in dividend policies as foreseeable dividends

If an institution has a distribution policy stating that a percentage of its profits will be paid out in form of share buy-backs, shall those be considered as foreseeable dividends and deducted in the context of inclusion of interim / year-end profits in CET1 capital (assuming that no permission under Article 77 CRR is granted for the share buy-back at the moment of the inclusion of the interim profits which would result in a deduction of amount of the share buy-back)?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions

ID: 2022_6411 | Topic: Own funds | Date of submission: 25/03/2022

Deduction of indirect holdings of own funds instruments in insurance and reinsurance undertakings which are subsidiaries of insurance holding company from own funds

Should indirect holdings of own funds instruments in insurance and reinsurance undertakings which are subsidiaries of insurance holding company be subject to the exemption provided for in Article 15a(2)(a) of Commission delegated regulation No 241/2014?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions

ID: 2022_6398 | Topic: Own funds | Date of submission: 14/03/2022

API functionality

Is it allowed to use a dedicated PSD2 interface by a TPP that identifies itself with an eIDAS certificate for purposes other than those specified in Article 30(1)(b) - (c) of the RTS on strong customer authentication (SCA) and secure communication?

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

ID: 2022_6392 | Topic: Strong customer authentication and common and secure communication (incl. access) | Date of submission: 10/03/2022

Paper-based postal money orders as defined by the Universal Postal Union

1. Should postal transfers as defined by the Universal Postal Union, which are not made in paper form but by electronic means, be excluded from the scope of PSD2?     2. If postal transfers, as defined by the Universal Postal Union, in both electronic and paper format, are inseparable from the postal operator’s accounting system, should also paper-based postal transfers not fall outside the scope of PSD2?     3. Should such transfers be excluded from the scope of PSD2 in either case, or agree that the payment institution is not entitled to credit those funds to the payment service customers’ funds accounts where the money of the payment service users is kept separate?     4. Can a payment institution that is also a postal service provider simultaneously provide both PSD2 regulated services and services related to payments but outside the scope of PSD2?

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6391 | Topic: Other topics | Date of submission: 09/03/2022

Definition of 'past due' for the purpose of the LCR

What is the definition of  'past due' for the purpose of calculation of liquidity inflows under Article 32(1) of Delegated Regulation (EU) 2015/61 in the LCR? Does the regulation allows for grace periods when determining monies due that are past due?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

ID: 2022_6386 | Topic: Liquidity risk | Date of submission: 25/02/2022

Articles 36 (1) f and 42 CRR regarding equity-settled share-based payments.

How should be treated shares that are bought and specifically affected to hedge equity-settled share-based payments (payments in equity instruments) ?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6379 | Topic: Own funds | Date of submission: 17/02/2022

Calculation of loss given default for fully off-balance exposures in case there are no additional drawings after the default date.

According to point 55 of Article 4(1) of Regulations (EU) No 575/2013 (CRR) ‘Loss given default’ or ‘LGD’ means the ratio of the loss on an exposure due to the default of a counterparty to the amount outstanding at default.   In case the exposure is fully-off balance at the moment of default and there are no additional drawings after default, both the numerator and the denominator of the LGD will be equal to zero. This means that the LGD cannot be calculate using the definition stated above. Should the realized LGD be set equal to zero in this case? 

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6376 | Topic: Credit risk | Date of submission: 16/02/2022

Calculation of amount outstanding at default and loss given default for products in scope of Article 166 (10) of Regulations (EU) No 575/2013 (CRR)

Article 181(1)(a) of Regulations (EU) No 575/2013 (CRR) specifies that LGDs shall be estimated on the basis of the average realized LGD by facility grade or pool using all observed defaults.   According to point 55 of Article 4(1) of Regulations (EU) No 575/2013 (CRR) ‘Loss given default’ or ‘LGD’ means the ratio of the loss on an exposure due to the default of a counterparty to the amount outstanding at default.   For the purpose of calculating the realized LGD, how should the amount outstanding at default (and the denominator of LGD) be calculated for exposures in scope of Article 166 (10) of Regulations (EU) No 575/2013 (CRR) that are fully off-balance at the moment of default?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6375 | Topic: Credit risk | Date of submission: 16/02/2022

Definition of private equity exposures in articles 155(2) and 155(3)

Do “private equity exposures in sufficiently diversified portfolios” eligible to a Risk Weight (RW) of 190% in simple risk weight approach in Article 155(2) and a PD of 65% in the PD/LGD approach in article 155(3) refer to any non-listed equity instrument and/or shares in a CIU or units in a CIU for which the underlying exposures are non-listed equity instruments, provided that they are part of a sufficiently diversified portfolio?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6369 | Topic: Credit risk | Date of submission: 11/02/2022

Exposure class for fair value changes of the hedged items in portfolio hedge of interest rate risk

To which exposure class the 'fair value changes of the hedged items in portfolio hedge of interest rate risk' (recorded in the IFRS consolidated financial statements in accordance with (IAS 39.89A(a); IFRS 9.6.5.8) have to be assigned?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6367 | Topic: Credit risk | Date of submission: 11/02/2022

Exclusion of cash withdrawal services from PSD2

If a provider offers cash ATM withdrawal services, not acting on behalf of one or more card issuers but rather through an agreement with the main payment circuits, shall this type of provision be considered exempt from the PSD2?  

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6360 | Topic: Other topics | Date of submission: 09/02/2022

Calculation of the CET1 deduction for non-performing exposures (NPEs)

Which date shall be used to determine the applicable factor that is used to calculate the amount determined in Article 47c(1)(a) CRR when the terms and conditions of a non-performing exposure, which was originated prior to 26 April 2019, have been modified by the institution in a way that increased the institution's exposure to the obligor and  the counterparty defaulted before the initial origination of the exposure? The date on which the counterparty initially defaulted or the date on which the exposure was initially originated or the date on which the terms and conditions of the NPE have been modified by the institution in a way that increased the institution's exposure to the obligor?     Additionally, which date is supposed to be considered if the default of the exposure/counterparty occurs after the initial date of origination of the exposure and before an increase in amount of exposure? The date of default or the modification date?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2022_6351 | Topic: Own funds | Date of submission: 02/02/2022

LCR treatment of deposits placed with other credit institutions

What is the LCR treatment of deposits placed with other credit institutions where the depositing credit institution neither reconciles with the deposit-receiving institution nor further examines the nature of the deposit?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

ID: 2022_6341 | Topic: Liquidity risk | Date of submission: 21/01/2022

CCF used for commitment performance bond

Which CCF must be applied to the undrawn/unissued amount if there is a commitment to a performance bond facility?

Legal act: Regulation (EU) No 575/2013 (CRR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2021_6327 | Topic: Credit risk | Date of submission: 23/12/2021

Authentication procedures that ASPSPs’ interfaces are required to support (using re-direction)

In a pure redirection-based approach, can an ASPSP, which is not offering a mobile web browser to its PSU’s, decide not to support  an authentication via a mobile web browser authentication page (no app-to-mobile web browser or mobile web browser-to-mobile web browser  redirection) for PISPs/AISPs on the basis of duly justified security risks, without being considered a breach of Article 97 (5) PSD2 and Article 30(2) of the RTS on SCA and CSC and/or an obstacle under Article 32(3) of the RTS on SCA and CSC?  

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

ID: 2021_6321 | Topic: Strong customer authentication and common and secure communication (incl. access) | Date of submission: 20/12/2021

PISP’s access to payable charges applied by the ASPSP on the PSU’s initiated payment via the ASPSP’s dedicated interface

Shall the account servicing payment service provider (ASPSP) make the transaction fees accessible to payment initiation service providers (PISPs) via the dedicated interface?

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

ID: 2021_6320 | Topic: Strong customer authentication and common and secure communication (incl. access) | Date of submission: 17/12/2021

Disclosures Relating to Trading and Non-Trading Book Clients

When firms calculate exposure value in line with K-TCD, firms carry it out at client level, taking the replacement cost and PFE for each client and each product.  Firms then net exposures against collateral in line with Article 31 of IFR.   Assuming that an appropriate netting agreement is in place with the client, available collateral is deducted to arrive an exposure value for each client. Where clients have both trading book and non-trading book exposures, and the netting agreement in place provides that the collateral held is fungible i.e. there is no particular collateral assigned to the trading book or non-trading book contracts or transactions, for the above reporting schedules a methodology to apply the collateral between trading book and non-trading book exposures is required.  

Legal act: Regulation (EU) 2019/2033 (IFR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2021_6319 | Topic: Supervisory Reporting (IFR) | Date of submission: 16/12/2021

Future-dated payments and recurring transactions

When it comes to recurring transactions and future-dated payments, would an implementation of the PSD2-interface that requires that the TPPs store the payment details until due date, and not until due date are allowed send the transactions to the ASPSP for execution, satisfy the requirements in Opinion on the implementation of the RTS on SCA and SCA (EBA-Op-2018-04) of June 13, 2018" paragraph 29, in cases where the ASPSP itself offers future-dated payments and recurring transactions in their mobile/web-bank application? If the answer to the preceeding question is yes, what then is the meaning of the statement "… a PISP has the right to initiate the same transactions that the ASPSP offers to its own PSUs, such as … recurring transactions, … and future-dated payments"?

Legal act: Directive 2015/2366/EU (PSD2)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

ID: 2021_6318 | Topic: Strong customer authentication and common and secure communication (incl. access) | Date of submission: 16/12/2021

Scope of COH definition under IFR

Are pure intermediation transactions processed in name give-up taken into account in the K-COH calculations?

Legal act: Regulation (EU) 2019/2033 (IFR)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2021_6316 | Topic: K-factor requirements | Date of submission: 16/12/2021