Question ID
2021_6031
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Own funds
Article
77
Paragraph
1
Subparagraph
b
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
Article/Paragraph
28/1
Type of submitter
Competent authority
Subject matter
Reduction, distribution and reclassification of share premium accounts related to own funds instruments
Question

May an institution announce to the holders of own funds instruments the reduction, distribution or reclassification of related share premium accounts before that institution has obtained the prior permission of the competent authority foreseen under Article 77(1)(b) CRR?

Background on the question

Article 28(1) of Commission Delegated Regulation 241/2014 (RTS) prevents an institution to announce the ‘’redemptions, reductions and repurchases of own funds instruments’’ to the holders of the instruments before the institution has obtained the prior permission of the competent authority.

Reg. (EU) 2019/876 amended Article 77(1)(b) CRR and Article 78(1) CRR in order to, among others, add express reference to the reduction, distribution and reclassification of share premium accounts related to own funds instruments.

Given that Article 28(1) RTS has not been amended by adding, alongside own funds instruments, express reference to related share premium accounts, it is therefore not clear whether Article 28(1) RTS is equally applicable to the reduction, distribution and reclassification of share premium accounts related to own funds instruments under Article 77(1)(b) CRR.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the objective of the Q&A tool is not to answer questions that would require a modification of the legal framework  in order to address the question (see the draft RTS technical standards on own funds and eligible liabilities - not yet adopted). 

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.

For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.

Status
Rejected question