List of Q&As

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) as amended

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)

ID: 2013_119| Topic: Supervisory reporting - FINREP (incl. FB&NPE)| Date of submission: 06/08/2013

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) as amended

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

ID: 2013_42| Topic: Securitisation and Covered Bonds| Date of submission: 08/07/2013

Which institution is responsible to provide the remuneration data if a subsidiary has been sold?

Which institution is responsible to provide the remuneration data if a subsidiary has been sold?

Legal act: Directive 2013/36/EU (CRD) as amended

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

ID: 2013_41| Topic: Remuneration| Date of submission: 08/07/2013

Immovable property risk weights under the standardised approach (commercial)

Is the 50% standardised risk weight applicable to exposures fully and completely secured by mortgages on commercial property outside the Union?

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

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

ID: 2013_66| Topic: Credit risk| Date of submission: 16/07/2013

Application of the Discretion outlined in Article 99 (6) of the CRR to non-IFRS institutions

We wish to clarify whether, in exercising the discretion afforded to it in Article 99 (6) of the CRR, a competent authority may consult the EBA in order to extend the (new FINREP) reporting requirements outlined in Article 99 (2) to non-IFRS banks, but not to non-IFRS investment firms in its jurisdiction.

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

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)

ID: 2013_38| Topic: Supervisory reporting - Other| Date of submission: 05/07/2013

Immovable property risk weights under the standardised approach (residential)

Is the 35% standardised risk weight applicable to exposures fully and completely secured by mortgages on residential property outside the Union?

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

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

ID: 2013_65| Topic: Credit risk| Date of submission: 16/07/2013

Deferral of Tier 2 coupons

Can Tier 2 instruments include terms according to which coupons would be mandatorily deferred or cancelled if coupons were not paid on Additional Tier 1 instruments?

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

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

ID: 2013_21| Topic: Own funds| Date of submission: 03/07/2013

Local Regulations versus the CRR

Will national regulations, maintained by domestic regulators (such as those in the Capital Principal Circular (7/2012) of the Bank of Spain, as an example) which set requirements for Tier 1 instruments compatible with, but in excess of, those set in Regulation (EU) No 575/2013 (CRR) for Additional Tier 1 instruments, continue to have force after the date (1st Jan 2014) at which CRR itself comes into force?

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

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

ID: 2013_39| Topic: Own funds| Date of submission: 05/07/2013

Grandfathering of own funds instruments

Where an Additional Tier 1 (AT1) instrument qualified as original own funds according to Article 154(9) of Directive 2006/48/EC with the excess amount considered as part of the additional own funds, will the excess amount be included in the base used to calculate the cap for AT1 items during the transitional period under Regulation (EU) No 575/2013 (CRR)?

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

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

ID: 2013_17| Topic: Own funds| Date of submission: 03/07/2013

Applicability of Own Funds Reporting Requirements to Investment Firms Out of Scope

Should the reporting requirements of Regulation (EU) No 575/2013 (CRR) for institutions be interpreted to include reference to both investment firms and firms referred to in point (2)(c) of Article 4(1) that provide the investment services and activities listed in points (2) and (4) of Section A of Annex 1 to Directive 2004/39/EC that are excluded from the definition of investment firm, yet subject to Pillar 1 capital requirements under Article 95(2)?

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

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)

ID: 2013_37| Topic: Supervisory reporting - COREP (incl. IP Losses)| Date of submission: 05/07/2013

Retention bonuses

Is a “retention bonus”, i.e. a bonus solely granted for staying with a credit institution for a pre-defined time, still admissible in the light of remuneration principle Article 94(1)(e) of Directive 2013/36/EU (replacing Annex V, Section 11, point 23 (j) of Directive 2006/48/EC (CRDIII))?

Legal act: Directive 2013/36/EU (CRD) as amended

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

ID: 2013_10| Topic: Remuneration| Date of submission: 03/07/2013

Synthetic holdings

We are considering own regulatory capital instruments which are put in pledge to the issuing bank itself as collateral for loans to customers. 1) Do banks have to deduct those pledged own regulatory capital instruments under Regulation (EU) No 575/2013 (CRR) although the related loans are not granted for the purchase of these instruments (i.e. no direct funding), potentially as a synthetic holding (Article 4 (1) (126) of CRR? 2) Do such pledged regulatory capital instruments still meet the “paid up”-criterion (Article 28 (1)(b)) of CRR?

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

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

ID: 2013_9| Topic: Own funds| Date of submission: 03/07/2013

Grandfathering of own funds instruments

Is there any grandfathering applicable to instruments of state aid that are initially subscribed by the state but are then sold a) before 31 December 2017 and b) after that date?

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

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

ID: 2013_11| Topic: Own funds| Date of submission: 03/07/2013

Direct / indirect funding of own shares

In Article 3 of the draft RTS on Own Funds, what is the amount to be deducted / not to be considered eligible. If a subscription/acquisition of the institution's shares has been financed by it, what should be the impact and by which amount? There are two possibilities: A) The amount of the funding/loan granted is to be deducted from CET1 (irrespective of the current accounting value of the shares acquired). B) The "# of shares subscribed/acquired" times the "per share accounting amount of total equity" is not to be given recognition as a positive item of CET1 In case the instruments are not given recognition, what is the amount not to give recognition: A) Amount of the funding given to buy the shares (at the market value); or, B) Corresponding accounting amount of the shares bought (which is different from A if the book value is different from the market capitalization of the institution)? Example: An institution issues capital at par, i.e., book value per share = 100 and market value per share = 100. The share drops in price and is now valued at 80 (new market price). However, this market devaluation does not have a correspondence in the accounting value which remains at 100. The institution finances a customer to buy 2 shares, so finances with 160. Questions 1) Should the institution not recognize as a positive item: 160 (funding given to buy the 2 shares) or 200 (accounting value of the 2 shares whose purchase was financed by the institution) 2) In the example the credit to the issuer is higher than the stock financed and the share increases in value. What amount has to be considered? 3) In the example above, there is collateral posted. What amount has to be considered? Does the treatment change depending on whether the collateral is junior or senior to the delivery of the own shares? 4) In the example above, there is impairment associated with the funding provided (though this one is broadly covered in the article). What is the treatment when the funding provided is higher than the share bought)?

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

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

ID: 2013_8| Topic: Own funds| Date of submission: 03/07/2013

Applicable risk weights for agricultural properties.

Should exposures fully secured by agricultural properties be assigned a risk weight of 100% according to article 124 or can they be considered as residential or commercial properties according to article 125 and 126 and, thus, have a lower risk weight?

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

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

ID: 2013_94| Topic: Credit risk| Date of submission: 26/07/2013

Application of article 95 (2) of Regulation (EU) No 575/2013

Shall firms referred to in point (2)(c) of Article 4(1) of the CRR meet the requirements in Article 92(1) and (2) based on the total risk exposure amount referred to in Article 95(2) if they: - provide both the investment services and activities listed in points (2) and (4) of Section A of Annex I to Directive 2004/39/EC? or - provide one or both of the investment services and activities listed in points (2) and (4) of Section A of Annex I to Directive 2004/39/EC?

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

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

ID: 2013_76| Topic: Other topics| Date of submission: 26/07/2013

FINREP application date and report submission postponement to Q3 2014

The question regards answer to Question ID 2013_26 Does the answer then imply that reporting entities must have made the necessary arrangements by 1 Jan 2014 (given that this is the start of the accounting year of the reporting institution) for financial information to be reported cumulatively from 1 Jan 2014 to the first reference date of 30th September 2014?

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

COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)

ID: 2013_118| Topic: Supervisory reporting - FINREP (incl. FB&NPE)| Date of submission: 06/08/2013

Transitional provision for deferred tax assets that rely on future profitability

Article 478.2 of the CRR states "By way of derogation from paragraph 1, for the items referred in point (c) of Article 36(1) that existed prior to …, the applicable percentage for the purpose of point (c) of Article 469(1) shall fall within the following ranges" It is not clear to me what to read instead of "..." or how this date will be disclosed.

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

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

ID: 2013_67| Topic: Own funds| Date of submission: 18/07/2013

Definition of default in terms of days

Is it correct that the 180 day definition is only available for other purposes linked to the referenced defaulted loans under the standardised approach – but not for the 100% risk weight? Could this represent a discrimination of SA banks against IRB banks which might be allowed to apply a 180 day definition for the risk weight of defaulted residential/SME commercial/public sector loans under their internal rating systems?

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

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

ID: 2013_58| Topic: Credit risk| Date of submission: 12/07/2013

Definición de PYME - SME definition

¿Qué criterios debe reunir una empresa para considerarse que es "PyME"? Translation to EN: SMEs - What are the defining criteria?

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

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

ID: 2013_27| Topic: Credit risk| Date of submission: 05/07/2013