Question ID:
2014_752
Legal Act:
Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 – CRR2
Topic:
Leverage ratio
Article:
Article 9 of CRR
COM Delegated or Implementing Acts/RTS/ITS/GLs:
Draft ITS on Supervisory Reporting of Institutions
Article/Paragraph:
Cross Form Validation Rules
Name of institution / submitter:
Central Bank of Ireland
Country of incorporation / residence:
Ireland
Type of submitter:
Competent authority
Subject Matter:
Scope of Waiver for Amended Solo Consolidation and Impact on Supervisory Reporting
Question:
Article 9 of Regulation (EU) No 575/2013 (CRR) for the ‘Individual consolidation method’ refers directly to Article 6(1) in terms of the discretion for competent authorities to allow institutions to include certain non-authorised subsidiaries in the scope of their individual returns. In this regard, can we confirm if the 'amended solo' waiver is also available for the Leverage Ratio given that it does not fall under the scope of Article 6(1) i.e. there is no reference to Part Seven of the CRR?
Background on the question:
Article 9 of the CRR for the ‘Individual consolidation method’ refers directly to Article 6(1) in terms of the discretion for competent authorities to allow institutions to include certain non-authorised subsidiaries in the scope of their individual returns. In this regard, the current wording of Article 6(1) implies that the amended solo waiver is not available for the Leverage Ratio as it does not fall under the scope of Article 6(1) i.e. there is no reference to Part Seven of the CRR. The wording used in Article 6(5) of the CRR implies that institutions should report the Leverage Ratio on a pure individual basis only, unless they have a derogation under Article 7. If this is the case, then some of the ‘cross form validations’ that exist between the COREP CA/Credit Risk templates and the Leverage Ratio templates will probably fail for institutions that have received permission for amended solo consolidation under Article 9 because the COREP CA/Credit Risk Templates will be reported at amended solo level (i.e. including some non-authorised subsidiaries) and the Leverage Ratio return will be reported at pure solo level (i.e. excluding any non-authorised subsidiaries).
Date of submission:
21/01/2014
Published as Final Q&A:
10/10/2014
EBA Answer:

The 'amended solo' waiver provided for in Article 9 CRR is not available for the Leverage Ratio given that the Leverage Ratio does not fall under the scope of Article 6(1) Regulation (EU) No 575/2013 (CRR).

Amending the current text of Article 9 CRR to allow an "individual consolidation" for the purpose of the Leverage Ratio so as to ensure an alignment of the level of application between the Own Funds requirements of Part Two and the Leverage Ratio requirements of Part Seven is not envisaged at this stage.  The Commission will consider any necessary changes to the levels of application of CRR requirements in its forthcoming Report to the European Parliament and the Council, due under Article 508(1) CRR.

Any inconsistencies in the reporting validation rules can be addressed by EBA, which could modify the validation rules on cross form validation between the Leverage Ratio reporting templates and the COREP templates, as appropriate. 

DISCLAIMER:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Internal Market and Services) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status:
Final Q&A