Seniority is not specified in some CDS instruments. Could we consider them as Senior Unsecured?
Some CDS instruments such as AXA CDS or AVIVA do not specify seniority.
The submitter should report the Instruments in the Annex 5, credit spread instrument following market convention, when not specified otherwise, therefore the submitter should consider them as senior Unsecured. The submitter should mention this in the explanatory document, as required by the letter “j” and “k” of the instruction of Annex 5. (quoting letter “k”: “In the case that a bank is required to make additional assumptions beyond those specified here that it believes are relevant to the interpretation of its exercise results […], it should submit a description of those specifications in a separate explanatory document to be delivered to the Competent Authority accompanying the results.”).
The present Q&A on Supervisory reporting is provisional. It will be reviewed after the Implementing Regulation is in force and published in the Official Journal. The text of the Implementing Regulation may differ from the text of the draft ITS to which this Q&A refers.