Article 429a(1) CRR is setting out the exemption rules for the calculation of a bank´s leverage ratio total exposure measure. More specifically, lit. j) points (i) to (iii) thereof state that exposures to public sector entities (PSE), treated in accordance with Article 116(4) CRR and arising from deposits that the institution is legally obliged to transfer to this PSE for the purpose of funding general interest investment, shall be excluded from the denominator calculation of the institution´s leverage ratio. 

Article 429a(1)(j) CRR states:

1. By way of derogation from Article 429(4), an institution may exclude any of the following exposures from its total exposure measure:

(j) exposures that meet all the following conditions:

(i) they are exposures to a public sector entity;

(ii) they are treated in accordance with Article 116(4);

(iii) they arise from deposits that the institution is legally obliged to transfer to the public sector entity referred to in point (i) for the purpose of funding general interest investments.

The meaning of points (i) and (ii) is unequivocally clear, however the interpretation of point (iii) is not entirely clear. The CRR does not contain any definition of “deposits” nor does it define the term "legal obligation" or give an example for "general interest investment".  Therefore, EBA guidance on the meaning of “deposits that the institution is legally obliged to transfer to the PSE referred to in point (i) for the purpose of funding general interest investments” is required.