Typically, institutions may sign subscription agreements whereby they express their intention to acquire units in CIUs. However, the actual obligation to subscribe the units is conditional upon the satisfaction of several conditions precedent—such as regulatory approvals or the achievement of certain fund-related thresholds—that are outside the institution’s control. As a result, at the moment of signing, the institution has limited or no discretion over the fulfillment of these conditions, and the obligation to fund the subscription does not yet arise. The institution is, however, upon verification of those conditions precedent (which verification is normally outside the institution's control), obliged to subscribe the units in the relevant CIU. 

In this context, clarification is sought on the interpretation of whether said subscription agreements should be treated as off-balance sheet commitments under Article 111(4) CRR. In particular:

• Can these agreements be considered “contractual arrangements offered by an institution, but not yet accepted by the client” as described in Article 111(4)?
• If so, would the fact that the obligation to subscribe is contingent on conditions outside the institution’s control affect the classification as a commitment for capital requirement purposes?