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List of Q&A's

Extent of real time transaction monitoring expected when executing and processing payments.

Article 13(1)(d) of Directive (EU) 2015/849 sets out the on-going monitoring obligation of obliged entities.  This includes the 'scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the obliged entity's knowledge of the customer, the business and risk profile, including where necessary the source of funds'.  However, the said Directive does not set out whether or the extent to which the scrutiny of transactions is to take place in real time or post the execution of transactions.  This is of particular relevance within the ambit of payment service providers given that these same service providers are also subject to timelines for the execution and processing of payment transactions.  To what extent, if at all, do Competent Authorities require payment service providers, including credit institutions that are providing payment services, to carry out real time transaction monitoring? If this is a requirement, do Competent Authorities also require real time transaction monitoring in case of transactions involving high amounts? If Competent Authorities do not require real time transaction monitoring, what is the justification for this position?

  • Legal act: Directive (EU) 2015/849 (AMLD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6723
  • Topic: Customer Due Diligence
  • Date of submission:
  • Published as Rejected Q&A: 12/01/2024

CVA hedges in the calculation of UCS

When calculating Unearned Credit Spread (UCS) is it allowed to include CVA hedges as well?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6922
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

on demand and short notice vs. other term loans

Should matured loans with contractually fixed maturities, loans that matures at reporting date or at the next business day after the reporting date and canceled loans be reported as "on demand and short notice" product or as "other term loans" product as they were reported prior the maturity/cancelation? Should contractual (original) maturity or residual maturity be taken into account when determining "on demand and short notice" product? Can the type of product change during the lifetime of the loan? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2023_6955
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

ESG P3 - Template 1, 5 and 7 disclosure of subsidiaries, joint venture and associates

Does Equity instruments to be reported in Pillar 3 ESG tables include also investment in subsidiaries, joint ventures and associates?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2022/2453 - ITS on ESG disclosures
  • ID: 2023_6952
  • Topic: Transparency and Pillar 3
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Template 4 - Exposures to top 20 carbon-intensive firms

Could you please provide a single list to identify the top 20 most carbon-intensive firms?If not possible, can you define the criteria to be considered to identify the top 20 most carbon-intensive firms? For instance: sector of the counterparty, emissions scope considered (1, 2, 3)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2022/2453 - ITS on ESG disclosures
  • ID: 2023_6942
  • Topic: Transparency and Pillar 3
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Weighted average repricing date

In the "ITS ON SUPERVISORY REPORTING FOR IRRBB" is mentioned that the institution has to report the "weighted average repricing date" in J 08.00 and J 09.00: Relevant parameters. Can you please clarify what kind of figure is expected? Does the institutuions has to fill in a date e.g. '30.09.2029' or a number e.g. '5' for five years?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6914
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Unregistered Partnerships and Sole Traders classification in accordance with the Counterparty Breakdown outlined in FINREP Reporting

Against the indicated background we would like to request feedback on whether all counterparty breakdowns in FINREP may refer to the BSI Regulation, or whether such reference is only for non-financial corporations. Moreover, we would like to query whether ‘Unregistered Partnerships’ and ‘Sole-Traders’  whether in this case the purpose of loan has any impact on the selected FINREP counterparty classification?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2023_6905
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

FINREP - Validation rules EBA_v12089 on F18.0

When we sent our Finrep 2022-12, the warning EBA_v12089 was triggered on the ITS F18.00, line 0335

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6902
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Translation of functional currency into presentational currency in FINREP

What exchange rate should be utilised by the entities with a functional currency other than Euro when translating their accounts into EUR for the purpose of FINREP reporting?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6895
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Semi-annual reporting on the total amount of exposures to infrastructure project entities acc. to Art 501a (3)

Is the reporting on exposures to infrastructure project entities acc. to Art. 501a (3) covered by the existing CoRep forms? If not, in which form, granularity and ways institutions should report on the semi-annual basis on those exposures? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6846
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Template 3 / Maturity of alignment targets

Template 3 requires information that is different from what banks have committed to disclose under their voluntary net zero commitments (for EU banks which are NZBA signatories): sectors are different, banks can use other benchmark net zero scenarios than the IEA NZE2050 and targets are due every 5 years under NZBA (vs. 3 years rolling at every reporting period in the ITS). Are new shorter-term targets expected to be set within the 5-year target period, or can banks report what they have indeed committed to through NZBA?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/637 - ITS with regard to disclosures of information referred to in Titles II and III of Part Eight CRR
  • ID: 2023_6844
  • Topic: Transparency and Pillar 3
  • Date of submission:
  • Published as Rejected Q&A: 22/12/2023

Inaccurate Measurement of the threshold “total annual gross revenue from investment services and activities of the investment firm” in the ITS on reporting for Investment Firms.

Is it correct that the calculation of the threshold “total annual gross revenue” in row 0110 of template I 05.00 of Annex II of the commission implementing regulation (EU) 2021/2284 includes the revenues stemming from the MiFID Ancillary Services listed in rows 0230 to 0290 even though the corresponding definition of this threshold in article 12 (1) (i) of the IFR is explicitly referring to “total annual gross revenue from investment services and activities of the investment firm” and therefore doesn’t include any revenues stemming from such ancillary services?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/2284 - ITS on Reporting
  • ID: 2023_6697
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as Rejected Q&A: 19/12/2023

Exposures to a third-country credit institution located in United Kingdom

Can you please advise if United Kindgom, as a former member of EU, benefit from a special treatment with regards to article 107, paragraph 3 from Regulation 575/2013 (CRR) ? In addition, for branches located in UK of EU or third-countries credit institutions listed as equivalent, do they need to be considered as UK credit institutions anyway ?    

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6892
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 15/12/2023

Adjustment of risk-weighted non-defaulted SME exposures

Should the RWEA to which the adjustment shall be made under CRR Article 501 constitute the total RWEA for credit risk determined in accordance with Part Three, Title II, Chapter 2 or 3 that relates to non-defaulted credit exposures defined in 501 p 2 - regardless if the RWEA stems from the standardized approach, the IRB approach or any national measures impacting the credit risk RWEA?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6909
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 15/12/2023

Calculating exposure value to assign risk weight to defaulted items having balance and off-balance sheet part

When calculating a coverage of SCRA to unsecured part of the exposure that has both balance and off-balance sheet part, in order to determine risk weight of  150% or 100%, shall an institution calculate the exposure value according to Article 111 point 1 of the CRR (i.e. for off-balance sheet part after applying credit conversion factor (CCF))?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6889
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 15/12/2023

reporting a negative value in C32.01, row 0120, column 0010

In Annex II to Regulation (EU) 2021/451, chapter 6.1.2 referring to template C 32.01, about the row 0120, it ‘s clearly stated that the “this row shall correspond to row 0250 of template F 01.01 of Annexes III and IV to this Implementing Regulation.”. In the FINREP template, the fair-value can be fed with a negative value. It is also stated for row 0010-0210 : "The definitions of these categories shall match those of the corresponding rows of FINREP templates 1.1 and 1.2" Conversely, in the definition of the column 0010, "Absolute value of fair-valued assets and liabilities, as stated in the financial statements under the applicable accounting framework, as referred to in Article 4(1) of Delegated Regulation (EU) 2016/101, before any exclusion in accordance with Article 4(2) of Delegated Regulation (EU) 2016/101."  In the case we have a negative fair-value in the row 0250 of template F01.01, is that negative value may be report in the C32.01, row 0120, column 0010 ? If not, what value should be reported ?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6906
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 01/11/2023

ALMM - C 70.00 : Report of weekends in template C70

Should entities leave empty weekends and holidays in column ‘Overnight’ even when they have information on current accounts for those days?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6824
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as Rejected Q&A: 01/11/2023

Treatment of derivative positions in the event of counterparty default

Should the outflows from derivative transactions be taken into account in the calculation of the LCR ratio, when the counterparty is in default?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
  • ID: 2023_6858
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 23/10/2023

Validation rule eba_v09286_m

Relating the data entered in the upper part of template R04, the purpose of the v09286_m control is to verify that the total variable remuneration of all high earners is less than or equal to twice the total fixed remuneration by country and by pay bracket. The equation of the control is {r0100} <= 2 * {r0060}. However, the control does not take into account some points, including the following: -    The variable remuneration of {r0100} may include amounts awarded to high earners that are not identified staff; -    The severance payments included in the total variable remuneration of {r0100} amount may not be subject to the bonus cap mentioned above. Indeed, it is specified in the R04 template that the amounts relating additional information requested in the lower part of the report ({r0181} to {r0270}) should also be included in the total variable remuneration or in the total fixed remuneration of the upper part of the same template ({r0100} and {r0060} respectively). In that respect, variable and fixed remuneration of high earners that are not identified staff from {r0260} and {r0270} are included in {r0100} and {r0060} respectively, and severance payments from {r0200} awarded to high earners who are identified or not identified staff are included in {r0100}. As a consequence the equation {r0100} <= 2 * {r0060} may not be respected. Should the v09286_m control be disabled ?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6900
  • Topic: Remuneration
  • Date of submission:
  • Published as Rejected Q&A: 16/10/2023