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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

List of Q&A's

The OFR calculation are performed in local currency (reporting currency in the jurisdiction for the subsidiary) and then converted to EUR (group reporting currency) for consolidation

Under current (No FRTB) Own Funds Requirements (OFR) framework for Market Risk. A bank composed by a parent entity in Europe and a subsidiary in a third country.  With approved use of Internal Model Approach for all risk factors where no offsetting of positions is allowed between both entities (parent and subsidiary) and not permission described in article 325 of CRR granted. Some residual risks calculated under Standardized Approach. So, according with the IMA permission and TRIM guides, the OFR calculation for market risk at consolidated level is the addition of 4 elements: OFR under IMA for parent + OFR under IMA for subsidiary + OFR under SA for parent + OFR under SA for subsidiary. For the subsidiary, the OFR calculation are performed in local currency (reporting currency in that jurisdiction) and then converted to EUR (group reporting currency) for consolidation. The required Banking Book positions (i.e. FX and commodities) are capitalized for market risk under this schema. Is this calculation compliant with CRR (current version of OFR, not FRTB reporting and future OFR)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Meaning of ‘pure industrial holding company’ in the definition of financial institution.

How should the term ‘pure industrial holding company’ be understood in the context of the definition of ‘financial institution’ in accordance with article 4(1)(26) CRR? Would a holding company, the investments of which are exclusively outside of the financial sector, qualify as ‘purely industrial’ for the purposes of that definition?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Article 161(8) CRD

Has the EBA received a mandate from the Commission to explore whether Islamic financial sector entities are adequately covered by the CRD and the CRR? If so, has the EBA completed the report and provided a legislative proposal to the European Parliament and to the Council? If not, does the EBA have the authority to produce a report without a mandate from the Commission?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Treatment of repos and reverse repos with the same counterparty

How the unidentifiable collateral received and provided should be reported at LCR C74 and LCR C73 respectively? 

  • 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

Excess of cash as part of reverse repo transaction

How should excess of cash as part of reverse repo transaction be reported in LCR C74 template?

  • 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

Calculation of the capital requirements for structural FX risk

In the context of article 352.2, when there is an investment in a subsidiary denominated in foreign currency and this subsidiary has invested in other subsidiary denominated in the same foreign currency must this exposure be always exempted from capital requirements calculation? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2020/09 - Guidelines on the treatment of structural FX under Article 352(2) of CRR

Retail deposit - an established relationship criteria

For the purpose of article 24 paragraph 1(a) a retail deposit shall be considered to be part of an established relationship where the depositor meets at least one of the following criteria:  (a) has an active contractual relationship with the credit institution of at least 12 months duration;(b) has a borrowing relationship with the credit institution for residential loans or other long term loans;(c) has at least one other active product, other than a loan, with the credit institution.   Could you give an example what is considered to be 'one other active product, other than loan'?  Would it be correct to consider these products as 'one other active product, other than loan' to fulfill the crieteria c): credit card debt; hire purchase; financial lease ?

  • 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

Simultaniously use of the SME and infrastructure factor

Please see the existing question, which was not answered yet: 2020_5551

  • 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

application of credit conversion factor in accordance with article 235

How shall institution calculate risk-weighted exposure amounts for off-balance-sheet exposures with unfunded credit protection, to which those institutions apply the standardized approach? How shall credit conversion factor be applied to the formula specified in article 235 before the application of risk weight?

  • 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

Outflow of liquidity facilities provided to an SSPE

Based on article 31 (6) of the Delegated Regulation 2015/61 including amendments should the bank apply 10% outflow to an undrawn committed liquidity facility that has been provided to an SSPE for the purpose of enabling that SSPE to purchase mortgages from a financial customer?

  • 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

LCR treatment of a committed facility provided to multiple borrowers

What is the LCR treatment of a committed credit facility provided to multiple borrowers where:each individual borrower might draw the full (undrawn) amount of the committed credit facility;all borrowers belong to the same overarching group which, from group perspective, would qualify as a non-financial corporate; whileone or more of the individual borrowers might qualify as a financial customer under Article 411(1) CRR on a stand-alone basis.

  • 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

Internal hedges in the market risk thresholds computation

Should internal hedges be included in calculation of the size of institution's on- and off-balance-sheet business that is subject to market risk?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Application of large exposure rules towards companies designated as financial holding companies

Should exposures of a financial holding company (Company A) to a company that is not an institution or a financial institution and is not covered by prudential consolidation ("Company B") be included in the statement of large exposures on a prudential consolidated basis at the level of Company A, taking into account Company A is not an institution within the meaning of Art. 4, Para. 3 of Regulation 575/2013?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Retained collateralized issuances

Should assets used as collateral for retained issuances be treated as encumbered assets?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Definition of "Communication Standards" under Article 30.3

a) Is ISO 20022 considered the communication standard referenced in Article 30(3) of the Regulatory Technical Standards (RTS), Commission Delegated Regulation (EU) 2018/389? b) How should NCAs ensure that ASPSPs comply with these standards, in accordance with Article 30.6 of the RTS?

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

Clarification needed in dedicated Interfaces supervision

We seek clarification and insights into how competent authorities shall fulfill their responsibilities in line with Recital 23 and Article 32.2 of the Commission Delegated Regulation (EU) 2018/389, specifically regarding the supervision of payment initiation service's dedicated interfaces to ensure effective oversight and monitoring.

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

Third party access to account attributes

In Norway there is a widely used scheme by which payees send out invoices containing structured payment information which is being used by the payee to match incoming payments with invoices. The information is in the form of a number defined by the payee. The number consists of up to 25 digits, including a control digit. The information flows all the way through the payment chain and back to the payee. The credit account number must be set up with attributes associated with it, according to scheme rules, which are defined jointly by the banks. The payee has to enter into an agreement with its bank in order to make use of the scheme. There is a nationwide registry covering all banks, containing information about agreements, accounts and attributes associated with each account. The banks have direct access to the registry. As and when the PSU (Payment Service User) keys in the invoice information, the bank checks in real time that what is being keyed in is correct according to information held in the registry. There is check that indeed the credit account is set up for the scheme. A control digit is checked, increasing the likelihood of a correct number being entered. If no number is keyed in, the PSU is told so, if the account is such that a number is required. While keypunching, the PSU is being informed there and then if the information is wrong such that the PSU may correct it. The bank will not accept the payment order unless it is pre-verified to pass the controls. Not so for TPPs (Third Party Provider). They are not granted access to the registry. The TPP does not know if the payment order will pass the controls. Not until payment initiation there is a check. This check is being performed by the bank, not by the third party. The TPP receives information from the bank about the outcome of the check. TPPs must revert back to the PSU and / or the payee, or the banks, and try to resolve any issues. There are costs associated with follow up and correction. PSD2 Article 66 number 4 letter (c) obliges ASPSPs to treat payment orders transmitted through the services of a payment initiation service provider without any discrimination other than for objective reasons, in particular in terms of timing, priority or charges vis-à-vis payment orders transmitted directly by the payer. Not having access to the registry puts the TPPs at a disadvantage, with a bearing on timing, as payments may be delayed and may become overdue. The banks' own payment services have direct access to the key payment information held in the registry, whereas third party payment services do not. The FSA of Norway seeks advice on whether this constitutes a discrimination according to PSD2 Article 66. Not having access to the registry puts the TPPs at a disadvantage. It leads to extra work for TPPs and others involved in the payment. Additional costs are being incurred. The FSA of Norway seeks advice on whether not giving TPPs access to the registry creates obstacles for TPPs as per Commission delegated regulation (EU) 2018/389 Article 32 number 3. Lastly, the FSA of Norway seeks advice on whether there are other relevant provisions in the regulation, and whether the principle of "level playing field" may apply in this case.

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication

Direct and indirect applicability of DORA

Should a credit bureau apply DORA directly, similar to any other financial entity, as an Account Information Service Provider or AISP, or should the CRA apply DORA indirectly, as an ICT third-party provider?

  • Legal act: Directive 2022/2556/EU (DORA)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Services of credit bureaus under DORA

Do the services offered by credit bureaus fall within the definition of 'ICT services' as outlined in Article 3(21) of DORA? If so, can credit bureaus be considered as providers of ICT services under Article 3(19) of DORA?

  • Legal act: Directive 2022/2556/EU (DORA)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Definition of ICT services

Does the licensing of software by a third party to a financial entity for use on the financial entity's own premises meet the definition of "ICT services"

  • Legal act: Directive 2022/2556/EU (DORA)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable