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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.

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List of Q&A's

Mandatory substitution approach according to Article 403 CRR when applying either the Financial Collateral Comprehensive Method (FCCM) or, in the case of securities financing transactions (SFTs) the Internal Model Method (IMM) or master netting agreements to calculate the exposure value.

Question 1: Has the mandatory substitution approach according to Article 403 CRR to be applied when an institution uses the FCCM? If yes, what is the amount that the institution shall assign to the protection provider/collateral issuer? Question 2: In the case of exposures arising from SFTs referred to in Article 401(2) second paragraph CRR, has the mandatory substitution approach according to Article 403 CRR to be applied when an institution applies master netting agreements, together with either the FCCM or IMM as referred to in Articles 220 CRR and 221 CRR? If yes, what is the exposure amount that shall be assigned to the collateral issuer? Question 3: Also regarding exposures arising from SFTs, has the mandatory substitution approach according to Article 403 CRR to be applied when an institution applies IMM as referred to in Section 6 of Chapter 6 of Title II of Part Three CRR? If yes, what is the exposure amount that shall be assigned to the collateral issuer? Question 4: Does an institution have to use a credit risk mitigation technique for large exposure purposes when it has used it for calculating own funds requirements, or can an institution renounce, for large exposure purposes, applying a credit risk mitigation that it has used for calculating own funds requirements? Question 5: Does an institution also have to apply the substitution approach, for large exposure purposes, in those cases where the collateral is not taken into account for calculating own funds requirements?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5496
  • Topic: Large exposures
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Irrevocability of a payment order initiated by a PISP

The EBA Opinion on the implementation of the RTS on SCA and CSC (EBA-Op-2018-04) contains a Table entitled “Main requirements for dedicated interfaces and API initiatives” and Row 9 refers to the possibility of “cancelling an initiated transaction in accordance with PSD2, including recurring transactions”. Please clarify that these requirements will not apply to single payment transactions initiated by Payment Initiation Service Providers (PISPs) for immediate execution?

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_4095
  • Topic: Strong customer authentication and common and secure communication (incl. access)
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Treatment of CIUs in internal model for market risk – own funds requirement (add-on)

Has the add-on for specific risk for CIUs according to Art. 364 (2) lit. a) in any case to be calculated for CIUs which are included in an internal model for market risk using a different approach than those described in Art. 350 (1) or 350 (2) (e.g. based on the liquid price of the CIU)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_4380
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Definition of an electronic remote payment transaction

What are the demarcation criteria of the term „remote payment transaction“, which is an essential term in the RTS on SCA and CSC?

  • 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
  • ID: 2019_4594
  • Topic: Strong customer authentication and common and secure communication (incl. access)
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Wholly or partially owned by a public authority requirement and bail-in

Article 40 of Directive 2014/59/EU (BRRD) requires that the bridge institution is wholly or partially owned by public authorities (including the resolution fund) and that it is controlled by the resolution authority. How is this ownership requirement compatible with Article 43(2)(b)(ii) BRRD?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2341
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Scope - Limited network exclusion

Is there a geographical limitation with regard to a limited network of service providers?

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4604
  • Topic: Authorisation and registration
  • Date of submission:
  • Published as final Q&A: 21/01/2022

More than one transaction from a single consumer initiated transaction

When a consumer elects to add an additional item to their purchase at the time of checkout (a cross sale) they are making two purchases from two different merchants in a single session. Is SCA required for both of these transactions? This would make the user experience very clumsy and awkward as the consumer would have to go through SCA twice in a row during a single checkout.

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4776
  • Topic: Strong customer authentication and common and secure communication (incl. access)
  • Date of submission:
  • Published as final Q&A: 21/01/2022

SCA for staff assisted electronic channel

Please clarify where a customer is physically present and identified in branch, the strong customer authentication (SCA) requirements if that customer completes a Standing Order instruction (Setup, Amend or Cancel) or initiates a credit transfer through a staff assisted electronic channel (i.e. tablet device)?

  • 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
  • ID: 2020_5124
  • Topic: Strong customer authentication and common and secure communication (incl. access)
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Rights over or in relation to assets, rights and liabilities transferred

According to Articles 38 (13), 40 (11) and 42 (12) of Directive 2014/59/EU (BRRD), parties whose assets, rights and liabilities are not transferred, shall not have any rights over or in relation to the assets, rights and liabilities that are transferred. What is the rationale of these provisions?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2338
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

MREL subordination for smaller banks

Is the subordination requirement for the MREL of smaller banks (i.e. that are not G-SII or part of a G-SII, top tier banks nor banks subject to Article 45c(6)) subject to the limit of the prudential formula referred to in Article 45b(7)? Does the reference to 8% of total liabilities, including own funds, represent a cap, or does this provision include the possibility of full subordination for MREL? Are the conditions referred to in Articles 45b(7) and (8) applicable to smaller banks?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4983
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Authorisation of the purchaser of a (bridge) institution in another Member State

Article 38(11) of Directive 2014/59/EU (BRRD) (and similarly, Article 40(9) BRRD as to the bridge institution tool) provides that, for the purposes of the rights to provide services or to establish itself in another Member State, the purchaser or the bridge institution shall be considered to be a continuation of the institution under resolution and may exercise any such right that was exercised by the institution under resolution in respect to the rights, assets, and liabilities transferred?Does Article 38(11) BRRD exempt the purchaser or the bridge institution from obtaining the authorisation to operate in another Member State by way of derogation to Article 38(7) BRRD? 

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2334
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Meaning of “rate of conversion that severely dilutes existing holdings of shares or other instruments of ownership”

What is the exact meaning of “rate of conversion that severely dilutes existing holdings of shares or other instruments of ownership” in Article 47(1) of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3212
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Sequence of bail-in and write down of capital

Are Articles 48 and 60 of Directive 2014/59/EU (BRRD) as well as Article 21 of Regulation (EU) No 806/2014 (SRM) conflicting with Articles 47 BRRD?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3210
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Reimbursement of resolution expenses via sale of the asset management vehicle

Is it possible to implement a power in national legislation to pay the resolution expenses out of the proceeds of the sale of the asset management vehicle?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2333
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Responsibility to pay expenses

Article 37(7) of Directive 2014/59/EU (BRRD) provides that the resolution authority may recover the reasonable expenses incurred in resolution from the institution under resolution in a number of ways. May Member States further provide that those costs are to be paid upfront by the institution under resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2332
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Particular wording used in Articles 45h(5)

Is the meaning of the wording used in Articles 45h(5), second subparagraph of Directive 2014/59/EU (BRRD) ("the resolution authorities responsible for subsidiaries on an individual basis") the same as the wording "resolution authorities of the subsidiaries" used in other articles of BRRD?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3208
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Winding up or liquidation of residual entity

Does the residual entity have to be always liquidated or wound up in accordance with Article 37(6) of Directive 2014/59/EU (BRRD)? Does this provision impose a mandatory obligation?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2331
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Instruments representing interests in shares or other instruments of ownership

Do separately transferable rights fall under the definition of instruments of ownership as defined in Article 2(1)(61) of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2717
  • Topic: Other topics
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Transfer of assets, rights and liabilities to the bridge institution / asset management vehicle

Why do Articles 40(11) and 42(12) of Directive 2014/59/EU (BRRD) explicitly exclude the liability of, respectively, the bridge institution’s and asset management vehicle’s management body or senior management vis-à-vis shareholders, creditors of the institution under resolution and other third parties whose assets, rights or liabilities are not transferred, whilst such exclusion is not provided for in Article 38(13) BRRD, when the resolution tool applied is the sale of assets?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2316
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Clarification of “access to critical functions”

How should “access to critical functions” in Article 41 (2) of Directive 2014/59/EU (BRRD) be interpreted?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2312
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022