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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.

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List of Q&A's

Recognition of contractual netting of legal entities of a group

Could you please specify whether the last subparagraph of Article 295 of CRR ("Netting across transactions entered into by different legal entities of a group shall not be recognised for the purposes of calculating the own funds requirements."), which applies to all three types of contractual netting agreements from point (a) to (c), does not allow recognition of netting for the purposes of calculating the own funds requirements between two members of the same banking group generally (even on a bilateral basis) or netting other than on a bilateral basis between two members of the same banking group?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2004
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 25/09/2015

QRRE loss rate

What is meant by loss rate in this context?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1933
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 25/09/2015

Asset Encumbrance & Covered Bonds

Are assets in cover pools that are not necessary to fulfil regulatory requirements deemed to be encumbered for Parts A, B, C and E of the Asset Encumbrance Reporting templates?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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: 2015_1817
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as final Q&A: 25/09/2015

PD substitution and eligibility of guarantors

Article 202(d) of Regulation (EU) No 575/2013 (CRR) suggests that where risk weighted exposure amounts are calculated under the IRB Approach, a guarantor must have an internal rating in order to be eligible as a guarantor for PD substitution. Can a guarantor, which is rated by an ECAI, and otherwise meets all eligibility requirements but is treated under the Standardised Approach by the institution, be used for PD substitution? How can a guarantee be recognised in this situation?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1381
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 04/09/2015

Is operational leasing included in annex 1 to Directive 2013/36/EU and shall it be included in a consolidated situation?

Shall companies that have operational leasing as activity be seen as a financial institution in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (“The Regulation”) and should it be included in a consolidated situation?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1644
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 28/08/2015

Initial margin for the purpose of hypothetical capital calculation

What amount should be used as the initial margin posted by to the Central Counterparty (CCP) by a clearing member for the purpose of Article 50a of Regulation (EU) No 648/2012 (EMIR), introduced by Article 520 of Regulation (EU) No 575/2013 (CRR)? Does the Article 50b(c) of the EMIR apply to the initial margin? Should the excess initial margin be included?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1889
  • Topic: Market infrastructures
  • Date of submission:
  • Published as final Q&A: 21/08/2015

Validation Rules v0677_m, v0678_m and v0726_m for Leverage Ratio

Are the following validation rules for leverage ratio reporting despite the Delegated Regulation (EU) 2015/62 still applicable? v0677_m {C 43.00.a, r010,c010} = sum({C 45.00.a, c030, (r060-090)}) v0678_m sum({C 43.00.a, c010, (r040-060)}) = sum({C 45.00.a, c030, (r010-050)}) v0726_m {C 45.00.a, r100,c030} = {C 43.00.a, r070,c010} + sum({C 43.00.b, c010, (r080-090, r140, r180-190, r210, r230, r280-290)}) + sum({C 43.00.c, c020, (r080-090, r140, r180-190, r210, r230, r280-290)})

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/62 - DR with regard to the leverage ratio
  • ID: 2015_1899
  • Topic: Supervisory reporting - Leverage ratio
  • Date of submission:
  • Published as final Q&A: 14/08/2015

Related party balances

Given that there is no specific guidance for where to classify Related Party balances in several templates eg 1.1, 1.2, 2.0, should Related Party balances be classifed on the nature of the underlying balance or transaction, e.g. Related Parties Loans and Advances within Loans and Advances?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2014_999
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 31/07/2015

LCR inflows/outflows for collateralised stock borrow/lend transactions within 30 day window

The LCR reporting templates for Outflows (C52) and Inflows (C53) do not include a section which allows firms to separate reverse-repo and other secured lending/borrowing transactions between those where collateral is re-hypothecated and those where collateral is not re-hypothecated, to cover the reporting institutions outright short positions. How should firms with matched book, fully collateralised stock borrow/stock lend transactions (which mature within 30 days) segregate these transactions from unmatched repo/reverse-repo transactions? The Basel III templates allow a 0% outflow/inflow in such cases (lines 289-295 and 264 of the Basel III implementation monitoring workbook), when the transaction matures in less than 30 days.

  • 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: 2014_987
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as final Q&A: 31/07/2015

Reporting of Additions (c010) and Reversals (c020) in Table 16.7

In Table 16.7, Additions (010) and Reversals (c020) of impairment on financial and non-financial assets is required to be reported. In accordance with ITS 2. 102, “Additions” shall be reported when, for the accounting portfolio or main category of assets, the estimation of the impairment for the period results in recognition of net expenses. “Reversals” shall be reported when, for the ac-counting portfolio or main category of assets, the estimation of the impairment for the period result in the recognition of net income. We interpret the rule above as the additions and reversals (columns 010 and 020 re-spectively) shall be reported NET, NOT gross (for the accounting portfolio or main category of assets). This means that, if the net of the asset impairment for the period is positive (net income) it should be listed as a reversal, and, if negative (net expense), it should be listed as additions. Does it imply, for example for T 16,7 row 030 (Available-for-sale financial assets), if for all available for sale fin assets held by the reporting entity, the impairments for the period exceeded reversals, only net impairment (net of reversals) are to be recorded (and the reversals will be reported blank)? Or is the netting rule only applicable to a sub-portfolio of assets within Available-for-sale financial assets class (e.g. municipal bonds). If the netting rule is applicable for an entire fin asset class group (e.g. Available-for-sale financial assets), the reporting in table 16,7 should equal to the reporting in Table 2, row 480. Please clarify.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2014_975
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 31/07/2015

Client money

To what extent the cash held by a UCITS can be qualified as client money?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1825
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Powers of the temporary administrator

Could you please clarify the interaction between Recital 39 and the last sentence of Article 29 (2) of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2109
  • Topic: Early intervention
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Provision of IGFS under Article 23

Would a prohibition on the institution or the holding company receiving financial support under an IGFS agreement that does not meet the conditions in Article 23 of Directive 2014/59/EU (BRRD) be a satisfactory implementation of that Article?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2106
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Authorisation to breach large exposures requirements in the context of IGFS

How do national legislators transpose Article 23 (1) (h) of Directive 2014/59/EU (BRRD) in accordance with the CRR and the CRD IV?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2105
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Institution or entity in Article 19 (3) (a)

Can you please clarify if the provision Article 19 (3) (a) refers to the institution or to the entity?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2103
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Intra-Group Financial Support to subsidiaries in third countries

In case participation in Intra-Group Financial Support agreements by ”subsidiaries in third countries” is already allowed in national law, does Article 19 (1) of Directive 2014/59/EU (BRRD) still have be explicitly implemented?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2102
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Contents of group resolution plans

Are the contents of group resolution plans listed in Article 12 (3) of Directive 2014/59/EU (BRRD) to be considered in addition to the contents of solo resolution plans set out in Article 10 (7) of the same Directive?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2098
  • Topic: Resolution plans
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Usage of Multiple Point of Entry (MPE) and Single Point of Entry (SPE) in resolution plans (scenarios)

Should the suggested resolution plans assume both the possibility of usage of Multiple Point of Entry (MPE) and Single Point of Entry (SPE) strategies depending on different scenarios and causes of failure or should they clearly identify a preferred strategy and elaborate only on the different resolution tools within this strategy?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2016/1075 - DR on the content of recovery and resolution plans, financial support, independent valuers, contractual recognition of write down and conversion powers, notices of suspension and resolution colleges
  • ID: 2015_2096
  • Topic: Resolution plans
  • Date of submission:
  • Published as final Q&A: 24/07/2015

Group recovery plans with regard to non-EU subsidiaries

Does the requirement to draw up a group recovery plan as established in Article 7 (1) of Directive 2014/59/EU (BRRD) also cover non-EU subsidiaries?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2092
  • Topic: Recovery plans
  • Date of submission:
  • Published as final Q&A: 24/07/2015