December 13, 2017

EC published the Commission Delegated Regulation, or CDR, (EU) 2017/2295 laying out regulatory technical standards for disclosure of encumbered and unencumbered assets. CDR (EU) 2017/2295 supplements Capital Requirements Regulation (CRR)—that is, Regulation (EU) No 575/2013. CDR (EU) 2017/2295 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union and Article 2 of the regulation shall apply from January 02, 2019.

CDR (EU) 2017/2295 specifies the requirements for disclosing the amount of encumbered and unencumbered assets for the institutions covered in this regulation. Annexes to this regulation contain disclosure templates for encumbered and unencumbered assets (Annex 1), along with instructions (Annex 2). Article 1 of the regulation specifies the following:

  • Institutions shall disclose the amount of encumbered and unencumbered assets under the applicable accounting framework by asset type in columns C010, C040, C060, and C090 of Template A of Annex I, in accordance with the instructions in Annex II.
  • Institutions shall disclose information on collateral received by asset type in columns C010 and C040 of Template B of Annex I, in accordance with the instructions in Annex II.
  • Institutions shall disclose the liabilities associated with encumbered assets and collateral received as set out in Template C of Annex I, in accordance with the instructions in Annex II.
  • Institutions shall disclose narrative information relating to the impact of their business model on their level of encumbrance and the importance of encumbrance in their business model as set out in Template D of Annex I, in accordance with the instructions in Annex II.

To ensure the proportionate application of the disclosure requirements set out in Article 443 of CRR to the smaller institutions that do not have material levels of asset encumbrance, information on the quality of encumbered and unencumbered assets should not be required from such smaller institutions. This regulation is based on the draft regulatory technical standards submitted by EBA to EC. EBA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analyzed the potential related costs and benefits, and requested the opinion of the Banking Stakeholder Group, established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council.

 

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Effective Date: January 02, 2018

Keywords: Europe, EU, Banking, Encumbered and Unencumbered Assets, Reporting, Disclosures, CRR, EC