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    EC Deems Korea as Equivalent in Relation to Certain CRR Provisions

    December 18, 2019

    EC published the Implementing Decision (EU) 2019/2166 on the inclusion of Serbia and South Korea in the lists of third countries and territories whose supervisory and regulatory requirements are considered equivalent for the purposes of the treatment of exposures in accordance with the Capital Requirements Regulation or CRR (EU Regulation No 575/2013). Decision 2019/2166 is amending the Implementing Decision 2014/908/EU. Decision 2019/2166 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

    EC conducted assessments of the supervisory and regulatory arrangements applicable to credit institutions in third countries and territories. These assessments have enabled EC to establish whether or not those arrangements are equivalent for the purposes of determining how to treat the relevant categories of exposures in Articles 107, 114, 115, 116, and 142 of CRR. In its assessments, EC has considered the evolution of the supervisory and regulatory arrangements of Serbia and South Korea since the adoption of Implementing Decision (EU) 2019/536 and taken into account available sources of information, including the assessment made by EBA. The assessment by EBA recommended that the supervisory and regulatory frameworks applicable to credit institutions in these third countries should be considered as equivalent to the Union legal framework for the purposes of Articles 107(3), 114(7), 115(4), 116(5), and Article 142 (2) of CRR.

    EC concluded that Serbia and South Korea have in place supervisory and regulatory arrangements that comply with a series of operational, organizational, and supervisory standards that are at least equivalent to the essential elements of supervisory and regulatory arrangements applicable to credit institutions in Union. Therefore, it is appropriate to consider that the supervisory and regulatory requirements applied to credit institutions in Serbia and South Korea are at least equivalent to those applied in the Union. The Implementing Decision 2014/908/EU, therefore, has been amended to include Serbia and South Korea in the relevant lists of third countries and territories whose supervisory and regulatory requirements are considered equivalent to the regime of the Union. Thus, Annexes I, IV, and V of Decision 2014/908/EU have been replaced by the text set out in Annexes I, II, and III of Decision 2019/2166, respectively.

    The lists of third countries and territories considered to be equivalent for the purposes of the relevant provisions of CRR are not exhaustive. EC, with the assistance of EBA, will continue to regularly monitor the evolution of supervisory and regulatory arrangements of third countries and territories with a view to updating, as appropriate and at least every five years, the lists of third countries and territories set out in the Implementing Decision 2014/908/EU taking account of developments in supervisory and regulatory arrangements, in the Union and at global level and in light of the new available sources of relevant information.

     

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    Effective Date: January 07, 2020

    Keywords: Europe, Asia Pacific, Serbia, South Korea, Banking, CRR, Equivalence, Third Country, Decision 2019/2166, Regulatory Capital, Basel III, EC

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