Featured Product

    SRB Extends Permissions Procedure for Eligible Liabilities Instruments

    December 18, 2019

    SRB is extending prior permission procedure to assess applications to reduce eligible liabilities instruments under Article 78a of the Capital Requirements Regulation (CRR). This procedure will remain in place until the relevant regulatory technical standards of EBA come into force. Article 78 of the CRR addresses supervisory permission for reducing own funds. As per this article, a competent authority shall grant permission for an institution to reduce, repurchase, call, or redeem common equity tier 1, additional tier 1 or tier 2 instruments where certain predefined conditions have been met. To continue performing market-making and other secondary market activities as of January 01, 2020, banks must obtain a prior permission.

    To cover the period until the EBA regulatory standards come into force, SRB confirms and extends the conditions published on June 25, 2019 in the CRR addendum to the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) policy of SRB:

    • The aggregate trading volume in these activities does not exceed 1% Total Risk Exposure Amount (TREA) on a consolidated basis at the level of the resolution group
    • Any MREL shortfall, or increase thereof, resulting from these market-making activities is compensated with eligible liabilities instruments on a quarterly basis

    EBA is mandated under Article 78a (3) of CRR to draft regulatory technical standards specifying the process for prior permissions, including the time limits and information requirements. Until this Level 2 Regulation comes into application, the following provisional procedure applies:

    • Scope of instruments. At this stage, SRB considers that the permission regime applies to eligible liabilities instruments as defined in Article 72b of CRR.
    • Time-limit for applications. Institutions shall transmit a complete application to SRB at least four months in advance of the date where one of the actions listed in Article 78a of CRR (hereafter: “Redemption”) is intended to be performed.


    Related Links

    Keywords: Europe, EU, Banking, MREL, CRR, Basel III, Regulatory Capital, SRB

    Featured Experts
    Related Articles
    News

    FED Revises Capital Planning and Stress Testing Requirements for Banks

    FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.

    January 19, 2021 WebPage Regulatory News
    News

    ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020

    ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.

    January 19, 2021 WebPage Regulatory News
    News

    ESAs Publish Reporting Templates for Financial Conglomerates

    ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.

    January 18, 2021 WebPage Regulatory News
    News

    EBA Publishes Report on Asset Encumbrance of Banks in EU

    EBA published the annual report on asset encumbrance of banks in EU.

    January 18, 2021 WebPage Regulatory News
    News

    MAS Revises Guidelines on Technology Risk Management

    MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.

    January 18, 2021 WebPage Regulatory News
    News

    US Agencies Publish Updates for Call Reports, FFIEC 101, and FR Y-9C

    FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.

    January 15, 2021 WebPage Regulatory News
    News

    EBA Proposes Guidelines for Establishing Intermediate Parent Entities

    EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.

    January 15, 2021 WebPage Regulatory News
    News

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6462