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

    APRA Plans to Assess Climate Risks and Develop Prudential Guidance

    APRA published a letter that outlines its plans to undertake a climate change vulnerability assessment and develop a prudential practice guide focused on climate-related financial risks.

    February 24, 2020 WebPage Regulatory News
    News

    APRA to Transition to Annual Stress Testing of Large Banks in 2020

    APRA published key findings of the stress testing assessment conducted on authorized deposit-taking institutions.

    February 21, 2020 WebPage Regulatory News
    News

    IAIS Statement on Monitoring Period of Insurance Capital Standard

    IAIS published a statement from its Secretary General Jonathan Dixon on the Insurance Capital Standard (ICS) monitoring period.

    February 21, 2020 WebPage Regulatory News
    News

    EC Consults on Review of Non-Financial Reporting Directive

    EC is launched a consultation on the review of the Non-Financial Reporting Directive or NFRD (Directive 2014/95/EU, as part of its strategy to strengthen sustainable investment in Europe.

    February 20, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Standards for Supervisory Reporting Under PEPP Rule

    EIOPA is consulting on the implementing technical standards for supervisory reporting and cooperation, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation (Regulation 2019/1238).

    February 20, 2020 WebPage Regulatory News
    News

    ECB Report on Transfer of Liquidity from EONIA Products to €STR

    ECB published a report on the transfer of liquidity from the cash and derivatives products of the Euro Overnight Index Average (EONIA) to the Euro Short-Term Rate (€STR).

    February 19, 2020 WebPage Regulatory News
    News

    ESRB Publishes Report on Systemic Cyberattacks

    ESRB published a report that explores systemic implications of cyber incidents, such as cyberattacks.

    February 19, 2020 WebPage Regulatory News
    News

    FSB Chair Sets Out Key Deliverables for G20 Presidency of Saudi Arabia

    FSB published a letter from the Chair Randal K. Quarles to the G20 finance ministers and Central Bank governors ahead of the meetings in Riyadh on February 22-23.

    February 19, 2020 WebPage Regulatory News
    News

    CFTC Proposes Rules on Derivative Position Limits and Swap Execution

    CFTC approved a proposed rule on position limits for derivatives and a proposed rule amending requirements for certain Swap Execution Facilities and real-time reporting.

    February 19, 2020 WebPage Regulatory News
    News

    BIS Appoints Heads of Innovation Hubs in Singapore and Switzerland

    BIS announced key personnel appointments to the Innovation Hubs in Singapore and Switzerland.

    February 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4717