EBA Launches Consultation on Disclosure and Reporting of MREL and TLAC
EBA is consulting on the draft implementing technical standard on disclosure and reporting of the minimum requirement for own funds and eligible liabilities (MREL) and total loss absorbency requirement (TLAC). The draft standard follows an integrated approach and is aligned with disclosure standards under the Basel Pillar 3. The draft standard includes proposals for templates and tables implementing the TLAC and MREL disclosures and reporting requirements. In addition to the implementing technical standards, the consultation paper includes two recommended reporting templates covering the forecast of MREL and TLAC positions and funding structures, along with a mapping of the disclosure and reporting requirements. The consultation period ends on February 22, 2020.
MREL and TLAC are integrated for both the reporting and the disclosure templates, with both reporting and disclosure requirements being enshrined in a single set of implementing technical standards. This integrated approach aims to optimize efficiency by institutions when complying with the disclosure and reporting obligations, to facilitate the use of information by authorities and market participants, and to promote market discipline. The consultation paper presents proposals implementing the disclosure and reporting requirements on both MREL and TLAC in accordance with mandates included in the revised Capital Requirements Regulation (CRR 2) and the revised Bank Recovery and Resolution Directive (BRRD 2). The annexes to the consultation paper include the following information:
- Reporting templates (Annex 1) and instructions (Annex 2) on MREL and TLAC
- Data point model and validation rules (Annex 3)
- Reporting on MREL and TLAC related to standardized ranking (Annex 4)
- Disclosure templates (Annex 5) and associated instructions (Annex 6) on MREL and TLAC
- Reporting templates and instructions covering forecast of MREL and TLAC (Annexes 7 and 8, respectively)
This consultation paper is one of the deliverables presented in the EBA roadmap on risk-reduction measures package, which explains the Pillar 3 strategy of EBA to implement a comprehensive disclosure framework. The aim of this implementation is to become the EU-wide Pillar 3 hub and to facilitate the EBA pathway for a more efficient and proportionate supervisory reporting. EBA is expected to submit the final draft technical standard to EC in June 2020. With regard to the reporting requirements, EBA will develop data point model, XBRL taxonomy, and validation rules based on the final draft technical standard, which are likely to be published in the third quarter of 2020.
The provisions of this technical standard on the disclosure on TLAC are envisaged to apply immediately after its entry into force and adoption by EC. However, provisions on the MREL disclosure will apply from the date of the expiration of transition periods, pursuant to Article 45m of BRRD—that is, from January 01, 2024 or, where the resolution authority set a compliance deadline after January 01, 2024, from that compliance deadline. The first reference date for reporting in accordance with these technical standards is foreseen to be June 30, 2021, both for reporting on the MREL and the TLAC requirements. The expected implementation period for the proposed reporting requirements is approximately one year.
Related Links
Comment Due Date: February 22, 2020
Keywords: Europe, EU, Banking, MREL, TLAC, Reporting, Disclosures, Pillar 3, Basel III, CRR 2, BRRD 2, Implementing Technical Standards, Proportionality, Bal-In, G-SIBs, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
PRA Finalizes Approach to Supervision of International Banks
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
FCA Issues PS21/9 on Implementation of Investment Firms Regime
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
EBA Proposes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
IOSCO Proposes Recommendations on ESG Ratings and Data Providers
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
EC to Defer Application of SFDR Standards Till July 2022
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
EBA Seeks Views on Proportionality Assessment Methodology
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
US Agencies Propose Changes to Call Reports and Instructions
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
EBA Examines Asset Encumbrance in Banking Sector
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
