Featured Product

    PRA Issues Clarifications in Respect of Guidance on MREL Reporting

    September 18, 2019

    PRA published clarifications in respect of the guidance on reporting and definitions to the minimum requirement for own funds and eligible liabilities (MREL) reporting templates available in Appendix 2 of the policy statement (PS11/18) on MREL reporting. The clarifications are being published following the publication of Capital Requirements Regulation or CRR 2 (EU/2019/876) in the Official Journal of the European Union.

    CRR 2 introduces certain new requirements for UK global systemically important banks (G-SIBs) and UK material subsidiaries of non-EU G-SIBs in respect of own funds and eligible liabilities, some of which have been directly applicable from June 27, 2019. PRA provided the following clarifications in respect of the guidance on reporting and definitions:

    • PRA considers acceleration rights as a non-standard term that firms are expected to report in "Any non-standard terms included in the instruments" (row 260) in the MRL003 template.
    • Further to paragraph 2.13 of PS11/18, now that the CRR 2 cross-holdings regime for eligible liabilities is finalized and in effect, UK G-SIBs are expected to submit the information on cross-holdings (MRL001 and MRL002 templates rows 110 to 140).

    Furthermore, in light of the application of the CRR 2 provisions related to the new requirements for own funds and eligible liabilities, reporting should no longer be on a best efforts basis:

    • Information on "Investments in own non-regulatory capital MREL eligible liabilities" (row 100) in the MRL001 and MRL002 templates should be reported on the basis of the gross long positions. Where the exceptions in Article 72f of CRR 2 apply, firms should report the position that is permitted to be used in the relevant exception.
    • Information on "Investments in non-regulatory capital MREL eligible instruments of financial sector entities where the institution does not own more than 10% of the issued common share capital of the entity" (row 120) in the MRL001 and MRL002 templates should be reported on the basis of the gross long positions, as referred to in Article 72g of CRR 2, and subject to the exceptions laid out in Article 72h of CRR 2.
    • Information on "Investments in non-regulatory capital MREL eligible instruments of financial sector entities where the institution owns more than 10% of the issued common share capital of the entity" (row 140) in the MRL001 and MRL002 templates should be reported on the basis of the gross long positions, as referred to in Article 72g of CRR 2, and subject to the exceptions laid out in Article 72h of CRR 2.

    PRA is reviewing the relevant amendments to the revised risk management measures (CRR 2/Capital Requirements Directive, or CRD 5/Bank Recovery and Resolution Directive, or BRRD 2) in EU and will consider whether changes to the MREL reporting templates that have been set out in SS19/13 will be required in due course.

     

    Related Links

    Keywords: Europe, UK, Banking, MREL, Reporting, Resolution Planning, PS 11/18, SS 19/13, Reporting Instructions, CRR 2, CRD 5, BRRD 2, EU, PRA

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    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.

    July 26, 2021 WebPage Regulatory News
    News

    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.

    July 26, 2021 WebPage Regulatory News
    News

    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.

    July 26, 2021 WebPage Regulatory News
    News

    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.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307