EC Standards on Disclosure of Encumbered and Unencumbered Assets
EC published the Commission Delegated Regulation, or CDR, (EU) 2017/2295 laying out regulatory technical standards for disclosure of encumbered and unencumbered assets. CDR (EU) 2017/2295 supplements Capital Requirements Regulation (CRR)—that is, Regulation (EU) No 575/2013. CDR (EU) 2017/2295 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union and Article 2 of the regulation shall apply from January 02, 2019.
CDR (EU) 2017/2295 specifies the requirements for disclosing the amount of encumbered and unencumbered assets for the institutions covered in this regulation. Annexes to this regulation contain disclosure templates for encumbered and unencumbered assets (Annex 1), along with instructions (Annex 2). Article 1 of the regulation specifies the following:
- Institutions shall disclose the amount of encumbered and unencumbered assets under the applicable accounting framework by asset type in columns C010, C040, C060, and C090 of Template A of Annex I, in accordance with the instructions in Annex II.
- Institutions shall disclose information on collateral received by asset type in columns C010 and C040 of Template B of Annex I, in accordance with the instructions in Annex II.
- Institutions shall disclose the liabilities associated with encumbered assets and collateral received as set out in Template C of Annex I, in accordance with the instructions in Annex II.
- Institutions shall disclose narrative information relating to the impact of their business model on their level of encumbrance and the importance of encumbrance in their business model as set out in Template D of Annex I, in accordance with the instructions in Annex II.
To ensure the proportionate application of the disclosure requirements set out in Article 443 of CRR to the smaller institutions that do not have material levels of asset encumbrance, information on the quality of encumbered and unencumbered assets should not be required from such smaller institutions. This regulation is based on the draft regulatory technical standards submitted by EBA to EC. EBA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analyzed the potential related costs and benefits, and requested the opinion of the Banking Stakeholder Group, established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council.
Related Links
Effective Date: January 02, 2018
Keywords: Europe, EU, Banking, Encumbered and Unencumbered Assets, Reporting, Disclosures, CRR, EC
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.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
US Agencies Propose to Extend Certain Capital Rule TransitionsRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards