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    EC Regulation Sets Out Standards for Reporting and Disclosure of MREL

    May 12, 2021

    EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL). The standards cover templates, instructions, and methodology for MREL as part of the application of the Capital Requirements Regulation (CRR) and the Bank Recovery and Resolution Directive (BRRD). The Annexes to Regulation 2021/763 contain reporting templates and instructions, validation rules, standardized format for insolvency rankings, and disclosure templates and instructions. Regulation 2021/763 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Provisions on supervisory reporting shall apply from June 28, 2021 while provisions on disclosures shall apply from June 01, 2021, with certain exceptions.

    Entities subject to reporting requirements for the total loss-absorbing capacity (TLAC) and the MREL on an individual or consolidated basis (reporting entities) shall submit information to competent authorities and to resolution authorities as it stands on the following reporting reference dates:

    • For quarterly reporting—March 31, June 30, September 30, and December 31
    • For semi-annual reporting—June 30 and December 31
    • For annual reporting—December 31

    Resolution entities without subsidiaries subject to the requirements set out in Article 45 of the BRRD (in accordance with Article 45e of the BRRD) shall submit to competent authorities and to resolution authorities information on an individual basis specified in templates set out in Annexes I and II to Regulation 2021/763. Resolution entities subject to the requirements set out in Article 45 of BRRD shall submit, to competent authorities and to resolution authorities, the information on a consolidated basis as specified in the templates set out in Annexes I and II to this Regulation. Regulation 2021/763 also specifies format and frequency of reporting on an individual and consolidated basis by entities that are not themselves resolution entities and by material subsidiaries of non-EU global systemically important institutions (G-SIIs). Reporting entities shall submit information in accordance with this Regulation in the data exchange formats and representations specified by their competent authorities or resolution authorities and in accordance with the data point definitions included in the data point model and the validation rules laid down in Annex III to this Regulation.

    Resolution authorities shall compile information on the ranking of items in their national insolvency proceedings in the standardized format specified in Annex IV. They shall update that information when changes occur without undue delay. With respect to public disclosure by institutions, Regulation 2021/763 sets out provisions related to the following:

    • Disclosure of key metrics on own funds and eligible liabilities and the requirements for own funds and eligible liabilities by resolution entities
    • Disclosure of composition of own funds and eligible liabilities by resolution entities
    • Disclosure of key metrics and internal loss-absorbing capacity by entities that are not themselves resolution entities
    • Disclosure of creditor ranking by non-resolution entities
    • Disclosure of creditor ranking by resolution entities
    • Disclosure of main features of own funds and eligible liabilities

     

    Related Link: Regulation 2021/763

    Effective Date: June 01, 2021

    Keywords: Europe, EU, Banking, Reporting, Disclosures, MREL, TLAC, CRR, BRRD, Basel, Pillar 3, Implementing Technical Standards, Validation Rules, Regulatory Capital, EC

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