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November 25, 2017

EC published the Commission Delegated Regulation (EU) 2017/2188 on the waiver on own funds requirements for certain covered bonds. Regulation (EU) 2017/2188 amends Capital Requirements Regulation (CRR: Regulation (EU) No 575/2013) and shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from January 01, 2018.

EC used the report on EU Covered Bond Frameworks and Capital Treatment to assess the supervisory and regulatory arrangements applicable to covered bonds and subsequently presented to the European Parliament and the Council a report on Article 503 of CRR. It appeared from that report that only a limited number of national covered bond frameworks allow the inclusion of residential or commercial mortgage-backed securities or intra-group pooled covered bond structures. However, since some institutions rely in their business models on the use of the waiver granted by competent authorities, it is appropriate for reasons of legal certainty to allow the competent authorities to extend the waiver referred to in Article 496(1) of CRR beyond the date mentioned in that provision. Article 496(1) of CRR should, therefore, be amended to repeal the date mentioned in that provision, with the understanding that the possibility for competent authorities to grant a waiver may have to be reassessed in the context of a future covered bonds framework. Hence, the introductory sentence in Article 496(1) of CRR has been replaced.


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Effective Date: December 15, 2017

Keywords: Europe, EU, Banking, Covered Bonds, CRR, Own Funds Requirements, CDR 2017/2188, EC

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