Featured Product

    SRB Provides Update on Approach to Prior Permissions Regime

    September 16, 2021

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022. The Communication provides an update to the information on its approach to prior permissions for eligible liabilities; this approach was initially published in July 2021, in line with the draft regulatory technical standards on own funds and eligible liabilities. This Communication is intended to assist institutions when applying to SRB for permission for reducing eligible liabilities instruments. The Communication summarizes and explains the procedures that institutions should follow when seeking the SRB permission to call, redeem, repay, or repurchase eligible liabilities instruments before their contractual maturity.

    The obligation to seek approval applies to resolution entities, non-resolution entities, and institutions that will be wound up under normal insolvency proceedings. Resolution entities and non-resolution entities with internal total loss-absorbing capacity (TLAC) requirements have been in the scope of the permission regime since June 27, 2019. Non-resolution entities that are subject to minimum requirement for own funds and eligible liabilities (MREL) are in the scope of the permission regime from January 01, 2022. As of January 01, 2022, the permission regime will apply to all eligible liabilities instruments. This includes senior unsecured liabilities, subordinated liabilities, and internal MREL eligible liabilities. Eligible liability instruments with a residual maturity of less than one year are also in scope.

    The European Banking Authority (EBA) had published, in May 2021, the final report on the draft regulatory technical standards on own funds and eligible liabilities and submitted it to the European Commission for endorsement as a Delegated Regulation. These draft regulatory technical standards are mandated by Article 78a(3) of the Capital Requirements Regulation (CRR) and specify the procedures for granting ad hoc permission and general prior permission, including the time limits and information requirements. As of January 01, 2022, SRB will follow these draft regulatory technical standards for granting permission. All applications seeking SRB authorization as of the date of the current Communication should be aligned with the requirements in the draft regulatory technical standards. However, for applications due by August 31, 2021 and seeking authorizations as of January 01, 2022, as an exceptional measure, SRB will accept applications from institutions until September 30, 2021.

    Aligning the permission regime with the draft regulatory technical standards now would allow banks to continue with their redemption transactions following the adoption of the Delegated Regulation without any disruption or the need to submit new applications. This, however, would be applicable under the condition that the Delegated Regulation will not substantively deviate from the draft regulatory technical standards. Aligning the permission regime with the draft regulatory technical standards will also provide certainty and transparency on what SRB is expecting from banks that wish to apply for prior permission to redeem their eligible liabilities instruments early. SRB will update this communication if any parts of the draft regulatory standards are changed when the Delegated Regulation is endorsed.

     

    Related Links

    Keywords: Europe, EU, Banking, Eligible Liabilities, Regulatory Technical Standards, Own Funds, CRR, MREL, Basel, Resolution Framework, Permissions Regime, TLAC, SRB

    Featured Experts
    Related Articles
    News

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8700