ECB published a letter on amendments to the Annexes to public guidance on the review of qualification of capital instruments as additional tier 1 and tier 2 instruments. The Annexes to the public guidance include templates on the main features of the instruments and on the self-assessment to be performed by the entity on the eligibility conditions. The templates are being updated to reflect the eligibility criteria newly introduced in the revised Capital Requirements Regulation or CRR 2 (2019/876). CRR 2 amended several provisions concerning the eligibility conditions that capital instruments must fulfil to be classified as additional tier 1 or tier 2 instruments, pursuant to Articles 52 and 63, respectively.
For each of the items mentioned in Annex 1 to the letter, the entity should provide the relevant information that should be based on the applicable provisions contained in the agreement governing the capital instrument or any other relevant document. Entities must review and assess each capital instrument against the requirements for own funds set out in the relevant provisions of the CRR and the regulatory technical standards on own funds, taking into consideration the relevant EBA questions and answers and the EBA report on the monitoring of additional tier 1 issuances. An entity must provide all the relevant information to confirm that the conditions have been met. It must also copy or refer to the applicable provisions in the agreement governing the capital instrument and any other relevant documents and refer to the applicable EBA questions and answers that have been taken into consideration. Annex 2 to the letter contains the standard self-assessment templates on eligibility conditions of the additional tier 1 and tier 2 capital instruments.
Related Link: Letter (PDF)
Keywords: Europe, EU, Banking, Reporting, Regulatory Capital, CRR2, Additional Tier 1, Additional Tier 2, Basel, ECB
Previous ArticleEBA Sets Out Work Priorities and Deliverables for 2021
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.