1. Positions in hedging instruments shall be recognised as eligible hedges for the calculation of the own funds requirements for CVA risk in accordance with Articles 383 and 384 where those positions meet all of the following requirements:
(a)
they are used for the purpose of mitigating CVA risk and are managed as such;
(b)
they can be entered into with third parties or with the institution’s trading book as an internal hedge, in which case they are to comply with Article 106(7);
(c)
only positions in hedging instruments as referred to in paragraphs 2 and 3 of this Article can be recognised as eligible hedges for the calculation of the own funds requirements for CVA risk in accordance with Articles 383 and 384, respectively.
For the purpose of calculating the own funds requirements for CVA risk in accordance with Article 383, positions in hedging instruments shall be recognised as eligible hedges where, in addition to the conditions set out in points (a) to (c) of this paragraph, such hedging instruments form a single position in an eligible hedge and are not split into more than one position in more than one eligible hedge.
2. For the calculation of the own funds requirements for CVA risk in accordance with Article 383, only positions in the following hedging instruments shall be recognised as eligible hedges:
(a)
instruments that hedge variability of the counterparty credit spread, with the exception of instruments referred to in Article 325(5);
(b)
instruments that hedge variability of the exposure component of CVA risk, with the exception of the instruments referred to in Article 325(5).
3. For the calculation of the own funds requirements for CVA risk in accordance with Article 384, only positions in the following hedging instruments shall be recognised as eligible hedges:
(a)
single-name credit default swaps and single-name contingent-credit default swaps, referencing:
(i)
the counterparty directly;
(ii)
an entity legally related to the counterparty, where legally related refers to cases where the reference name and the counterparty are either a parent undertaking and its subsidiary or two subsidiaries of a common parent;
(iii)
an entity that belongs to the same sector and region as the counterparty;
(b)
index credit default swaps.
4. Positions in hedging instruments entered into with third parties that are recognised as eligible hedges in accordance with paragraphs 1, 2 and 3 and included in the calculation of the own funds requirements for CVA risk shall not be subject to the own funds requirements for market risk set out in Title IV.
5. Positions in hedging instruments that are not recognised as eligible hedges in accordance with this Article shall be subject to the own funds requirements for market risk set out in Title IV.’
;
(203)
in Article 394, paragraph 2 is amended as follows:
(a)
in the first subparagraph, the introductory wording is replaced by the following:
‘In addition to the information referred to in paragraph 1 of this Article, institutions shall report the following information to their competent authorities in relation to their 10 largest exposures to institutions on a consolidated basis, as well as their 10 largest exposures to shadow banking entities on a consolidated basis, including large exposures exempted from the application of Article 395(1):’
;
(b)
the following subparagraph is added:
‘In addition to the information referred to in the first subparagraph, institutions shall report to their competent authorities their aggregate exposure to shadow banking entities.’
;
(204)
in Article 395, the following paragraph is inserted:
‘2a. By 10 January 2027, EBA, after consulting ESMA, shall issue guidelines, in accordance with Article 16 of Regulation (EU) No 1093/2010, to update the guidelines referred to in paragraph 2 of this Article.
In updating those guidelines, EBA shall take due account, among other considerations, of the contribution of shadow banking entities to the capital markets union, the potential adverse impact that any changes of those guidelines, including additional limits, could have on the business model and risk profile of the institutions and on the stability and the orderly functioning of financial markets.
In addition, by 31 December 2027, EBA, after consulting ESMA, shall submit a report to the Commission on the contribution of shadow banking entities to the capital markets union and on institutions’ exposures to such entities, including on the appropriateness of aggregate limits or tighter individual limits to those exposures, while taking due account of the regulatory framework and business models of such entities.
By 31 December 2028, the Commission shall, where appropriate, on the basis of that report, submit to the European Parliament and to the Council a legislative proposal on exposure limits to shadow banking entities.’
;
(205)
Article 400 is amended as follows:
(a)
in paragraph 1, point (i) is replaced by the following:
‘(i)
exposures arising from undrawn credit facilities that are classified as bucket 5 off-balance-sheet items in Annex I or contractual arrangements that meet the conditions for not being treated as commitments and provided that an agreement has been concluded with the client or group of connected clients under which the facility may be drawn only if it has been ascertained that it will not cause the limit applicable under Article 395(1) to be exceeded;’
;
(b)
paragraph 2 is amended as follows:
(i)
point (a) is replaced by the following:
‘(a)
covered bonds as referred to in Article 129;’
;
(ii)
point (i) is replaced by the following:
‘(i)
50 % of bucket 4 off-balance-sheet documentary credits and of bucket 3 off-balance-sheet undrawn credit facilities referred to in Annex I with an original maturity of up to and including one year and subject to the competent authorities’ agreement, 80 % of guarantees other than loan guarantees which have a legal or regulatory basis and are given for their members by mutual guarantee schemes possessing the status of credit institutions;’
;
(206)
Article 402 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
the introductory wording is replaced by the following:
‘For the calculation of exposure values for the purposes of Article 395, institutions may, except where prohibited by applicable national law, reduce the value of an exposure or any part of an exposure that is secured by residential property in accordance with Article 125(1) by the pledged amount of the property value, but by not more than 55 % of the property value, provided that all of the following conditions are met:’
;
(ii)
point (a) is replaced by the following:
‘(a)
the competent authorities have not set a risk weight higher than 20 % for exposures or parts of exposures secured by residential property in accordance with Article 124(9);’
;
(b)
paragraph 2 is amended as follows:
(i)
the introductory wording is replaced by the following:
‘For the calculation of exposure values for the purposes of Article 395, institutions may, except where prohibited by applicable national law, reduce the value of an exposure or any part of an exposure that is secured by commercial immovable property in accordance with Article 126(1) by the pledged amount of the property value, but by not more than 55 % of the property value, provided that all of the following conditions are met:’
;
(ii)
point (a) is replaced by the following:
‘(a)
the competent authorities have not set a risk weight higher than 60 % for exposures or parts of exposures secured by commercial immovable property in accordance with Article 124(9);’
;
(iii)
point (c) is replaced by the following:
‘(c)
the requirements in Article 124(3), point (c), and in Article 208 and Article 229(1) are met;’
;
(207)
in Article 425(4), point (b) is replaced by the following:
‘(b)
the counterparty is a parent or subsidiary institution of the institution or another subsidiary of the same parent institution or linked to the institution by a relationship within the meaning of Article 22(7) of Directive 2013/34/EU or a member of the same institutional protection scheme referred to in Article 113(7) of this Regulation or the central institution or a member of a network that is subject to the waiver referred to in Article 10 of this Regulation;’
;
(208)
in Article 428(1), point (k) is replaced by the following:
‘(k)
undrawn credit facilities that qualify as bucket 4, bucket 3 or bucket 2 items under Annex I.’
;
(209)
Article 429, is amended as follows:
(a)
in paragraph 5, the third subparagraph is replaced by the following:
‘For the purposes of the first subparagraph, point (b), and of the second subparagraph of this paragraph, institutions may consider an affiliated entity as a client only where that entity is outside the regulatory scope of consolidation at the level at which the requirement set out in Article 92(4), point (e), is applied.’
;
(b)
paragraph 6 is replaced by the following:
‘6. For the purposes of paragraph 4, point (e), of this Article and Article 429g, “regular-way purchase or sale” means a purchase or a sale of a financial asset under contracts for which the terms require delivery of the financial asset within the period established generally by law or convention in the marketplace concerned.’
;
(210)
in Article 429a, paragraph 1 is amended as follows:
(a)
the following point is inserted:
‘(ca)
where the institution is a member of the network referred to in Article 113(7), the exposures that are assigned a risk weight of 0 % in accordance with Article 114 and arising from assets being an equivalent of deposits in the same currency of other members of that network stemming from legal or statutory minimum deposit in accordance with Article 422(3), point (b); in such a case exposures of other members of that network being legal or statutory minimum deposit are not subject to point (c) of this paragraph.’
;
(b)
the following point is inserted:
‘(da)
the institution’s exposures to its shareholders, provided that such exposures are collateralised to the level of at least 125 % by assets referred to in Article 129(1), points (d) and (e), and those assets are accounted for in the shareholders’ leverage ratio requirement, where the institution is not a public development credit institution but it meets the following conditions:
(i)
its shareholders are credit institutions and do not exercise control over the institution;
(ii)
it complies with paragraph 2, points (a), (b), (c) and (e), of this Article;
(iii)
its exposures are located in the same Member State;
(iv)
it is subject to some form of oversight by a Member State’s central government on an ongoing basis;
(v)
its business model is limited to the pass-through of the amount corresponding to the proceeds raised through the issuance of covered bonds to its shareholders, in the form of debt instruments;’
;
(211)
Article 429c is amended as follows:
(a)
in paragraph 3, point (a) is replaced by the following:
‘(a)
for trades not cleared through a QCCP, the cash received by the recipient counterparty is not segregated from the assets of the institution;’
;
(b)
paragraph 4 is replaced by the following:
‘4.
For the purposes of paragraph 1 of this Article, institutions shall not include collateral received in the calculation of NICA as defined in Article 272, point (12a).’
;
(c)
the following paragraph is inserted:
‘4a. By way of derogation from paragraphs 3 and 4, an institution may recognise any collateral received in accordance with Part Three, Title II, Chapter 6, Section 3 where all of the following conditions are met:
(a)
the collateral is received from a client for a derivative contract cleared by the institution on behalf of that client;
(b)
the contract referred to in point (a) is cleared through a QCCP;
(c)
where the collateral has been received in the form of initial margin, that collateral is segregated from the assets of the institution.’
;
(d)
in paragraph 6, the first subparagraph is replaced by the following:
‘By way of derogation from paragraph 1 of this Article, institutions may use the method set out in Part Three, Title II, Chapter 6, Section 4 or 5 to determine the exposure value of the following:
(a)
derivative contracts listed in Annex II and credit derivatives, where they also use that method for determining the exposure value of those contracts for the purposes of meeting the own funds requirements set out in Article 92(1), points (a), (b) and (c);
(b)
credit derivatives to which they apply the treatment set out in Article 273(3) or (5), where the conditions to use that method are met.’
;
(212)
Article 429f is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. Institutions shall calculate, in accordance with Article 111(2), the exposure value of off-balance-sheet items, excluding the derivative contracts listed in Annex II, credit derivatives, securities financing transactions and the positions referred to in Article 429d.
Where a commitment refers to the extension of another off-balance-sheet item, Article 111(3) shall apply.’
;
(b)
paragraph 3 is replaced by the following:
‘3. By way of derogation from Article 495d, institutions shall apply a conversion factor of 10 % to off-balance-sheet items in the form of unconditionally cancellable commitments.’
;
(213)
in Article 429g, paragraph 1 is replaced by the following:
‘1. Institutions shall treat cash related to regular-way purchases and financial assets related to regular-way sales which remain on the balance sheet until the settlement date as assets in accordance with Article 429(4), point (a).’
;
(214)
Article 430 is amended as follows:
(a)
in paragraph 1, the following points are added:
‘(h)
their exposures to ESG risks, including:
(i)
their existing and new exposures to fossil fuel sector entities;
(ii)
their exposures to physical risks and transition risks;
(i)
their crypto-asset exposures;’
;
(b)
the following paragraphs are inserted:
‘2a. When reporting their own funds requirements for market risk referred to in paragraph 1, point (a), of this Article, institutions shall report separately the calculations set out in Article 325c(2), points (a), (b) and (c), for the portfolio of all trading book positions or non-trading book positions that are subject to foreign exchange risk and commodity risk.
2b. When reporting their own funds requirements for market risk referred to in paragraph 1, point (a), of this Article, institutions shall report separately the calculations set out in Article 325ba(1), points (a)(i) and (ii) and (b)(i) and (ii), and for the portfolio of all trading book positions or non-trading book positions that are subject to foreign exchange risk and commodity risk assigned to the trading desks for which they have been granted permission by the competent authorities to use the alternative internal model approach in accordance with Article 325az(2).’
;
(c)
paragraph 7 is amended as follows:
(i)
the first subparagraph is replaced by the following:
‘EBA shall develop draft implementing technical standards to specify the uniform reporting formats, the frequency and dates of reporting, as well as the definitions, and shall develop IT solutions, including reporting templates and instructions for the reporting referred to in paragraphs 1 to 4.’
;
(ii)
in the fourth subparagraph, the following point is added:
‘(c)
exposures to ESG risks, which shall be submitted by 10 July 2025.’
;
(215)
Article 430a is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. Institutions shall report to their competent authorities on an annual basis the following aggregate data for each national immovable property market to which they are exposed:
(a)
losses stemming from exposures for which an institution has recognised residential property as collateral, in each case up to the lower of the pledged amount and 55 % of the property value of the residential property, unless otherwise decided under Article 124(9), where applicable;
(b)
overall losses stemming from exposures for which an institution has recognised residential property as collateral, in each case up to the lower of the pledged amount and 100 % of the property value of the residential property;
(c)
the exposure value of all outstanding exposures for which an institution has recognised residential property as collateral, in each case up to the lower of the pledged amount and 100 % of the property value of the residential property;
(d)
losses stemming from exposures for which an institution has recognised commercial immovable property as collateral, in each case up to the lower of the pledged amount and 55 % of the property value of the commercial immovable property, unless otherwise decided under Article 124(9), where applicable;
(e)
overall losses stemming from exposures for which an institution has recognised commercial immovable property as collateral in each case up to the lower of the pledged amount and 100 % of the property value of the commercial immovable property;
(f)
the exposure value of all outstanding exposures for which an institution has recognised commercial immovable property as collateral, in each case up to the lower of the pledged amount and 100 % of the property value of the commercial immovable property.’
;
(b)
paragraph 3 is replaced by the following:
‘3. The competent authorities shall publish annually on an aggregated basis the data specified in paragraph 1, points (a) to (f), together with historical data, where available, for each national immovable property market for which such data have been collected. A competent authority shall, upon the request of another competent authority in a Member State or EBA, provide to that competent authority or EBA more detailed information on the condition of the residential property or commercial immovable property markets in that Member State.’
;
(216)
Article 430b is deleted;
(217)
Article 433 is replaced by the following:
‘Article 433
Frequency and scope of disclosures
Institutions shall disclose the information required under Titles II and III in the manner set out in this Article, Articles 433a, 433b, 433c and 434.
EBA shall publish annual disclosures on its website on the same day as the institutions publish their financial statements or as soon as possible thereafter.
EBA shall publish semi-annual and quarterly disclosures on its website on the same day as the institutions publish their financial reports for the corresponding period, where applicable, or as soon as possible thereafter.
Any delay between the date of publication of the disclosures required under this Part and the relevant financial statements shall be reasonable and, in any event, shall not exceed the timeframe set by competent authorities pursuant to Article 106 of Directive 2013/36/EU.’
;
(218)
in Article 433a, paragraph 1 is amended as follows:
(a)
point (b) is amended as follows:
(i)
point (xiv) is replaced by the following:
‘(xiv)
Article 455(2), points (a), (b) and (c);’
;
(ii)
the following points are added:
‘(xv)
Article 449a;
(xvi)
Article 449b;’
;
(b)
in point (c), point (i) is replaced by the following:
‘(i)
Article 438, points (d), (da) and (h);’
;
(219)
Article 433b is replaced by the following:
‘Article 433b
Disclosures by small and non-complex institutions
1. Small and non-complex institutions shall disclose the information referred to in the following provisions on an annual basis:
(a)
Article 435(1), points (a), (e) and (f);
(b)
Article 438, points (c), (d) and (da);
(c)
Article 442, points (c) and (d);
(d)
the key metrics referred to in Article 447;
(e)
Article 449a;
(f)
Article 449b;
(g)
Article 450(1), points (a) to (d), (h), (i) and (j).
2. By way of derogation from paragraph 1 of this Article, small and non-complex institutions that are non-listed institutions shall disclose the key metrics referred to in Article 447 and ESG risks referred to in Article 449a on an annual basis.’
;
(220)
in Article 433c, paragraph 2 is amended as follows:
(a)
point (d) is replaced by the following:
‘(d)
Article 438, points (c), (d) and (da):’
;
(b)
the following point is inserted:
‘(da)
Article 442, points (c) and (d);’
;
(c)
the following points are inserted:
‘(ea)
the information referred to in Article 449a;
(eb)
the information referred to in Article 449b;’
;
(221)
Article 434 is replaced by the following:
‘Article 434
Means of disclosures
1. Institutions other than small and non-complex institutions shall submit all information required under Titles II and III in electronic format to EBA no later than the date on which they publish their financial statements or financial reports for the corresponding period, where applicable, or as soon as possible thereafter. EBA shall publish that information, together with its submission date, on its website.
EBA shall ensure that disclosures made on its website contain information identical to that which institutions submitted to EBA. Institutions shall have the right to resubmit to EBA the information in accordance with the technical standards referred to in Article 434a. EBA shall make available on its website the date when the resubmission took place.
EBA shall prepare and keep up-to-date a tool that specifies the mapping of the templates and tables for disclosures with those on supervisory reporting. The mapping tool shall be accessible to the public on the EBA website.
Institutions may continue to publish a standalone document that provides a readily accessible source of prudential information for users of that information or a distinctive section included in or appended to the institutions’ financial statements or financial reports containing the required disclosures and being easily identifiable to those users. Institutions may include in their website a link to the EBA website where the prudential information is published in a centralised manner.
2. Institutions other than small and non-complex institutions shall submit the disclosures required under Articles 433a and 433c in electronic format to EBA no later than the date on which they publish their financial statements or financial reports for the corresponding period or as soon as possible thereafter. If the financial reports are published before the submission of information in accordance with Article 430 for the same period, disclosures can be submitted on the same date as supervisory reporting or as soon as possible thereafter. If disclosure is required to be made for a period when an institution does not prepare any financial report, the institution shall submit to EBA the information on disclosures as soon as possible following the end of that period.
3. By way of derogation from paragraphs 1 and 2 of this Article, institutions may submit to EBA the information required under Article 450 separately from the other information required under Titles II and III no later than two months after the date on which institutions publish their financial statements for the corresponding year.
4. EBA shall publish on its website the disclosures of small and non-complex institutions on the basis of the information reported by those institutions to competent authorities in accordance with Article 430.
5. Ownership of the data and the responsibility for their accuracy shall remain with the institutions that produce them. EBA shall provide for a single access point for institutions’ disclosures and shall make available on its website an archive of the information required to be disclosed in accordance with this Part. That archive shall be kept accessible for a period that shall be no less than the storage period set by national law for information included in the institutions’ financial reports.
6. EBA shall monitor the number of visits to its single access point for institutions’ disclosures and include the related statistics in its annual reports.’
;
(222)
Article 434a is amended as follows:
(a)
the first paragraph is replaced by the following:
‘EBA shall develop draft implementing technical standards to specify uniform disclosure formats, and information on the resubmission policy, and shall develop IT solutions, including instructions, for disclosures required under Titles II and III.’
;
(b)
the fourth paragraph is replaced by the following:
‘EBA shall submit those draft implementing technical standards to the Commission by 10 July 2025.’
;
(223)
the following article is inserted:
‘Article 434c
Report on the feasibility of the use of information reported by institutions other than small and non-complex institutions to publish an extended set of disclosures on the EBA website
EBA shall prepare a report on the feasibility of using information reported by institutions other than small and non-complex institutions to competent authorities in accordance with Article 430 in order to publish that information on its website thereby reducing the disclosure burden for such institutions.
That report shall consider the previous work of EBA regarding integrated data collections, shall be based on an overall cost and benefit analysis, including costs incurred by competent authorities, institutions and EBA, and shall consider any potential technical, operational and legal challenges.
EBA shall submit that report to the European Parliament, to the Council, and to the Commission by 10 July 2027.
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.’
;
(224)
Article 438 is amended as follows:
(a)
point (b) is replaced by the following:
‘(b)
the amount of the additional own funds requirements based on the supervisory review process as referred to in Article 104(1), point (a), of Directive 2013/36/EU to address risks other than the risk of excessive leverage and its composition;’
;
(b)
point (d) is replaced by the following:
‘(d)
the total risk exposure amount as calculated in accordance with Article 92(3) and the corresponding own funds requirements as determined in accordance with Article 92(2), to be broken down by the different risk categories or risk exposure classes, as applicable, set out in Part Three and, where applicable, an explanation of the effect on the calculation of the own funds and risk-weighted exposure amounts that results from applying capital floors and not deducting items from own funds;’
;
(c)
the following point is inserted:
‘(da)
where required to calculate the un-floored total risk exposure amount as calculated in accordance with Article 92(4), and the standardised total risk exposure amount as calculated in accordance with Article 92(5), to be broken down by the different risk categories or risk exposure classes, as applicable, set out in Part Three and, where applicable, an explanation of the effect on the calculation of own funds and risk-weighted exposure amounts that results from applying capital floors and not deducting items from own funds;’
;
(d)
point (e) is replaced by the following:
‘(e)
the on- and off-balance-sheet exposures, the risk-weighted exposure amounts and associated expected losses for each category of specialised lending referred to in Article 153(5), Table 1, and the on- and off-balance-sheet exposures and risk-weighted exposure amounts for the categories of equity exposures set out in Article 133(3) to (6), and Article 495a(3).’
;
(225)
Article 445 is replaced by the following:
‘Article 445
Disclosure of exposures to market risk under the standardised approach
1. Institutions that have not been granted permission by competent authorities to use the alternative internal model approach as set out in Article 325az, and that use the simplified standardised approach in accordance with Article 325a or the alternative standardised approach in accordance with Part Three, Title IV, Chapter 1a, shall disclose an overview of their trading book positions.
2. Institutions calculating their own funds requirements in accordance with Part Three, Title IV, Chapter 1a, shall disclose their total own funds requirements, own funds requirements for the sensitivities-based method, default risk charge and own funds requirements for residual risks. The disclosure of own funds requirements for the measures of the sensitivities-based method and for default risk shall be broken down into the following instruments:
(a)
financial instruments other than securitisation instruments held in the trading book, with a breakdown by risk class, and a separate identification of the own funds requirements for default risk;
(b)
securitisation instruments not held in the ACTP, with a separate identification of the own funds requirements for credit spread risk and of the own funds requirements for default risk;
(c)
securitisation instruments held in the ACTP, with a separate identification of the own funds requirements for credit spread risk and of the own funds requirements for default risk.’
;
(226)
the following article is inserted:
‘Article 445a
Disclosure of CVA risk
1. Institutions subject to the own funds requirements for CVA risk shall disclose the following information:
(a)
an overview of their processes to identify, measure, hedge and monitor their CVA risk;
(b)
whether institutions meet all of the conditions set out in Article 273a(2); where those conditions are met, whether institutions have chosen to calculate the own funds requirements for CVA risk using the simplified approach set out in Article 385; where institutions have chosen to calculate the own funds requirements for CVA risk using the simplified approach, the own funds requirements for CVA risk in accordance with that approach;
(c)
the total number of counterparties for which the standardised approach is used, with a breakdown by counterparty types.
2. Institutions using the standardised approach set out in Article 383 for calculating the own funds requirements for CVA risk shall disclose, in addition to the information referred to in paragraph 1 of this Article, the following information:
(a)
the structure and the organisation of their internal CVA risk management function and governance;
(b)
their total own funds requirements for CVA risk under the standardised approach with a breakdown by risk class;
(c)
an overview of the eligible hedges used in that calculation, with a breakdown by type of instruments set out in Article 386(2).
3. Institutions using the basic approach set out in Article 384 for calculating the own funds requirements for CVA risk shall disclose, in addition to the information referred to in paragraph 1 of this Article, the following information:
(a)
their total own funds requirements for CVA risk under the basic approach, and the components BACVAtotal and BACVAcsr-hedged ;
(b)
an overview of the eligible hedges used in that calculation, with a breakdown by type of instruments set out in Article 386(3).’
;
(227)
Article 446 is replaced by the following:
‘Article 446
Disclosure of operational risk
1. Institutions shall disclose the following information:
(a)
the main characteristics and elements of their operational risk management framework;
(b)
their own funds requirement for operational risk equal to the business indicator component calculated in accordance with Article 313;
(c)
the business indicator, calculated in accordance with Article 314(1), and the amounts of each of the business indicator components and their sub-components for each of the three years relevant for the calculation of the business indicator;
(d)
the amount of the reduction of the business indicator for each exclusion from the business indicator in accordance with Article 315(2), as well as the corresponding justifications for such exclusions.
2. Institutions that calculate their annual operational risk losses in accordance with Article 316(1) shall disclose the following information in addition to the information referred to in paragraph 1 of this Article:
(a)
their annual operational risk losses for each of the last 10 financial years, calculated in accordance with Article 316(1);
(b)
the number of exceptional operational risk events and the amounts of the corresponding aggregated net operational risk losses that were excluded from the calculation of the annual operational risk loss in accordance with Article 320(1), for each of the last 10 financial years, and the corresponding justifications for those exclusions.’
;
(228)
Article 447 is amended as follows:
(a)
point (a) is replaced by the following:
‘(a)
the composition of their own funds and their risk-based capital ratios as calculated in accordance with Article 92(2);’
;
(b)
the following point is inserted:
‘(aa)
where applicable, the risk-based capital ratios as calculated in accordance with Article 92(2), by using the un-floored total risk exposure amount instead of the total risk exposure amount;’
;
(c)
point (b) is replaced by the following:
‘(b)
the total risk exposure amount as calculated in accordance with Article 92(3) and, where applicable, the un-floored total risk exposure amount as calculated in accordance with Article 92(4);’
;
(d)
point (d) is replaced by the following:
‘(d)
the combined buffer requirement which the institutions are required to hold in accordance with Chapter 4 of Title VII of Directive 2013/36/EU;’
;
(229)
Article 449a is replaced by the following:
‘Article 449a
Disclosure of environmental, social and governance risks (ESG risks)
1. Institutions shall disclose information on ESG risks, distinguishing environmental, social and governance risks, and physical risks and transition risks for environmental risks.
2. For the purposes of paragraph 1, institutions shall disclose information on ESG risks, including:
(a)
the total amount of exposures to fossil fuel sector entities;
(b)
how institutions integrate the identified ESG risks in their business strategy and processes, and governance and risk management.
3. EBA shall develop draft implementing technical standards to specify uniform disclosure formats, as laid down in Article 434a, for ESG risks ensuring that they are consistent with and uphold the principle of proportionality while avoiding duplication of disclosure requirements already established in other applicable Union law. Those formats shall not require disclosure of information beyond the information to be reported to competent authorities in accordance with Article 430(1), point (h), and shall in particular take into account the size and complexity of the institution and the relative exposure of small and non-complex institutions subject to Article 433b to ESG risks.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph of this paragraph in accordance with Article 15 of Regulation (EU) No 1093/2010.’
;
(230)
the following article is inserted:
‘Article 449b
Disclosure of aggregate exposure to shadow banking entities
Institutions shall disclose the information concerning their aggregate exposure to shadow banking entities, as referred to in Article 394(2), second subparagraph.’
;
(231)
in Article 451(1), the following point is added:
‘(f)
the amount of the additional own funds requirements based on the supervisory review process as referred to in Article 104(1), point (a), of Directive 2013/36/EU to address the risk of excessive leverage and its composition.’
;
(232)
the following article is inserted:
‘Article 451b
Disclosure of crypto-asset exposures and related activities
1. Institutions shall disclose the following information on crypto-assets and crypto-asset services as well as any other activities related to crypto-assets:
(a)
the direct and indirect exposure amounts in relation to crypto-assets, including the gross long and short components of net exposures;
(b)
the total risk exposure amount for operational risk;
(c)
the accounting classification for crypto-asset exposures;
(d)
a description of the business activities related to crypto-assets and their impact on the risk profile of the institution;
(e)
a specific description of their risk management policies related to crypto-asset exposures and crypto-asset services.
For the purposes of the first subparagraph, point (d), of this paragraph, institutions shall provide more detailed information on material business activities, including on the issuance of significant asset-referenced tokens and of significant e-money tokens and on the provision of crypto-asset services under Articles 60 and 61 of Regulation (EU) 2023/1114.
2. Institutions shall not apply the exception laid down in Article 432 for the purposes of the disclosure requirements laid down in paragraph 1 of this Article.’
;
(233)
Article 455 is replaced by the following:
‘Article 455
Use of internal models for market risk
1. An institution using the internal models referred to in Article 325az for the calculation of the own funds requirements for market risk shall disclose:
(a)
its objectives in undertaking trading activities and the processes implemented to identify, measure, monitor and control the market risk;
(b)
the policies referred to in Article 104(1) for determining which position is to be included in the trading book;
(c)
a general description of the structure of the trading desks covered by the internal models, including for each desk a broad description of the desk’s business strategy, the instruments permitted therein and the main risk types in relation to that desk;
(d)
an overview of the trading book positions not covered by the internal models, including a general description of the desk structure and of types of instruments included in the desks or in the desk categories in accordance with Article 104b;
(e)
the structure and organisation of the market risk management function and governance;
(f)
the scope, the main characteristics and the key modelling choices of the different internal models used to calculate the risk exposure amounts for the main models used at the consolidated level, and a description of the extent to which those internal models represent the models used at the consolidated level, including, where applicable, a broad description of the following:
(i)
the modelling approach used to calculate the expected shortfall referred to in Article 325ba(1), point (a), including the frequency of data update;
(ii)
the methodology used to calculate the stress scenario risk measure referred to in Article 325ba(1), point (b), other than the specifications provided for in Article 325bk(3);
(iii)
the modelling approach used to calculate the default risk charge referred to in Article 325ba(2), including the frequency of data update.
2. Institutions shall disclose on an aggregate basis for all trading desks covered by the internal models referred to in Article 325az the following components, where applicable:
(a)
the most recent value as well as the highest, lowest and mean value for the previous 60 business days of:
(i)
the unconstrained expected shortfall measure referred to in Article 325bb(1);
(ii)
the unconstrained expected shortfall measure referred to in Article 325bb(1) for each regulatory broad risk factor category;
(b)
the most recent value as well as the mean value for the previous 60 business days of:
(i)
the expected shortfall risk measure referred to in Article 325bb(1);
(ii)
the stress scenario risk measure referred to in Article 325ba(1), point (b);
(iii)
the own funds requirement for default risk referred to in Article 325ba(2);
(iv)
the sum of the own funds requirements referred to in Article 325ba(3), including all components of the formula and the applicable multiplier factor;
(c)
the number of back-testing overshootings over the most recent 250 business days at the 99th percentile as referred to in Article 325bf(6).
3. Institutions shall disclose on an aggregate basis for all trading desks the own funds requirements for market risk that would be calculated in accordance with Part Three Title IV, Chapter 1a, had the institutions not been granted permission to use their internal models for those trading desks.’
;
(234)
in Article 456(1), point (d) is replaced by the following:
‘(d)
the amount specified in Article 123(1), point (b), Article 147(5), point (a), Article 153(4) and Article 162(4), to take into account the effects of inflation;’
;
(235)
Article 458 is amended as follows:
(a)
paragraph 6 is replaced by the following:
‘6. Where Member States recognise the measures set in accordance with this Article, they shall notify the ESRB. The ESRB shall forward such notifications without delay to the Council, the Commission, EBA and the Member State authorised to apply the measures.’
;
(b)
paragraph 9 is replaced by the following:
‘9. Before the expiry of the authorisation issued in accordance with paragraphs 2 and 4, the Member State concerned shall, in consultation with the ESRB, EBA and the Commission, review the situation and may adopt, in accordance with the procedure referred to in paragraphs 2 and 4, a new decision for the extension of the period of application of national measures for up to two additional years each time.’
;
(236)
Article 461a is replaced by the following:
‘Article 461a
Own funds requirements for market risk
1. The Commission shall monitor the differences between the implementation of international standards on own funds requirements for market risk in the Union and in third countries, including as regards the impact of the rules in terms of own funds requirements and as regards their date of application.
2. Where significant differences in such implementation are observed, the Commission shall be empowered to adopt delegated acts in accordance with Article 462 to amend this Regulation by:
(a)
applying, until the date of application of the legislative act referred to in paragraph 3 of this Article or for up to three years in the absence of such an act, and where necessary to preserve a level playing field and to offset those observed differences, targeted operational relief measures or targeted multipliers equal to or greater than 0 and lower than 1 in the calculation of the institutions’ own funds requirements for market risk, for specific risk classes and specific risk factors, using one of the approaches referred to in Article 325(1), and laid out in:
(i)
Articles 325c to 325ay, specifying the alternative standardised approach;
(ii)
Articles 325az to 325bp, specifying the alternative internal model approach;
(iii)
Articles 326 to 361, specifying the simplified standardised approach;
(b)
postponing for up to two years the date from which institutions shall apply the own funds requirements for market risk set out in Part Three, Title IV, or any of the approaches to calculate the own funds requirements for market risk referred to in Article 325(1).
Where the Commission adopts the delegated act referred to in the first subparagraph, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to adjust the implementation in the Union of international standards on own funds requirements for market risk to preserve in a more permanent manner a level playing field with third countries, in terms of own funds requirements and the impact of those requirements.
3. By 10 July 2026, EBA shall submit a report to the European Parliament, to the Council and to the Commission on the implementation of international standards on own funds requirements for market risk in third countries.
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal, in order to ensure a global level playing field.’
;
(237)
Article 465 is replaced by the following:
‘Article 465
Transitional arrangements for the output floor
1. By way of derogation from Article 92(3), first subparagraph, and without prejudice to the derogation set out in Article 92(3), second subparagraph, institutions may apply the following factor x where calculating TREA:
(a)
50 % during the period from 1 January 2025 to 31 December 2025;
(b)
55 % during the period from 1 January 2026 to 31 December 2026;
(c)
60 % during the period from 1 January 2027 to 31 December 2027;
(d)
65 % during the period from 1 January 2028 to 31 December 2028;
(e)
70 % during the period from 1 January 2029 to 31 December 2029.
2. By way of derogation from Article 92(3), first subparagraph, and without prejudice to the derogation set out in Article 92(3), second subparagraph, institutions may, until 31 December 2029, apply the following formula where calculating TREA:
For the purposes of that calculation, institutions shall take into account the applicable factor x referred to in paragraph 1.
3. By way of derogation from Article 92(5), point (a)(ii), and without prejudice to the derogation set out in Article 92(3), second subparagraph, institutions may, until 31 December 2032, assign a risk weight of 65 % to exposures to corporates for which no credit assessment by a nominated ECAI is available and provided that those institutions’ estimates of the PD of those obligors, calculated in accordance with Part Three, Title II, Chapter 3, are no greater than 0,5 %.
EBA and ESMA, in cooperation with EIOPA, shall monitor the use of the transitional treatment laid down in the first subparagraph and assess, in particular:
(a)
the availability of credit assessments by nominated ECAIs for corporates and the extent to which that affects institutions’ lending towards corporates;
(b)
the development of credit rating agencies, barriers to entry to the market for new credit rating agencies, the rate of uptake by corporates choosing to be rated by one or more of those agencies, and impediments to the availability of credit assessments for corporates by ECAIs;
(c)
possible measures to address the impediments, taking into account differences across economic sectors and geographical areas and the development of private or publicly led solutions such as credit scoring, private ratings mandated by institutions, as well as central bank ratings;
(d)
the appropriateness of the risk-weighted exposure amounts of unrated corporate exposures and their implications for financial stability;
(e)
the approaches of third countries concerning the application of the output floor to corporate exposures and long-term level playing field considerations that could arise as a result;
(f)
compliance with related internationally agreed standards developed by the BCBS.
EBA and ESMA, in cooperation with EIOPA, shall submit a report with their findings to the Commission by 10 July 2029.
On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.
4. By way of derogation from Article 92(5), point (a)(iv), and without prejudice to the derogation set out in Article 92(3), second subparagraph, institutions shall, until 31 December 2029, replace alpha by 1 in the calculation of the exposure value for the contracts listed in Annex II in accordance with the approaches set out in Part Three, Title II, Chapter 6, Section 3 where the same exposure values are calculated in accordance with the approach set out in Part Three, Title II, Chapter 6, Section 6 for the purposes of the total un-floored risk exposure amount.
5. By way of derogation from Article 92(5), point (a)(ii), and without prejudice to the derogation set out in Article 92(3), second subparagraph, and provided that all conditions set out in paragraph 8 of this Article are met, Member States may allow institutions to assign:
(a)
until 31 December 2032, a risk weight of 10 % to the part of the exposures secured by mortgages on residential property up to 55 % of the property value determined in accordance with Article 125(1), first subparagraph; and
(b)
until 31 December 2029, a risk weight of 45 % to any remaining part of the exposures secured by mortgages on residential property up to 80 % of the property value determined in accordance with Article 125(1), first subparagraph, provided that the adjustment to own funds requirements for credit risk referred to in Article 501 is not applied.
6. For the purposes of paragraph 5, point (a), where an institution holds a junior lien and there are more senior liens not held by that institution, to determine the part of the institution’s exposure that is eligible for the 10 % risk weight, the amount of 55 % of the property value shall be reduced by the amount of the more senior liens not held by the institution.
Where liens not held by the institution rank pari passu with the lien held by the institution, to determine the part of the institution’s exposure that is eligible for the 10 % risk weight, the amount of 55 % of the property value, reduced by the amount of any more senior liens not held by the institution, shall be reduced by the product of:
(a)
55 % of the property value, reduced by the amount of more senior liens, if any, both held by the institution and held by other institutions; and
(b)
the amount of liens not held by the institution that rank pari passu with the lien held by the institution divided by the sum of all pari passu liens.
7. For the purposes of paragraph 5, point (b), where an institution holds a junior lien and there are more senior liens not held by that institution, to determine the part of the institution’s exposure that is eligible for the 45 % risk weight, the amount of 80 % of the property value shall be reduced by the amount of the more senior liens not held by the institution.
Where liens not held by the institution rank pari passu with the lien held by the institution, to determine the part of the institution’s exposure that is eligible for the 45 % risk weight, the amount of 80 % of the property value, reduced by the amount of any more senior liens not held by the institution, shall be reduced by the product of:
(a)
80 % of the property value, reduced by the amount of more senior liens, if any, both held by the institution and held by other institutions; and
(b)
the amount of liens not held by the institution that rank pari passu with the lien held by the institution divided by the sum of all pari passu liens.
8. For the purposes of paragraph 5 of this Article, all of the following conditions shall be met:
(a)
the exposures qualify for the treatment pursuant to Article 125(1);
(b)
the qualifying exposures are risk weighted in accordance with Part Three, Title II, Chapter 3;
(c)
the residential property securing the qualifying exposures is located in the Member State that has exercised the discretion;
(d)
over the last eight years the institution’s losses in any given year, as reported by the institution pursuant to Article 430a(1), points (a) and (c), or pursuant to Article 101(1), points (a) and (c), in the version of those points applicable on 27 June 2021, on the part of the exposures secured by mortgages on residential property up to the lower of the pledged amount and 55 % of the property value, unless otherwise determined under Article 124(9), do not exceed on average 0,25 % of the sum of the exposure values of all outstanding exposures secured by mortgages on residential property;
(e)
for the qualifying exposures the institution has the following enforceable rights in the event of the default or non-payment of the obligor:
(i)
a right on the residential property securing the exposure or the right to take a mortgage on the residential property in accordance with Article 108(5), point (g);
(ii)
a right on other assets and income of the obligor either contractually or by applicable national law;
(f)
the competent authority has verified that the conditions set out in points (a) to (e) are met.
9. Where the discretion referred to in paragraph 5 has been exercised and provided that all conditions set out in paragraph 8 are met, institutions may assign the following risk weights to any remaining part of the exposures secured by mortgages on residential property referred to in paragraph 5, point (b), until 31 December 2032:
(a)
52,5 % during the period from 1 January 2030 to 31 December 2030;
(b)
60 % during the period from 1 January 2031 to 31 December 2031;
(c)
67,5 % during the period from 1 January 2032 to 31 December 2032.
10. Where Member States exercise the discretion referred to in paragraph 5, they shall notify EBA and substantiate their decision. Competent authorities shall notify the details of all verifications referred to in paragraph 8, point (f), to EBA.
11. EBA shall monitor the use of the transitional treatment laid down in paragraph 5 and shall submit a report with its findings on the appropriateness of the associated risk weights to the Commission by 31 December 2028.
On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.
12. Any extension of any of the transitional arrangements referred to in paragraphs 3, 5 and 9 of this Article, and in Articles 495b(1), 495c(1) and 495d(1), shall be limited to four years, and shall be substantiated with an evaluation equivalent to those referred to in those Articles.
13. By way of derogation from Article 92(5), point (a)(iii) or (b)(ii), and without prejudice to the derogation set out in Article 92(3), second subparagraph, for exposures that are risk weighted using the SEC-IRBA or the Internal Assessment Approach in accordance with Article 92(4), where the part of the standardised total risk-weighted exposure amount for credit risk, dilution risk, counterparty credit risk or for market risk arising from the trading book business is calculated using the SEC-SA in accordance with Article 261 or 262, institutions shall, until 31 December 2032, apply the following factor p:
(a)
p = 0,25 for a position in a securitisation to which Article 262 applies;
(b)
p = 0,5 for a position in a securitisation to which Article 261 applies.’
;
(238)
Article 468 is amended as follows:
(a)
the title is replaced by the following:
‘ Temporary treatment of unrealised gains and losses measured at fair value through other comprehensive income ’;
(b)
paragraphs 1 and 2 are replaced by the following:
‘1. By way of derogation from Article 35, until 31 December 2025 (the “period of temporary treatment”), institutions may remove from the calculation of their Common Equity Tier 1 items the amount A, determined in accordance with the following formula:
A = a ∙ f
where:
a
= the amount of unrealised gains and losses accumulated since 31 December 2019 accounted for as “fair value changes of debt instruments measured at fair value through other comprehensive income” in the balance sheet, corresponding to exposures to central governments, to regional governments or to local authorities referred to in Article 115(2) of this Regulation and to public sector entities referred to in Article 116(4) of this Regulation, excluding those financial assets that are credit-impaired as defined in Appendix A to the Annex to Commission Regulation (EC) No 1126/2008 (“Annex relating to IFRS 9”); and
f
= the factor applicable for each reporting year during the period of temporary treatment in accordance with paragraph 2.
2. Institutions shall apply the factor f with a value equal to 1 until 31 December 2025 to calculate the amount A referred to in paragraph 1.’
;
(239)
in Article 493, paragraph 3 is amended as follows:
(a)
point (a) is replaced by the following:
‘(a)
covered bonds as referred to in Article 129;’
;
(b)
point (i) is replaced by the following:
‘(i)
50 % of bucket 4 off-balance-sheet documentary credits and of bucket 3 off-balance-sheet undrawn credit facilities referred to in Annex I with an original maturity of up to and including one year and subject to the competent authorities’ agreement, 80 % of guarantees other than loan guarantees which have a legal or regulatory basis and are given for their members by mutual guarantee schemes possessing the status of credit institutions;’
;
(240)
the following article is inserted:
‘Article 494d
Reversion to less sophisticated approaches
By way of derogation from Article 149, an institution may from 9 July 2024 until 10 July 2027, revert to less sophisticated approaches for one or more of the exposure classes referred to in Article 147(2), where all of the following conditions are met:
(a)
the institution already existed on 8 July 2024 and was authorised by its competent authority to treat those exposure classes under the IRB Approach;
(b)
the institution requests a reversion to a less sophisticated approach only once during that three-year period;
(c)
the request to revert to a less sophisticated approach is not made with a view to engaging in regulatory arbitrage;
(d)
the institution has formally notified the competent authority that it wishes to revert to a less sophisticated approach for those exposure classes at least six months before it effectively does revert to that approach;
(e)
the competent authority has not objected to the institution’s request to such reversion within three months of the receipt of the notification referred to in point (d).’
;
(241)
Article 495 is replaced by the following:
‘Article 495
Treatment of equity exposures under the IRB Approach
1. By way of derogation from Article 107(1), institutions that have been granted permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures shall, until 31 December 2029 and without prejudice to Article 495a(3), calculate the risk-weighted exposure amount for each equity exposure for which they have been granted permission to apply the IRB Approach as the higher of the following:
(a)
the risk-weighted exposure amount calculated in accordance with Article 495a(1) and (2);
(b)
the risk-weighted exposure amount calculated under this Regulation in the version applicable on 8 July 2024.
2. Instead of applying the treatment laid down in paragraph 1, institutions that have been granted permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures may apply the treatment set out in Article 133 to all their equity exposures at any time until 31 December 2029.
Where institutions apply the first subparagraph of this paragraph, Article 495a(1) and (2) shall not apply.
For the purposes of this paragraph, the conditions to revert to the use of less sophisticated approaches set out in Article 149 shall not apply.
3. Institutions applying the treatment laid down in paragraph 1 of this Article shall calculate the expected loss amount in accordance with Article 158(7), (8) or (9), as applicable, in the version of those paragraphs applicable on 8 July 2024 and apply Article 36(1), point (d), and Article 62, point (d), as applicable, in the version of those points applicable on 8 July 2024 where the risk-weighted exposure amount calculated pursuant to paragraph 1, point (b), of this Article is higher than the risk-weighted exposure amount calculated pursuant to paragraph 1, point (a), of this Article.
4. Where institutions request permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures, competent authorities shall not grant such permission after 31 December 2024.’
;
(242)
the following articles are inserted:
‘Article 495a
Transitional arrangements for equity exposures
1. By way of derogation from the treatment laid down in Article 133(3), equity exposures shall be assigned the higher of the risk weight applicable on 8 July 2024, capped at 250 %, and the following risk-weights:
(a)
100 % during the period from 1 January 2025 to 31 December 2025;
(b)
130 % during the period from 1 January 2026 to 31 December 2026;
(c)
160 % during the period from 1 January 2027 to 31 December 2027;
(d)
190 % during the period from 1 January 2028 to 31 December 2028;
(e)
220 % during the period from 1 January 2029 to 31 December 2029.
2. By way of derogation from the treatment laid down in Article 133(4), equity exposures shall be assigned the higher of the risk weight applicable on 8 July 2024 and the following risk weights:
(a)
100 % during the period from 1 January 2025 to 31 December 2025;
(b)
160 % during the period from 1 January 2026 to 31 December 2026;
(c)
220 % during the period from 1 January 2027 to 31 December 2027;
(d)
280 % during the period from 1 January 2028 to 31 December 2028;
(e)
340 % during the period from 1 January 2029 to 31 December 2029.
3. By way of derogation from Article 133, institutions may continue to assign the same risk weight that was applicable on 8 July 2024 to equity exposures, including the part of the exposures not deducted from the own funds in accordance with Article 471 in the version of that Article applicable on 27 October 2021, to entities in which they have been a shareholder on 27 October 2021 for six consecutive years and over which they, or together with the network the institutions belong to, exercise significant influence or control within the meaning of Directive 2013/34/EU, or of the accounting standards to which an institution is subject under Regulation (EC) No 1606/2002, or as a result of a similar relationship between any natural or legal person or network of institutions and an undertaking, or where an institution has the capacity to appoint at least one member of the management body of the entity.
Article 495b
Transitional arrangements for specialised lending exposures
1. By way of derogation from Article 161(4), the LGD input floors applicable to specialised lending exposures treated under the IRB Approach where own estimates of LGD are used, shall be the applicable LGD input floors provided for in Article 161(4), multiplied by the following factors:
(a)
50 % during the period from 1 January 2025 to 31 December 2027;
(b)
80 % during the period from 1 January 2028 to 31 December 2028;
(c)
100 % during the period from 1 January 2029 to 31 December 2029.
2. EBA shall prepare a report on the appropriate calibration of risk parameters, including the haircut parameter, applicable to specialised lending exposures under the IRB Approach, and in particular on own estimates of LGD and LGD input floors for each specific category of specialised lending exposures as referred to in Article 147(8). EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for different samples of institutions with different business and risk profiles. EBA shall recommend specific calibrations of risk parameters, including the haircut parameter, that would reflect the specific and different risk profile for each specific category of specialised lending exposures.
EBA shall submit that report to the European Parliament to the Council and to the Commission by 10 July 2026.
On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.
3. By way of derogation from Article 122a(3), point (a), specialised lending exposures as referred to in that point for which a directly applicable credit assessment by a nominated ECAI is not available may, until 31 December 2032, be assigned a risk weight of 80 %, where the adjustment to own funds requirements for credit risk referred to in Article 501a is not applied and the exposure is deemed to be of high quality when taking into account all of the following criteria:
(a)
the obligor can meet its financial obligations even under severely stressed conditions due to the presence of all of the following features:
(i)
adequate exposure-to-value of the exposure;
(ii)
conservative repayment profile of the exposure;
(iii)
commensurate remaining lifetime of the assets upon full pay-out of the exposure or alternatively recourse to a protection provider with high creditworthiness;
(iv)
low refinancing risk of the exposure by the obligor or that risk is adequately mitigated by a commensurate residual asset value or recourse to a protection provider with high creditworthiness;
(v)
the obligor has contractual restrictions over its activity and funding structure;
(vi)
the obligor uses derivatives only for risk-mitigation purposes;
(vii)
material operating risks are properly managed;
(b)
the contractual arrangements on the assets provide lenders with a high degree of protection, including the following features:
(i)
the lenders have a legally enforceable first-ranking right over the assets financed and, where applicable, over the income that they generate;
(ii)
there are contractual restrictions on the ability of the obligor to make changes to the asset which would have a negative impact on its value;
(iii)
where the asset is under construction, the lenders have a legally enforceable first-ranking right over the assets and the underlying construction contracts;
(c)
the assets being financed meet all of the following standards to operate in a sound and effective manner:
(i)
the technology and design of the asset are tested;
(ii)
all necessary permits and authorisations for the operation of the assets have been obtained;
(iii)
where the asset is under construction, the obligor has adequate safeguards on the agreed specifications, budget and completion date of the asset, including strong completion guarantees or the involvement of an experienced constructor and adequate contract provisions for liquidated damages.
4. EBA shall prepare a report, analysing the following:
(a)
the evolution of the trends and conditions in markets for object finance in the Union;
(b)
the effective riskiness of the object finance exposures over a full economic cycle;
(c)
the impact on own funds requirements of the treatment set out in Article 122a(3), point (a), for object finance exposures, without taking into account Article 465(1);
(d)
the appropriateness of the definition of the sub-class of “high quality object finance” and to assign to that sub-class of exposures a different prudential treatment.
EBA shall submit that report to the European Parliament, to the Council and to the Commission by 31 December 2030.
On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.
Article 495c
Transitional arrangements for leasing exposures as a credit risk mitigation technique
1. By way of derogation from Article 230, the applicable value of Hc corresponding to “other physical collateral” for exposures referred to in Article 199(7) where the asset leased corresponds to the “other physical collateral” type of funded credit protection, shall be the value of Hc for “other physical collateral” provided for in Article 230(2), Table 1, multiplied by the following factors:
(a)
50 % during the period from 1 January 2025 to 31 December 2027;
(b)
80 % during the period from 1 January 2028 to 31 December 2028;
(c)
100 % during the period from 1 January 2029 to 31 December 2029.
2. EBA shall prepare a report on the appropriate calibrations of risk parameters associated with leasing exposures under the IRB Approach, and of risk weights under the Standardised Approach, and in particular on the LGDs and Hc provided for in Article 230. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for exposures associated with different types of properties leased and different types of institutions practicing leasing activities.
EBA shall submit that report to the European Parliament, to the Council and to the Commission by 10 July 2027.
On the basis of that report, and taking into account the internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2028.
Article 495d
Transitional arrangements for unconditional cancellable commitments
1. By way of derogation from Article 111(2), institutions shall calculate the exposure value of an off-balance-sheet item in the form of unconditionally cancellable commitment by multiplying the percentage provided for in that Article by the following factors:
(a)
0 % during the period from 1 January 2025 to 31 December 2029;
(b)
25 % during the period from 1 January 2030 to 31 December 2030;
(c)
50 % during the period from 1 January 2031 to 31 December 2031;
(d)
75 % during the period from 1 January 2032 to 31 December 2032.
2. EBA shall prepare a report assessing whether the derogation referred to in paragraph 1, point (a), should be extended beyond 31 December 2032 and specifying, where necessary, the conditions under which that derogation should be maintained.
EBA shall submit that report to the European Parliament, to the Council and to the Commission by 31 December 2028.
On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the impact of those standards on financial stability, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.
Article 495e
Transitional arrangements for ECAI credit assessments of institutions
By way of derogation from Article 138, point (g), competent authorities may allow institutions to continue using an ECAI credit assessment in relation to an institution which incorporates assumptions of implicit government support until 31 December 2029.
Article 495f
Transitional arrangements for property revaluation requirements
By way of derogation from Article 229(1), points (a) to (d), for exposures secured by residential property or commercial immovable property granted before 1 January 2025, institutions may continue to value residential property or commercial immovable property at or less than the market value, or in those Member States that have provided for rigorous criteria for the assessment of the mortgage lending value in statutory or regulatory provisions, the mortgage lending value of that property, until a review of the property value is required in accordance with Article 208(3), or 31 December 2027, whichever is earlier.
Article 495g
Transitional arrangements for certain public guarantees schemes
By way of derogation from Articles 183(1) and 213(1), a guarantee that can be cancelled in the event of fraud by the obligor or the extent of credit protection of which can be diminished in such event, shall be considered to meet the requirements referred to in Article 183(1), point (d), and in Article 213(1), point (c), where the guarantee was provided by an entity referred to in Article 214(2), point (a), no later than 31 December 2024.
Article 495h
Transitional arrangements for the use of the alternative internal model approach for market risk
By way of derogation from Article 325az(2), point (d), institutions may use, until 1 January 2026, the alternative internal model approach to calculate their own funds requirements for market risk for trading desks that do not meet the requirements laid down in Article 325bg.’
;
(243)
Article 500 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
in the first subparagraph, point (b) is replaced by the following:
‘(b)
the dates of the disposals of defaulted exposures are after 23 November 2016 but not later than 31 December 2024;’
;
(ii)
the second subparagraph is replaced by the following:
‘The adjustment referred to in the first subparagraph may only be carried out until 31 December 2024 and its effects may last for as long as the corresponding exposures are included in the institution’s own LGD estimates.’
;
(b)
the following paragraph is added:
‘3. The Commission shall, by 31 December 2026, and every two years thereafter, assess whether the level of defaulted exposures in the balance sheets of the institutions has increased significantly, whether it expects a significant deterioration in the institutions’ asset quality, and whether the degree of development of secondary markets for defaulted exposures is not adequate to ensure efficient disposals of defaulted exposures by institutions, also taking into consideration the regulatory developments on securitisation.
The Commission shall review the appropriateness of the derogation set out in paragraph 1 and shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to extend, reintroduce or amend, as needed, the adjustment provided for in this Article.’
;
(244)
Article 500a is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. By way of derogation from Article 114(2), until 31 December 2026, for exposures to the central governments and central banks of Member States, where those exposures are denominated and funded in the domestic currency of another Member State, the following apply:
(a)
until 31 December 2024, the risk weight applied to the exposure values shall be 0 % of the risk weight assigned to those exposures in accordance with Article 114(2);
(b)
in 2025, the risk weight applied to the exposure values shall be 20 % of the risk weight assigned to those exposures in accordance with Article 114(2);
(c)
in 2026, the risk weight applied to the exposure values shall be 50 % of the risk weight assigned to those exposures in accordance with Article 114(2).’
;
(b)
in paragraph 2, points (a), (b) and (c) are replaced by the following:
‘(a)
100 % of the institution’s Tier 1 capital until 31 December 2025;
(b)
75 % of the institution’s Tier 1 capital between 1 January and 31 December 2026;
(c)
50 % of the institution’s Tier 1 capital between 1 January and 31 December 2027.’
;
(245)
Article 500c is replaced by the following:
‘Article 500c
Exclusion of overshootings from the calculation of the back-testing addend in view of the COVID-19 pandemic
By way of derogation from Article 325bf, competent authorities may, in exceptional circumstances and in individual cases, permit institutions to exclude the overshootings evidenced by the institution’s back-testing on hypothetical or actual changes from the calculation of the addend set out in Article 325bf, provided that those overshootings do not result from deficiencies in the internal model and provided that they occurred between 1 January 2020 and 31 December 2021.’
;
(246)
in Article 501(2), points (a) and (b) are replaced by the following:
‘(a)
the exposure to an SME shall be included either in the retail or in the corporates or secured by mortgages on immovable property exposure classes but excluding ADC exposures;
(b)
an SME shall have the meaning laid down in Article 5, point (9);’
;
(247)
in Article 501a, paragraph 1 is amended as follows:
(a)
point (a) is replaced by the following:
‘(a)
the exposure is assigned to the exposure class referred to in Article 112, point (g), or to any of the exposure classes referred to in Article 147(2), point (c)(i), (ii) or (iii), with the exclusion of exposures in default;’
;
(b)
point (f) is replaced by the following:
‘(f)
the obligor’s refinancing risk is low or adequately mitigated, taking into account any subsidies, grants or funding provided by one or more of the entities listed in paragraph 2, points (b)(i) and (ii);’
;
(c)
point (o) is replaced by the following:
‘(o)
for exposures originated after 1 January 2025 the obligor has carried out an assessment that the assets being financed contribute positively to one or more of the environmental objectives set out in Article 9 of Regulation (EU) 2020/852 and do not significantly harm the other objectives set out in that Article, or that the assets being financed do not significantly harm any of the environmental objectives set out in that Article.’
;
(248)
Article 501c is replaced by the following:
‘Article 501c
Prudential treatment of exposures to environmental or social factors
1. EBA, after consulting the ESRB, shall, on the basis of available data, assess whether the dedicated prudential treatment of exposures related to assets or liabilities, subject to the impact of environmental or social factors is to be adjusted. In particular, EBA shall assess:
(a)
the availability and accessibility of reliable and consistent ESG data for each exposure class determined in accordance with Part Three, Title II;
(b)
in consultation with EIOPA, the feasibility of introducing a standardised methodology to identify and qualify the exposures, for each exposure class determined in accordance with Part Three, Title II, based on a common set of principles to ESG risk classification, using the information on transition risk and physical risk indicators made available by sustainability disclosure reporting frameworks adopted in the Union and where available internationally, the guidance and conclusions coming from the supervisory stress-testing or scenario analysis of climate-related financial risks conducted by EBA or the competent authorities and if appropriately reflecting the ESG risks, the relevant ESG score of the credit risk rating by a nominated ECAI;
(c)
the effective riskiness of exposures related to assets and activities subject to the impact of environmental or social factors compared to the riskiness of other exposures and the possible additional and more comprehensive revisions to the framework that should be considered, taking into consideration the developments agreed at international level by the BCBS;
(d)
the potential short, medium and long-term effects of an adjusted dedicated prudential treatment of exposures related to assets and activities subject to the impact of environmental or social factors on financial stability and bank lending in the Union;
(e)
the targeted enhancements that could be considered within the current prudential framework.
2. EBA shall submit successive reports on its findings to the European Parliament, to the Council and to the Commission by the following dates:
(a)
9 July 2024 for the assessments required under paragraph 1, point (e);
(b)
31 December 2024 for the assessments required under paragraph 1, points (a) and (b);
(c)
31 December 2025 for the assessments required under paragraph 1, points (c) and (d).
On the basis of those EBA reports, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2026.’
;
(249)
the following article is inserted:
‘Article 501d
Transitional provisions on the prudential treatment of crypto-assets
1. By 30 June 2025, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to introduce a dedicated prudential treatment for crypto-asset exposures, taking into account the international standards and Regulation (EU) 2023/1114. That legislative proposal shall include the following:
(a)
criteria for assigning crypto-assets to different crypto-asset categories based on their risk characteristics and compliance with specific conditions;
(b)
specific own funds requirements for all risks entailed by different crypto-assets;
(c)
an aggregate limit for exposures to specific types of crypto-assets;
(d)
specific leverage ratio requirements for crypto-asset exposures;
(e)
specific supervisory powers as regards crypto-asset exposure assignment, monitoring and calculation of the own funds requirements;
(f)
specific liquidity requirements for crypto-asset exposures;
(g)
disclosure and reporting requirements.
2. Until the date of application of the legislative act referred to in paragraph 1, institutions shall calculate their own funds requirements for crypto-asset exposures as follows:
(a)
crypto-asset exposures to tokenised traditional assets shall be treated as exposures to the traditional assets that they represent;
(b)
exposures to asset-referenced tokens whose issuers comply with Regulation (EU) 2023/1114 and that reference one or more traditional assets shall be assigned a risk weight of 250 %;
(c)
crypto-asset exposures other than those referred to in points (a) and (b) shall be assigned a risk weight of 1 250 %.
By way of derogation from the first subparagraph, point (a), crypto-asset exposures to tokenised traditional assets whose values depend on any other crypto-assets shall be assigned to point (c).
3. The value of an institution’s total exposure to crypto-assets other than those referred to in paragraph 1, points (a) and (b), shall not exceed 1 % of the institution’s Tier 1 capital.
4. An institution that exceeds the limit set out in paragraph 3 shall immediately notify the competent authority of the breach and shall demonstrate to the satisfaction of the competent authority a timely return to compliance.
5. EBA shall develop draft regulatory technical standards to specify the technical elements necessary for institutions to calculate their own funds requirements in accordance with the approaches set out in paragraph 2, points (b) and (c), including how to calculate the value of the exposures and how to aggregate short and long exposures for the purposes of paragraphs 2 and 3.
In developing those draft regulatory technical standards, EBA shall take into consideration the related internationally agreed standards developed by the BCBS as well as existing authorisations in the Union under Regulation (EU) 2023/1114.
EBA shall submit those draft regulatory technical standards to the Commission by 10 July 2025.
Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.
6. For the calculation of their own funds requirements for crypto-asset exposures, institutions shall not apply the deduction referred to in Article 36(1), point (b).’
;
(250)
Articles 505 and 506 are replaced by the following:
‘Article 505
Review of agricultural financing
1. By 31 December 2030, EBA shall prepare a report on the impact of the requirements of this Regulation on agricultural financing, including on:
(a)
the appropriateness of a dedicated risk weight for own funds requirements for credit risk calculated in accordance with Part Three, Title II, for exposures to an agricultural enterprise;
(b)
where applicable, prudentially justified criteria for the application of such a dedicated risk weight, including farming practices, as well as the inclusion of exposures in the corporates, retail or secured by mortgages on immovable property exposure classes;
(c)
the alignment with the “farm to fork” strategy set out in the communication of the Commission of 20 May 2020 entitled “A Farm to Fork Strategy for a fair, healthy and environmentally-friendly food system” and the respective environmental impact within the meaning of Regulation (EU) 2020/852, in particular with the indicators as collected in the Union’s Farm Accountancy Data Network, showing contribution scores with regard to:
(i)
net greenhouse gas emissions per hectare;
(ii)
pesticides and fertilisers usage per hectare;
(iii)
soil’s minerals efficiency ratios, including carbon, ammonia, phosphate and nitrogen per hectare;
(iv)
water use efficiency;
(v)
a confirmation of positive impact on the indicators referred to in points (i) to (iv) of this point with an organic production logo of the European Union referred to in Regulation (EU) 2018/848 of the European Parliament and of the Council (*15).
2. Taking into account the EBA report referred to in paragraph 1, the Commission shall submit the report to the European Parliament and to the Council. Where appropriate, that report shall be accompanied by a legislative proposal to amend this Regulation in order to mitigate its negative effects on agricultural financing.
3. EBA shall also prepare an intermediate report on the impact of the requirements of this Regulation on agricultural financing by 31 December 2027.
Article 506
Credit risk — credit insurance
By 30 June 2024, EBA shall, in close cooperation with EIOPA, report to the Commission on the eligibility and use of credit insurance policy as a credit risk mitigation technique, including on:
(a)
the appropriateness of the associated risk parameters referred to in Part Three, Title II, Chapters 3 and 4;
(b)
an analysis of the effective and observed riskiness of credit risk exposures where a credit insurance was recognised as a credit risk mitigation technique;
(c)
the consistency of own funds requirements laid down in this Regulation with the outcomes of the analysis under points (a) and (b).
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal to amend the treatment applicable to credit insurance referred to in Part Three, Title II, by 31 December 2024.
(*15) Regulation (EU) 2018/848 of the European Parliament and of the Council of 30 May 2018 on organic production and labelling of organic products and repealing Council Regulation (EC) No 834/2007 (OJ L 150, 14.6.2018, p. 1).’;"
(251)
the following articles are inserted:
‘Article 506c
Credit risk — interaction between Common Equity Tier 1 capital reductions and credit risk parameters
By 31 December 2026, EBA shall report to the Commission on the consistency between the current measurement of credit risk and the individual credit risk parameters and on the treatment of any adjustments for the purpose of the computation of the IRB shortfall or IRB excess as referred to in Article 159, and on its consistency with the determination of the exposure value in accordance with Article 166 and with the estimation of LGD.
That report shall consider the maximum possible economic loss arising from a default event along with its achieved coverage in terms of Common Equity Tier 1 capital reductions, taking into account any accounting-based Common Equity Tier 1 capital reductions, including from expected credit losses or fair value adjustments, and any discounts on received exposures, and their implications for regulatory deductions.
Article 506d
Prudential treatment of securitisation
1. By 31 December 2026, EBA, in close collaboration with ESMA, shall report to the Commission on the prudential treatment of securitisation transactions, differentiating between different types of securitisations, including synthetic securitisations, between originators and investors, and between STS and non-STS transactions.
2. In particular, EBA shall monitor the use of the transitional arrangement referred to in Article 465(13) and assess the extent to which the application of the output floor to securitisation exposures would affect the capital reduction obtained by originator institutions in transactions for which a significant risk transfer has been recognised, would excessively reduce the risk sensitivity and would affect the economic viability of new securitisation transactions. In such cases of a reduction of risk sensitivities, EBA may consider proposing a downward recalibration of the non-neutrality factors for transactions for which a significant risk transfer has been recognised. EBA shall also assess the appropriateness of the non-neutrality factors under both the SEC-SA and the SEC-IRBA, taking into account the historic credit performance of securitisation transactions in the Union and the reduced model and agency risks of the securitisation framework.
3. On the basis of the report referred to in paragraph 1 and taking into account related internationally agreed standards developed by the BCBS the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.
Article 506e
Recognition of capped or floored unfunded credit protection
1. By 10 July 2026, EBA shall submit a report to the Commission on the following:
(a)
the conditions that guarantees featuring caps or floors determined at the level of a portfolio of exposures (“portfolio guarantees”) need to meet to qualify as a securitisation;
(b)
the regulatory treatment applicable under Part Three, Title II, Chapter 4, to portfolio guarantees where those do not qualify as a securitisation;
(c)
the application of the requirements set out in Part Three, Title II, Chapter 5, of this Regulation and in Chapter 2 of Regulation (EU) 2017/2402 for portfolio guarantees where those guarantees qualify as a securitisation;
(d)
the application of Article 234 for single guarantees that lead to tranching.
2. In the report referred to in paragraph 1, EBA shall assess in particular the following:
(a)
in relation to paragraph 1, point (a), the conditions under which portfolio guarantees give rise to a tranched transfer of risk;
(b)
in relation to paragraph 1, point (b):
(i)
the relevant eligibility criteria of portfolio guarantees under Part Three, Title II, Chapter 4;
(ii)
the application of the requirements set out in Part Three, Title II, Chapter 4;
(c)
in relation to paragraph 1, point (d), the application of the requirements set out in Chapter 2 of Regulation (EU) 2017/2402 and in Part Three, Title II, Chapter 5, of this Regulation.
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.
Article 506f
Prudential treatment of securities financing transactions
By 10 July 2026, EBA shall report to the Commission on the impact of the new framework for securities financing transactions in terms of own funds requirements attributed to the corresponding securities financing transactions which are by nature very short-term activities, with a particular focus on its possible impact on sovereign debt markets in terms of market making capacity and cost.
EBA shall assess whether a recalibration of the associated risk weights in the standardised approach is appropriate, given the associated risks with respect to short-term maturities, specifically for residual maturities below one year.
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.’
;
(252)
in Article 514, the following paragraph is added:
‘2. On the basis of the EBA report referred to in paragraph 1 and taking due account of the implementation in third countries of the internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to amend the approaches set out in Part Three, Title II, Chapter 6, Sections 3, 4 and 5.’
;
(253)
the following article is inserted:
‘Article 518c
Review of the framework for prudential requirements
By 31 December 2028, the Commission shall assess the overall situation of the banking system in the single market, in close cooperation with EBA and the ECB, and report to the European Parliament and to the Council on the appropriateness of the Union regulatory and supervisory frameworks for banking.
That report shall take stock of the reforms to the banking sector which took place after the great financial crisis and assess whether these ensure an adequate level of depositor protection and safeguard financial stability at Member State, banking union and Union level.
That report shall also consider all banking union dimensions, as well as the implementation of the output floor as part of capital and liquidity requirements more generally. In that regard, the Commission shall duly consider the corresponding statements and conclusions on the banking union of both the European Parliament and the European Council.’
;
(254)
the following articles are inserted:
‘Article 519d
Minimum haircut floor framework for securities financing transactions
1. EBA, in close cooperation with ESMA, shall, by 10 January 2027, report to the Commission on the appropriateness of implementing in Union law the minimum haircut floor framework for securities financing transactions to address the potential build-up of leverage outside the banking sector.
2. The report referred to in paragraph 1 shall consider all of the following:
(a)
the degree of leverage outside the banking system in the Union and the extent to which the minimum haircut floor framework could reduce that leverage if it became excessive;
(b)
the materiality of the securities financing transactions held by institutions in the Union that are subject to the minimum haircut floor framework, including the breakdown of those securities financing transactions which do not comply with the minimum haircut floors;
(c)
the estimated impact of the minimum haircut floor framework for institutions in the Union under the two implementation approaches recommended by the Financial Stability Board, namely a market regulation or more punitive own funds requirement under this Regulation, under a scenario in which institutions in the Union would not adjust haircuts to their securities financing transactions to comply with minimum haircut floors, and the estimated impact of the minimum haircut floor framework under an alternative scenario in which institutions in the Union would adjust those haircuts to comply with minimum haircut floors;
(d)
the main drivers behind those estimated impacts, as well as the potential unintended consequences of introducing a minimum haircut floor framework on the functioning of the securities financing transaction markets in the Union;
(e)
the implementation approach that would be most effective in meeting the regulatory objectives of the minimum haircut floor framework in light of the considerations referred to in points (a) to (d) and taking into account the level playing field across the financial sector in the Union.
3. On the basis of the report referred to in paragraph 1 and taking due account of the Financial Stability Board recommendation to implement the minimum haircut floor framework for securities financing transactions, as well as the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 10 January 2028.
Article 519 e
Operational risk
By 10 January 2028, EBA shall report to the Commission on the following:
(a)
the use of insurance in the context of the calculation of the own funds requirement for operational risk;
(b)
whether the recognition of insurance recoveries might lead to regulatory arbitrage by reducing the annual operational risk loss without a commensurate reduction in the actual operational loss exposure;
(c)
whether the recognition of insurance recoveries has a different impact on the appropriate coverage of recurring losses and of potential tail losses;
(d)
the availability and quality of data used by institutions when calculating their own funds requirement for operational risk.
On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 10 January 2029.
Article 519f
Proportionality
EBA shall prepare a report assessing the overall prudential framework for small and non-complex institutions, in particular:
(a)
assessing those requirements also in relation to banking groups and specific business models;
(b)
taking into account the relevance of small and non-complex institutions at institution level and by region for maintaining financial stability and credit provision in local communities.
In considering options for changes in the prudential framework, EBA shall base itself on the overarching principle that any simplified requirements are to be more conservative.
EBA shall submit that report to the Commission by 31 December 2027.’
;
(255)
Annex I is replaced by the text set out in the Annex to this Regulation.
Article 2
Entry into force and application
This Regulation 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 1 January 2025.
However, the following points of Article 1 of this Regulation shall apply from 9 July 2024: point (1)(a)(iv); point (1)(b); points (2), (3) and (4); point (6)(f); point (8)(c); point (11) concerning Article 34(4) of Regulation (EU) No 575/2013; point (30)(d); point (34) concerning Article 104(9) of Regulation (EU) No 575/2013; point (35)(a); point 37 concerning Article 104c(4) of Regulation (EU) No 575/2013; point (42) concerning Article 111(8) of Regulation (EU) No 575/2013; point (52) concerning Article 122a(4) of Regulation (EU) No 575/2013; point (53) concerning Article 123(1), third subparagraph, of Regulation (EU) No 575/2013; point (55) concerning Article 124(11), (12) and (14) of Regulation (EU) No 575/2013; point (56) concerning Article 126a(3) of Regulation (EU) No 575/2013; points (57) and (65); point (70)(c) concerning Article 143(5) of Regulation (EU) No 575/2013; point (71)(b); point (72)(i); point 75(d); point (78)(e); point (81); point (98)(b); point (102)(d); point (104)(c); point (105)(c); point (106)(e); point (135)(c); point (152)(b)(ii); point (155) concerning Article 314(9) and (10), Article 315(3), Article 316(3), Article 317(9) and (10), Article 320(3), Article 321(2) and Article 323(2) of Regulation (EU) No 575/2013; point (156)(b); point (159)(c) concerning Article 325c(8) of Regulation (EU) No 575/2013; point (160)(c) concerning Article 325j(7) of Regulation (EU) No 575/2013; point (164)(b); point (178)(e); point (180); point (182)(d); point (183)(c); point (184)(b)(iii); point (198)(c); point (201) concerning Article 383a(4) and (5) of Regulation (EU) No 575/2013; point (204); point (205)(b)(i); points (214)(a) and (c); points (222) and (223); point (229) concerning Article 449a(3) of Regulation (EU) No 575/2013; points (232), (235), (236) and (238); point (239)(a); point (242) concerning Article 495b(2) and (4) and Article 495c(2) of Regulation (EU) No 575/2013; points (243), (244), (248) and (249); point (250) concerning Article 506 of Regulation (EU) No 575/2013; point (251) concerning Articles 506e and 506f of Regulation (EU) No 575/2013; points (252), (253) and (254).
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 31 May 2024.
For the European Parliament
The President
R. METSOLA
For the Council
The President
H. LAHBIB
(1) OJ C 233, 16.6.2022, p. 14.
(2) OJ C 290, 29.7.2022, p. 40.
(3) Position of the European Parliament of 24 April 2024 (not yet published in the Official Journal) and decision of the Council of 30 May 2024.
(4) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).
(5) Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).
(6) Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48).
(7) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).
(8) Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ L 302, 17.11.2009, p. 1).
(9) Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements, and Regulation (EU) No 648/2012 (OJ L 150, 7.6.2019, p. 1).
(10) OJ L 123, 12.5.2016, p. 1.
(11) Regulation (EU) 2019/630 of the European Parliament and of the Council of 17 April 2019 amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures (OJ L 111, 25.4.2019, p. 4).
(12) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
(13) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
(14) Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (OJ L 150, 9.6.2023, p. 40).
ANNEX
‘ANNEX I
Classification of off-balance-sheet items
Bucket
Items
1
(a)
Credit derivatives and general guarantees of indebtedness, including standby letters of credit serving as financial guarantees for loans and securities, and acceptances, including endorsements with the character of acceptances, as well as any other direct credit substitutes;
(b)
Sale and repurchase agreements and asset sales with recourse where the credit risk remains with the institution;
(c)
Securities lent by the institution or securities posted by the institution as collateral, including instances where those arise out of repo-style transactions;
(d)
Forward asset purchases, forward deposits and partly paid shares and securities, which represent commitments with certain drawdown;
(e)
Off-balance-sheet items constituting a credit substitute where not explicitly included in any other category;
(f)
Other off-balance-sheet items carrying similar risk and as communicated to EBA.
2
(a)
Note issuance facilities (NIFs) and revolving underwriting facilities (RUFs) regardless of the maturity of the underlying facility;
(b)
Performance bonds, bid bonds, warranties and standby letters of credit related to particular transactions and similar transaction-related contingent items, excluding trade finance off-balance-sheet items referred to in bucket 4;
(c)
Other off-balance-sheet items carrying similar risk, as communicated to EBA.
3
(a)
The undrawn amount of commitments, regardless of the maturity of the underlying facility, unless they fall under another category;
(b)
Other off-balance-sheet items carrying similar risk, as communicated to EBA.
4
(a)
Trade finance off-balance-sheet items:
(i)
warranties, including tender and performance bonds and associated advance payment and retention guarantees, and guarantees not having the character of credit substitutes;
(ii)
irrevocable standby letters of credit not having the character of credit substitutes;
(iii)
short-term, self-liquidating trade letters of credit arising from the movement of goods, in particular documentary credits collateralised by the underlying shipment, in case of an issuing institution or a confirming institution;
(b)
Other off-balance-sheet items carrying similar risk, as communicated to EBA.
5
(a)
The undrawn amount of unconditionally cancellable commitments;
(b)
The undrawn amount of retail credit lines for which the terms permit the institution to cancel them to the full extent allowable under consumer protection and related legal acts;
(c)
Undrawn credit facilities for tender and performance guarantees which may be cancelled unconditionally at any time without prior notice, or that do effectively provide for automatic cancellation due to deterioration in a borrower’s creditworthiness;
(d)
Other off-balance-sheet items carrying similar risk, as communicated to EBA.’
ELI: http://data.europa.eu/eli/reg/2024/1623/oj
ISSN 1977-0677 (electronic edition)