BETA

65 Amendments of Othmar KARAS related to 2016/0360A(COD)

Proposal for a regulation
Recital 13

(13) ~~The Basel Committee is currently considering the introduction of a leverage ratio surcharge~~A leverage ratio buffer requirement for globally systemically important ~~bank~~institutions (G-SIBIs)~~. Th~~ should be fintroduced aligned with the final outcome of the Basel Committee's calibration work ~~should give rise to a discussion on the appropriate calibration of the leverage ratio for systemically important EU institutions~~. This requirement should be set at 50% of a G-SIIs higher-loss absorbency risk- weighted requirements and set at the highest EU consolidation of the banking group.

2018/02/02
Committee: ECON

Proposal for a regulation
Recital 50

(50) Some clarifications should be made to the remuneration disclosures. The disclosure requirements on remuneration in this Regulation should comprise disclosures which are compatible with the aim of the remuneration rules to establish and maintain, for categories of staff whose professional activities have a material impact on the risk profile of credit institutions and investment firms, remuneration policies and practices that are consistent with effective risk management. Furthermore, institutions benefitting from a derogation from certain remuneration rules should be required to disclose information concerning such derogation.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 2

Regulation (EU) No 575/2013
Article 2 – paragraph 3 a (new)

3a. For the purposes of ensuring compliance within their respective competences the Single Resolution Board, as described in Article 42 of Regulation (EU) No 806/2014, and the ECB shall ensure a regular and reliable exchange of relevant information and shall grant each other access to their respective data base.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 a (new)

(144a) ‘small and non-complex institution’ means an institution which fulfils all of the following criteria: (a) the total value of the assets at the consolidated level, or, in the case of institutions controlled by a parent undertaking, a financial holding company or a mixed financial holding company, the total value of assets of the parent entity at the consolidated level or, in the case of supervision on a consolidated basis according to Article 4(1)127 or Article 10, the total value of assets of an institution other than the consolidating (parent) institution, is less than or equal to EUR 5 billion; (b) the institution is subject to simplified obligations in relation to recovery and resolution planning in accordance with Article 4 of Directive 2014/59/EU; (c) the institution is not a large institution within the meaning of Article 4(1) point 144b; (d) its trading activities are classified as low within the meaning of Article 94; (e) the total value of its derivative positions is less than or equal to 2% of its total on- and off-balance sheet assets, where only derivatives which qualify as positions held with trading intent are included in calculating the derivative positions; (f) the institution has not communicated to the competent authority an objection to being classified as a small and non- complex institution; (g) the competent authority has not decided that the institute is not to be considered a small and non-complex institution based on an analysis of its size, interconnectedness, complexity or risk profile. As an exception to point (a), and provided that the competent supervisory authority considers this to be necessary, the competent supervisory authority may at its discretion lower the threshold value from EUR 5 billion to as low as EUR 1.5 billion or to as low as 1% of the gross domestic product of the Member State in which the institution is established, provided that the amount equalling 1% of the gross domestic product of the Member State in question is smaller than EUR 1.5 billion.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 b (new)

(144b) ‘large institution’ means an institution that meets any of the following conditions: a) the institution has been identified as a global systemically important institution (G-SII) in accordance with Article 131(1) and (2) of Directive 2013/36/EU; b) the institution has been identified as another systemically important institution (O-SII) in accordance with Article 131(1) and (3) of Directive 2013/36/EU; c) the institution is, in the Member State in which it is established, one of the three largest institutions in terms of total value of assets; d) the total value of the institution's assets on the basis of its consolidated situation is equal to or larger than EUR 30 billion; e) the total value of the institution's assets is larger than EUR 5 billion and the ratio of its total assets relative to the GDP of the Member State in which it is established is on average equal to or larger than 20 % over the four-year period immediately preceding the current annual disclosure period;

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 c (new)

(144c) ‘large subsidiary’ means a subsidiary that qualifies as a large institution;

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 d (new)

(144d) ‘non-listed institution’ means an institution that has not issued securities that are admitted to trading on a regulated market of any Member State, within the meaning of point 21 of Article 4(1) of Directive 2014/65/EU.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 e (new)

(144e) A "central securities depository" or "CSD" means a CSD as defined in point (1) of Article 2 paragraph 1 of Regulation (EU) No 909/2014.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

(144f) A "CSD-bank" is a credit institution designated under point (b) of Article 54 (2) Regulation (EU) No 909/2014 to provide banking-type ancillary services as set out in Section C of the Annex of Regulation (EU) No 909/2014.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 3 – point j

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 144 g (new)

(144g) 'FMI-credit institution' means a CSD or a CCP being also authorised as a credit institution or a CSD-bank;

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point b a (new)

Regulation (EU) No 575/2013
Article 6 – paragraph 4

(ba) Paragraph 4 is replaced by the following: "4. Credit institutions and investment firms that are authorised to provide the investment services and activities listed in points (3) and (6) of Section A of Annex I to Directive 2004/39/EC shall comply with the obligations laid down in Part Six on an individual basis. FMI-credit institutions shall not be required to comply with the obligations laid down in Article 413(1) on an individual basis. Pending the report from the Commission in accordance with Article 508(3), competent authorities may exempt investment firms from compliance with the obligations laid down in Part Six taking into account the nature, scale and complexity of the investment firms' activities." Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point b a (new)

Regulation (EU) No 575/2013
Article 6 – paragraph 5

(ba) Paragraph 5 is replaced by the following: "5. Institutions, except for investment firms referred to in Article 95(1) and Article 96(1) and institutions for which competent authorities have exercised the derogation specified in Article 7(1) or (3), shall comply with the obligations laid down in Part Seven on an individual basis." FMI- credit institutions shall not be required to comply with the obligations laid down in Part Seven on an individual basis." Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 12 a (new)

Regulation (EU) No 575/2013
Article 26 – paragraph 3 a (new)

(12a) In Article 26, the following paragraph 3a is inserted: "(3a) If the new Common Equity Tier 1 instruments to be issued are identical in the sense that they do not differ regarding the criteria set out in Article 28 or, where applicable, in Article 29, to instruments which the competent authority has already approved, the institution shall be free, by derogation from paragraph 3, to only notify the competent authority of its intention to issue new Common Equity Tier 1 instruments. Moreover, the institution shall send the competent authority all information which the competent authority requires to assess whether the instruments have been approved by the competent authority."

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 14

~~"intangible assets;"~~ (14) In paragraph 1 of Article 36, point (b) is replaced by the following: "intangible assets; The EBA shall investigate to determine how and under which circumstances a non-deduction of software from Common Equity Tier 1 items would be justified from a prudential perspective taking due account of (1) the opportunities and challenges which banks are facing in the era of digitalisation, (2) the different prudential rules that apply to banks and insurance companies, (3) the diversity of the banking sector in the Union as well as (4) the merits of a common and appropriate accounting-neutral approach. The EBA shall report to the Commission on its findings by six months after the entry into force of this Regulation. Building on the recommendations and conclusions of the EBA, and taking into account of developments in the international fora, the Commission shall report and, where appropriate, submit a legislative proposal on the regulatory treatment of investments in software to the European Parliament and the Council no later than one year after entry into force of this Regulation." Or. en (http://eur-lex.europa.eu/legal- content/EN/TXT/HTML/?uri=CELEX:32013R0575&from=EN)

2018/02/02
Committee: ECON

Othmar KARAS, Markus FERBER

Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point a a (new)

Regulation (EU) No 575/2013
Article 52 – paragraph 1 – point l – point i

~~"(i) they are paid out of distributable items;"~~ (aa) In Article 52, paragraph 1, subpoint (i) of point (l) is replaced by the following: "(i) they are paid out of distributable items, or reserves built under national law;" Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 27

1 a. For the purposes of point l, embedded derivatives shall not include instruments for which the conditions include an early repayment option for the issuers or the holders of this instrument.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 27

Regulation (EU) No 575/2013
Article 72a – paragraph 2 – point l

(l) liabilities arising from debt instruments with embedded derivatives. For the purpose of this point (l), debt instruments with variable interests derived from a reference rate such as the Euribor or the Libor, shall not be considered as debt instruments with embedded derivatives, solely because of this feature.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 27

(o) the applicable law or contractual provisions governing the liabilities require that, where the resolution authority exercises write down and conversion powers in accordance with Article 48 of Directive 2014/59/EU, the principal amount of the liabilities be written down on a permanent basis or the liabilities be converted to Common Equity Tier 1 instruments.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 27

Regulation (EU) No 575/2013
Article 72b – paragraph 6

6. The ~~competent~~resolution authority shall consult the ~~resolution~~competent authority when examining whether the conditions of this Article are fulfilled.

2018/02/02
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 32

Regulation (EU) No 575/2013
Article 77 – paragraph 1 a (new)

"1a. Where an institution provides sufficient safeguards to the competent authority as to its capacity to operate with own funds sufficiently above the amount of the requirements laid down in this Regulation and in Directive 2013/36/EU, institutions may take any of the actions under paragraph 1, provided that: (a) such action does not lead to a decrease in own funds that would lead to a situation where the own funds of the institution would fall below the requirements laid down in this Regulation and in Directive 2013/36/EU and an additional margin of 2.5% of the total risk exposure amount in accordance with Article 92 paragraph 3 of this Regulation; (b) the institution notifies to the competent authority its intention to take any of the actions under paragraph 1 and submits all information necessary to evaluate whether the conditions set under subparagraph 1 of this paragraph are satisfied. Where an institution provides sufficient safeguards to the resolution authority as to its capacity to operate with own funds and eligible liabilities sufficiently above the amount of the requirements laid down in this Regulation and in Directive 2013/36/EU and Directive 2014/59/EU, institutions may take any of the actions under paragraph 1 provided that: (a) such action does not lead to a decrease in own funds and eligible liabilities that would lead to a situation where the own funds and eligible liabilities of the institution would fall below the requirements in this Regulation, in Directive 2013/36/EU, in Directive 2014/59/EU and an additional margin of 2.5% of the total risk exposure amount in accordance with Article 92 paragraph 3 of this Regulation; (b) the institution notifies to the competent and the resolution authority its intention to make any of the actions under paragraph 1 and submits all information necessary to evaluate whether the conditions set out under subparagraph 1 of this paragraph are satisfied."

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 40

Regulation (EU) No 575/2013
Article 92 b – subparagraph 1

Institutions that are material subsidiaries of non-EU G-SIIs and that are not resolution entities shall at all times satisfy a requirement for own funds and eligible liabilities ~~equal to~~between 75% and 90% of the requirements for own funds and eligible liabilities laid down in Article 92a, in accordance with Article 92b(2).

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 40

Regulation (EU) No 575/2013
Article 92 b – paragraph 1 a (new)

The requirement for own funds and eligible liabilities within the range laid down in paragraph 1 of this Article, shall be determined by the host authority of the material sub-group in consultation with the home authority of the resolution group in consideration of the group's resolution strategy and implications on financial stability.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 41

Regulation (EU) No 575/2013
Article 94 – paragraph 1 – introductory part

1. By way of derogation from point (b) of Article 92(3), institutions may calculate the own funds requirement of their trading-book business in accordance with paragraph 2 provided that the size of the institutions’ on- and off-balance sheet trading-book business is equal to or less than both of the following thresholds on the basis of an assessment carried out on a monthly basis using the data as of the last day of the month:

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 42

Regulation (EU) No 575/2013
Article 99 – paragraph 7 – point e

(e) recommend amendments of Implementing Regulation (EU) No 680/2014 to reduce the reporting burden on institutions or specified categories of institutions where appropriate having regard to the objectives of this Regulation and Directive 2013/36/EU. The report shall, at a minimum, make recommendations on how t~~o reduce the~~he extent and level of granularity of reporting requirements for small ~~institutions as defined in Article 430a.~~ and non-complex institutions can be reduced so that the expected average compliance costs for small and non-complex institutions as defined in Article 4 paragraph 1 point 144a shall be at least 10% lower after the reduced reporting obligations have been fully applied.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 42

Regulation (EU) No 575/2013
Article 99 – paragraph 11

11. Competent authorities may waive the requirements to report data items specified in the implementing technical standards referred to in this Article and Articles 100, 101, 394, 415 and 430 ~~where~~, reduce the reporting frequency, allow the institution to report modified data points, and allow the institution to report in another reporting format, if at least one of the following points applies: (a) those data items are already available to the competent authorities by means other than those specified under the above mentioned implementing ~~technical~~ standards, including where that information is available to the competent authorities in different formats or levels of granularity.. ; the competent authority may then only grant the exceptions stated in this paragraph if data received or aggregated through such alternative methods are identical to those data points which otherwise ought to be reported in accordance with the respective implementing standards; (b) the data points or formats have not been updated in accordance with the amendments to this Regulation within an appropriate time period before the deadline for the data to be reported; (c) under consideration of the business activity of a small and non- complex institution, the applicable data points are not necessary to assess compliance with the prudential requirements or the financial situation of an institution.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 46 – point b a (new)

(ba) The following paragraph 6 a is added: "6a. Where both conditions set out in Article 94 (1) of this Regulation are met, irrespective of the obligations set out under Articles 74 and 83 of Directive 2013/36/EU, the provisions of Articles 103, 104b and 105 (3) of Part Three, Title 1, Chapter 3 of this Regulation do not apply."

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 48

Regulation (EU) No 575/2013
Article 104 – paragraph 2 – point e

(e) ~~financial~~ assets or liabilities ~~measured at fair value~~, which are measured and held for trading;

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 49

Regulation (EU) No 575/2013
Article 104 a – paragraph 1 – subparagraph 1

Institutions shall have in place clearly defined policies for identifying which exceptional circumstances justify the re- classification of a trading book position as a non-trading book position or conversely a non-trading book position as a ~~non-~~trading book position for the purposes of determining their own funds requirements to the satisfaction of the competent authorities. The institutions shall review these policies at least annually.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 49

Regulation (EU) No 575/2013
Article 104 a – paragraph 1 – subparagraph 2

~~EBA shall develop guidelines by [two ye~~A new classification of instruments shall be permitted only in exceptional circumstances. These may include a bank restructuring that results in permanent closure of trading desks, requiring termination of the business activity applicable to the instrument or portfolio or a change in accounting standards ~~after the entry into force of this Regulation] on the meaning of exceptional circumstances for the purpose of this Article.~~ that allows an item to be fair valued through the profit and loss. Market events, changes in the liquidity of a financial instrument, or a change of trading intent alone are not valid reasons for re- designating an instrument to a different book. A new classification shall be subject to paragraphs 2 to 5 and guarantee that the requirements of Article 104 are fulfilled. A new classification of instruments for the purpose of regulatory arbitrage is prohibited. (See Basel Committee on Banking Supervision Standard from January 2016 - Minimum capital requirements for market risk - 5. Restrictions on moving instruments between the regulatory books - Paragraph 27)

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 49

Regulation (EU) No 575/2013
Article 104 a – paragraph 2 – subparagraph 1

CApart from re-classifications directly enforced under Article 104, competent authorities shall grant permission to re- classify a trading book position as a non- trading book position or conversely a non- trading book position as a ~~non-~~trading book position for the purposes of determining their own funds requirements only where the institution has provided the competent authorities with written evidence that its decision to re-classify that position is the result of an exceptional circumstance that is consistent with the policies set out by the institution in accordance with paragraph 1. For that purpose, the institution shall provide sufficient evidence that the position no longer meets the condition to be classified as a trading book or non- trading book positions pursuant to Article 104.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 49

Regulation (EU) No 575/2013
Article 104 a – paragraph 5

5. The re-classification of a position in accordance with this article apart from re- classifications directly enforced under Article 104, shall be irrevocable.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 52 a (new)

Regulation (EU) No 575/2013
Article 117 – paragraph 2

(52a) In Article 117, paragraph 2 is replaced by the following: "2. Exposures to the following multilateral development banks shall be assigned a 0 % risk weight: (a) the International Bank for Reconstruction and Development; (b) the International Finance Corporation; (c) the Inter-American Development Bank; (d) the Asian Development Bank; (e) the African Development Bank; (f) the Council of Europe Development Bank; (g) the Nordic Investment Bank; (h) the Caribbean Development Bank; (i) the European Bank for Reconstruction and Development; (j) the European Investment Bank;(k)the European Investment Fund; (l) the Multilateral Investment Guarantee Agency; (m) the International Finance Facility for Immunisation; (n) the Islamic Development Bank. ; (na) International Development Association. For the purposes of this paragraph, the Commission is empowered to adopt delegated acts in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010, to specify under consideration of existing regulatory equivalence assessments as to whether multilateral development banks not yet included in the list of this paragraph fulfil the requirements to be assigned a 0% risk weight. " Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 57 a (new)

Regulation (EU) No 575/2013
Article 181 – paragraph 1 – point a a (new)

(57a) In paragraph 1 of Article 181, the following point (a a) is inserted: "(aa) By way of complementing point (a) of this paragraph, an institution may in case of massive disposals adjust its LGD estimates. If an institution decides to apply for an adjustment of this kind, the institution shall inform the competent authorities of the scale, composition, date of the disposals and the reason why the disposal price does not contain relevant information for the LGD estimation for the remaining book. If the competent authority concludes that an adjustment referred to in this paragraph is not applicable, it shall decide within 30 days of the notification that the notifying institution cannot apply the adjustment. In such cases, the competent authority shall immediately inform the notifying institution of this decision."

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 84

Regulation (EU) No 575/2013
Article 325 u – paragraph 1

1. Institutions shall derive sensitivities ~~from the institution’s pricing model used in their profit and loss reporting~~using the formulas set out in this sub- section from the institution’s pricing models that serve as a basis for reporting profit and loss to senior management. By way of derogation from the first sub- paragraph, competent authorities may require an institution that has been granted the permission to use the internal model approach set out in Chapter 1b of this Title to use the pricing models of the risk-measurement model of their internal model approach in the calculation of the sensitivities under this Chapter for the calculation and reporting of the own fund requirements for market risks as required in point (b) of Article 325ba(2).

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 84

Regulation (EU) No 575/2013
Article 325 u – paragraph 4 a (new)

4a. By way of derogation from paragraph 1, an institution may, subject to the approval from competent authorities, use alternative definitions of delta risk sensitivities in the calculation of the own fund requirements of a trading book position under this chapter in the case the institution meets all of the following conditions: (a) these alternative definitions are used for internal risk management purposes and to report profit and loss to senior management by an independent risk control unit within the institution; (b) the institution shall demonstrate that these alternative definitions are more appropriate to capture the relevant sensitivities for the position than the formulas set out in this subsection and that the resulting sensitivities do not materially differ from those formulas.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 84

Regulation (EU) No 575/2013
Article 325 u – paragraph 4 b (new)

4b. By way of derogation from paragraph 1, an institution may, subject to the approval from competent authorities, calculate vega sensitivities based on a linear transformation of alternative definitions of sensitivities in the calculation of the own fund requirements of a trading book position under this chapter where the institution meets all of the following conditions: (a) these alternative definitions are used for internal risk management purposes and to report profit and loss to senior management by an independent risk control unit within the institution; (b) the institution shall demonstrate that these alternative definitions are more appropriate to capture the sensitivities for the position than the formulas set out in this subsection and the linear transformation referred to in the first sub- paragraph reflect a vega risk sensitivity.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 84

Regulation (EU) No 575/2013
Article 325 a i – table 4 – column Risk weight – row Bucket 9

Table 4 Covered bonds issued by credit institutions in Member States: 21.0%

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 91

Regulation (EU) No 575/2013
Article 390 – paragraph 4 – subparagraph 2

~~Exposures arising from~~When calculating the exposure value for these contracts ~~allocated to the trading book shall also fulfil the requirements set out in Article 299~~referred to in the first subparagraph which are allocated to the trading book, institutions shall also comply with the principles set out in Article 299. By derogation from the first subparagraph of this paragraph, institutions with a permission to use the Internal Model Method in accordance with Article 283 may use the method referred to in Part Three, Title II, Chapter 6, Section 6 for calculating the exposure value for securities financing transactions.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 100

Regulation (EU) No 575/2013
Article 401 – paragraph 2

2. FWith the exception of institutions using the Financial Collateral Simple Method, for the purposes of the first paragraph, institutions shall use the Financial Collateral Comprehensive Method, regardless of the method used for calculating own funds requirements of credit risk. By derogation from paragraph 1 and the first subparagraph of this paragraph, institutions with a permission to use the method referred to in Part Three, Title II, Chapter 6, Section 6, may continue to use this method for calculating the exposure value of securities financing transactions.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 100

Regulation (EU) No 575/2013
Article 401 – paragraph 4

4. Where an institution reduces an exposure to a client due to an eligible credit risk mitigation technique in accordance with Article 399(1), it shall, in the manner set out in Article 403, treat the part of the exposure by which the exposure to the client has been reduced as having been incurred to the protection provider rather than to the client..

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 101

Regulation (EU) No 575/2013
Article 403 – subparagraph 1

Where an exposure to a client is guaranteed by a third party or secured by collateral issued by a third party, and where that credit risk mitigation is used to calculate capital requirements for credit risk in accordance with Part Three, Title II, an institution shall:.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 108 – point b

Regulation (EU) No 575/2013
Article 416 – paragraph 5 – subparagraph 1

Shares or units in CIUs may be treated as liquid assets up to an absolute amount of EUR 500 million in the portfolio of liquid assets of each institution provided that the requirements in Article 132(3) are met and that the CIU, apart from derivatives to mitigate interest rate or credit or currency risk, ~~only~~ invests in liquid assets as referred to in paragraph 1 of this Article.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 d – paragraph 2

2. By way of derogation from Article 428c(1), institutions shall take into account the ~~accounting~~market value of derivative positions on a net basis where those positions are included in the same netting set that fulfils the requirements set out in Articles 295, 296 and 297. Where that is not the case, institutions shall take into account the ~~accounting~~market value of derivative positions on a gross basis and they shall treat those derivatives positions as their own netting set for the purpose of Chapter 4 of this Title.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 f – paragraph 1 – introductory part

1. ~~Subject to prior approval of competent authoritie~~If competent authorities agree through a prior approval process, an institution may consider that an asset and a liability are interdependent, provided that all of the following conditions are fulfilled:

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 s – paragraph 1 a (new)

1a. For all netting sets of derivative contracts, institutions shall apply a 5% required stable funding factor to the absolute market value of those netting sets of derivative contracts, gross of any collateral posted, where those netting sets have a negative market value.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 u – paragraph 2

2. For all netting sets of derivative contracts that are not subject to margin agreements under which institutions post variation margins to their counterparties, institutions shall apply a 10% required stable funding factor to the absolute market value of those netting sets of derivative contracts, gross of any collateral posted, where those netting sets have a negative market value.deleted

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

2. For all netting sets of derivative contracts subject to margin agreements under which institutions post variation margins to their counterparties, institutions shall apply a 20% required stable funding factor to the absolute market value of those netting sets of derivative contracts, gross of any collateral posted, where those netting sets have a negative market value.deleted

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 x – paragraph 3

3. An institution may replace the stable funding requirement set out in paragraph 2 for all netting sets of derivative contracts subject to margin agreements under which an institution posts variation margins to its counterparty with the amount of required stable funding calculated as the absolute amount of the difference between: (a) market value, gross of collateral posted, and which are subject to a margin agreement under which the institution posts variation margin to its counterparty, the sum of all the risk category Addon(a) calculated in accordance with Article 278(1); (b) market value, gross of collateral received, and which are subject to a margin agreement under which the institution receives variation margin from its counterparty, the sum of all the risk category Addon(a) calculated in accordance with Article 278(1). For the purpose of this calculation and in order to determine the risk position of derivative contracts included in the netting sets referred to in the first sub- paragraph, institutions shall replace the maturity factor calculated in accordance with point (b) of Article 279c(1) by either the maturity factor calculated in accordance with point (a) of Article 279c(1) or by the value of 1.deleted for all netting sets with negative for all netting sets with positive

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 x – paragraph 4

4. Institutions that use the methods set out in Sections 4 or 5 of Chapter 6 of Title II of Part Three to determine the exposure value of their derivative contracts shall not apply the stable funding requirement set out in paragraph 2 of this Article to netting sets of derivative contracts subject to margin agreements under which institutions post variation margins to their counterparties and where those netting sets have a negative market value.deleted

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 114

Regulation (EU) No 575/2013
Article 428 a f – point g a (new)

(ga) encumbered assets with a residual maturity of one year or more in a cover pool funded by covered bonds as referred to in Article 52(4) of Directive 2009/65/EC or covered bonds which meet the eligibility requirements for the treatment as set out in Article 129(4) or (5).

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 115

Regulation (EU) No 575/2013
Article 429 – paragraph 3

3. For the purposes of paragraph 2, the capital measure shall be the Tier 1 capital, comprising Common Equity Tier 1 and/or Additional Tier 1 instruments.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 115

Regulation (EU) No 575/2013
Article 429 a – paragraph 1 – point m a (new)

(ma) For exposures comprised of combined product elements, which are designed so that a balance is assigned to the institution without dispute or conditions, and can be offset at any time with the claim from the intermediate loan, the sum that is greater than the netted exposure value.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 118 a (new)

Regulation (EU) No 575/2013
Article 461 a (new)

(118a) The following new Article 461a is inserted after Article 461: "Taking into account of developments in international regulatory standards, the Commission shall review and report on the following elements of the own funds requirements for market risk by the [date of entry into force + 1 year]: (a) the Profit & Loss attribution requirement, set out in Articles 325ba and 325bh; (b) the modellability of risk factors, set out in Articles 325bf and 325bi; (c) other remaining changes in the market risk standards which are set out in Part III, Title IV of this Regulation; (d) the appropriateness of developments in international regulatory standards as regards to own fund requirements for market risk, other than the developments referred to in (a), (b) and (c) above, in particular on calibration. The Commission shall submit the report to the European Parliament and the Council, together with a legislative proposal, if appropriate."

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 122 a (new)

Regulation (EU) No 575/2013
Article 494 b (new)

(122a) The following Article 494b is inserted after Article 494a: "Article 494b Grandfathering of own funds instruments and eligible liabilities instruments 1. By way of derogation from Articles 51 and 52 of this Regulation, instruments issued prior to [date of entry into force of this Regulation] may qualify as Additional Tier 1 instruments at the latest until [3 years after the date of entry into force of this Regulation], where they meet the conditions laid down in Articles 51 and 52, except for the conditions referred to in points (q) and (r) of Article 52. 2. By way of derogation from Articles 62 and 63, instruments issued prior to [date of entry into force of this Regulation] may qualify as Tier 2 instruments at the latest until [3 years after the date of entry into force of this Regulation] where they meet the conditions laid down in Articles 62 and 63, except for the conditions referred to in points (o) and (p) of Article 63. 3. By way of derogation from Article 72a(1)(a), liabilities issued prior to [date of entry into force of this Regulation] may qualify as eligible liabilities items where they satisfy the conditions laid down in Article 72b, except for the conditions referred to in points (f) to (n) of Article72b(2)."

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 127

Regulation (EU) No 575/2013
Article 501 d a (new)

Article 501da Report on the prudential treatment of green assets The EBA shall investigate on the basis of available data and in coordination with the High Level Working Group on Sustainable Finance of the Commission whether a dedicated prudential treatment of green assets, in the form of different capital charges in comparison to non- green assets, would be justified from a prudential perspective. In particular, EBA shall investigate about (a) the risk profile of green assets in comparison to non- green assets, (b) the definition of a green asset class and (c) the potential effects of a dedicated prudential treatment of green assets on bank lending and the financial stability in the Union. By [one year after entry into force of this regulation], the EBA shall submit a report on its findings to the Commission. On the basis of this report, the Commission shall, if appropriate, submit to the European Parliament and the Council, a legislative proposal. For the purpose of this Article, ‘green assets’ are defined in accordance with the definition provided by the Climate Bonds Standard of the Climate Bonds Initiative1a." __________________ 1a https://www.climatebonds.net/standards

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 510 – paragraph 5 – subparagraph 1

~~The Commission is empowered to adopt a delegated act in accordance with Article 462 to amend the treatment of derivatives contracts listed in Annex II and credit derivatives for the calcul~~By [four years after the date of application of the net stable funding ratio as set out in Title IV of Part Six ~~if it deems~~], the Commission shall, itf appropriate ~~consider~~and taking thake impact of the existing treatment on institutions' net stable funding ratio and to take better account of the funding risk linked to these transactions over the one-year horizon of the net stable funding ratio. For this purpose, the Commission shall take into accountnto account the report referred to in paragraph 4, any international standards that may be developed by international fora, the diversity of the banking sector in the Union and the aims of the Capital Markets Union, submit a legislative proposal to the European Parliament and the Council on how to amend the tre~~port referred to in paragraph 4, any international standards that may be developed by international fora and the diversity of the banking sector in the Un~~atment of derivatives contracts listed in Annex II and credit derivatives for the calculation of the net stable funding ratio as set out in Title IV of Part Six to take better account of the funding risk linked to these transactions.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 501 – paragraph 5 – subparagraph 2

~~The Commission shall adopt the~~ delegated ~~act referred to in the first subparagraph by [three years after the date of application of the net stable funding ratio as set out in Title IV of Part Six].~~

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 510 – paragraph 5 – subparagraph 3

~~In the absence of adoption of the~~ delegated act referred to in the first subparagraph or of a confirmation by the Commission of the accuracy of the treatment of derivative contracts listed in Annex II and credit derivatives for the calculation of the net stable funding ratio by [three years after the date of application of the net stable funding ratio as set out in Title IV of Part Six], the requirement set out in Article 428x(2) of this Regulation shall apply for all institutions and all derivatives contracts listed in Annex II and credit derivatives regardless of their characteristics, and the provisions of Article 428u(2) and Article 428x(3) and (4) shall cease to apply.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 510 – paragraph 7 – subparagraph 1

~~The Commission is empowered to adopt a delegated act in accordance with Article 462~~By [four years after the date of application of the net stable funding ratio as set out in Title IV of Part Six], the Commission shall, if appropriate and taking take into account the report referred to in paragraph 6, any international standards developed by international fora, the diversity of the banking sector in the Union and the aims of the Capital Markets Union, submit a legislative proposal to the European Parliament and the Council on how to amend the treatment of secured lending transactions and capital market- driven transactions, including of the assets received or given in these transactions, and the treatment of unsecured transactions with a residual maturity of less than six months with financial customers for the calculation of the net stable funding ratio as set out in Title IV of Part Six if it deems it appropriate regarding the impact of the existing treatment on institutions' net stable funding ratio and to take better account of the funding risk linked to these transactions over the one-year horizon of the net stable funding ratio. For this purpose, the Commission shall take into account the report referred to in paragraph 6, any international standards developed by international fora and the diversity of the banking sector in the Union.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 510 – paragraph 7 – subparagraph 2

~~The Commission shall adopt the~~ delegated ~~act referred to in the first subparagraph by [three years after the date of application of the net stable funding ratio as set out in Title IV of Part Six].~~

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 129

Regulation (EU) No 575/2013
Article 510 – paragraph 7 – subparagraph 3

~~In the absence of adoption of the~~ delegated act referred to in the first subparagraph or of a confirmation by the Commission of the accuracy of the treatment of secured lending transactions and capital market-driven transactions, including of the assets received or given in these transactions, and of unsecured transactions with a residual maturity of less than six months with financial customers by [three years after the date of application of the net stable funding ratio as set out in Title IV of Part Six], the required stable funding factors applied to the transactions referred to in Article point (b) of 428s and in points (a) and (b) of Article 428u shall be raised to 10% and 15% respectively.

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 130 a (new)

(130a) Article 513 is replaced by the following: "Macroprudential rules 1. By 30 June 20149, and every three years thereafter, the Commission shall, after consulting the ESRB and EBA, review whether the macroprudential rules contained in this Regulation and Directive 2013/36/EU are sufficient to mitigate systemic risks in sectors, regions and Member States including assessing: (a) whether the current macroprudential tools in this Regulation and Directive 2013/36/EU are effective, efficient and transparent; (b) whether the coverage and the possible degrees of overlap between different macroprudential tools for targeting similar risks in this Regulation and Directive 2013/36/EU are adequate and, if appropriate, propose new macroprudential rules; (c) how internationally agreed standards for systemic institutions interacts with the provisions in this Regulation and Directive 2013/36/EU and, if appropriate, propose new rules taking into account those internationally agreed standards. 2. By 31 December 20149, and every three years thereafter, the Commission shall, on the basis of the consultation with the ESRB and EBA, report to the European Parliament and the Council on the assessment referred to in paragraph 1 and, where appropriate, submit a legislative proposal to the European Parliament and the Council." Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/05
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 130 b (new)

Regulation (EU) No 575/2013
Article 514

"Counterparty Credit Risk and the Original Exposure Method By 31 December 2016 the Commission shall review and report on the application of Article 275 and shall submit that report to the European Parliament and the Council, and, if(130b) Article 514 is replaced by the following: "Counterparty Credit Risk and the exposure values of derivative transactions The EBA shall, by [four years after entry into force of this Regulation], report to the Commission on the impact and the relative calibration of the approaches set out in Sections 3 to 5 of Chapter 6 of Title II of Part Three to calculate the exposure values of derivative transactions. Building on the findings of this report by the EBA, the Commission shall, where appropriate, submit a legislative proposal." to amend the approaches set out in Sections 3 to 5 of Chapter 6 of Title II of Part Three." Or. en (http://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0575)

2018/02/05
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 2 – subparagraph 1 – point a

(a) the provisions on the introduction of the new requirements for own funds and eligible liabilities in points (4)(b), (7) to (9), and (12) to (38) and (40), which shall apply from 1 January 2019;

2018/02/05
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 2 – subparagraph 1 – point b a (new)

(ba) the provisions on the introduction of the new own fund requirements for market risk in points (47) to (51) and (83) to (88), which shall apply from [three years after date of entry into force] of this Regulation.

2018/02/05
Committee: ECON