Article 89 of Regulation (EU) No. 575/2013 (CRR) – risk weighting and prohibition of qualifying holdings outside the financial sector

In order to determine whether the 15% threshold under Article 89 of Regulation (EU) No 575/2013 (CRR) is exceeded, the valuation of qualifying holdings outside the financial sector should take into consideration the application of the prudential filter on unrealised gains in Article 468. This means that the accounting value of the qualifying holding, as well as the amount of eligible capital on which the 15% threshold is calculated, will need to be adjusted by the amount of the corresponding unrealised gains which have been derecognised. For instance, if 100% of the unrealised gains are derecognised from own funds, the entire unrealised gain should also not be included in the value of the qualifying holding and the amount of eligible capital for the purposes of this assessment. DISCLAIMER: This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Financial Stability, Financial services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.