Operational Deposits Arising From The Provision of Operational Services (Clearing, Custody and Cash Management)

Article 27(4) of the Commission Delegated Regulation (EU) No 2015/61 requires the identification of  ' significant legal or operational limitations that make significant withdrawals within 30 calendar days unlikely' . The paragraph further alludes to the fact that the operational services are rendered in the context of an established relationship which is critically important to the depositors and also distinguishes between the amount of deposits required to render the operational service in question and deposits in excess of those required. Legal and operational limitations are limitations that can be due, amongst other limitations, either to the costs and delay of switching by the depositors to another service provider or due to limitations that would arise from a withdrawal of deposits compromising the operational service for which the deposits are a by-product. In order to identify these latter limitations, it is thus important to distinguish between operational deposits and excess deposits. In order to identify the amount of excess deposits, it is necessary to identify the type of operational services and the amount of deposits required to render these services. The institution needs to develop its own method to estimate these amounts, under the supervision of the relevant competent authority. The method should use factors related to the nature of the service and the client's usage of this service. Any deposits in excess of these amounts should be considered non-operational. Credit institutions shall consider the entire deposit as non-operational where the method referred above has not been carried out or is not completed. Observed outflows may also be used to corroborate the identification of operational deposits by providing evidence that 'significant withdrawals are unlikely'. However, observed outflows cannot be a sufficient condition to classify deposits as operational deposits. Therefore, deposits which have been identified as excess deposits should not be (re-) classified as operational solely on the grounds of stable observed outflows.