EBA · 2017_3414 Final Q&A

Validation rule (taxonomy 2.6) e4902_n about the risk weighted exposure for Equity in CR SA

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
99, para. 1
Topic
Supervisory reporting - COREP (incl. IP Losses)
Submitted by
Other
Submitted
2017-07-21
Answered
2021-03-19
Answer provided by
ESAs (EBA, ESMA, EIOPA)
Browse ECB SSM Register → More Q&As on this regulation →

Question

Where shall equity exposures treated according to Articles 48(4), 471(2) and 495 (1) CRR be reported in COREP CR SA (C 07.00)?

Background

According to the formula e4902_n, the possible risk weights for the exposure class ‘equity’ in template C 07.00 are 100%; 250%; 1250%. As per CRR Article 133(3) CRR, investments in equity attracting a 250% risk weight under Article 48(4) CRR should not be classified as equity claims. But the validation rule e4902_n says the row 250 for 250% RW bucket can be non-empty for equity sheet 016 which indicates that these exposures should be reported in equity sheet. So, where are equity exposures attracting a risk weight of 250% according to Article 48 (4) be reported? As per Article 471(2) CRR, the equity holdings in insurance companies which are not deducted pursuant to paragraph 1 shall qualify as exposures and be risk weighted at 370%. But there is no specific instruction on where these exposures should be reported. The validation rule e4902_n says row 260 for 370% RW should be empty for sheet 016 of equity. [modified, from Q 3395]: A risk weight of 150% (row 240) is used in the legal framework of Article 495 (1) CRR which enables competent authorities to exempt certain categories of equity exposures from the IRB treatment until 31/12/2017. If this exemption is granted to an institution, the validation rule will be not respected. Should row 240 be excluded from this validation rule?

Answer

Question 1 For the purposes of reporting in accordance with Regulation (EU) No 680/2014 (ITS on Supervisory Reporting), the following shall apply: First of all, equity exposures treated according to Article 48(4) of Regulation (EU) No 575/2013 (CRR) are exposures to financial sector entities. The definition of a financial sector entity is provided in article 4 (1) point 27 CRR and includes both institutions and other kinds of counterparties. Secondly, Article 133(3) CRR refers to investments in equity or regulatory capital instruments, issued by institutions (i.e. equity claims) and it excludes from its scope, among others, the exposures treated under Article 48(4) CRR. Therefore, these exposures are to be included in sheet 007 (institutions) of template C 07.00 of Annex I to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting). Finally, the other equity exposures treated according to Article 48(4) CRR are in the scope of Article 133(1) of CRR and included in C 07.00, sheet 016 (equity exposures).   Question 2 Equity holdings in insurance companies that are not deducted, but risk weighted according to article 471(2) of CRR shall be assigned to template C 07.00, sheet 016, row 260 (370%). Validation rule e4902_n has been amended accordingly.   Question 3 Art. 495 (1) CRR was applicable until the end of 2017.

Original source: European Banking Authority, Q&A ID 2017_3414

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

Similar Q&As

New EBA Validation rule (taxonomy 2.6) v4786_m about the comparison between the risk weighted exposure amount and the exposure value for Equity in CR GB IRB

Answered 2017-12-08

Threshold exemptions from deduction from Common Equity Tier 1 items – Reporting within CoRep C 07.00

Answered 2026-01-09

C 07.00, validation e4894_n (validations for v2.6)

Answered 2017-07-28

Validation rule original exposure pre conversion factors

Answered 2021-03-05

Material holdings and deferred tax below the deduction threshold

Answered 2016-10-14

More Q&As on this topic

Validation rules taxonomy V4.0 C_47.00, C_43.00.a, C_43.00.b, C_43.00.c - v4456_m

Answered 2026-07-03

Threshold exemptions from deduction from Common Equity Tier 1 items – Reporting within CoRep C 07.00

Answered 2026-01-09

Calculation of Ideosyncratic and Systematic Risk

Answered 2026-01-09

Appropriate reporting of unconditionally cancellable commitments (UCCs) subject to transitional arrangements of Article 495d in CR SA (COREP C_07.00)

Answered 2025-12-05

C 25.01 - CREDIT VALUATION ADJUSTMENT RISK (CVA) – Col 0090 - Instruction Clarification

Answered 2025-12-05

📋 Track EU financial regulation continuously

Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.

Start free trial → Learn more

14-day free trial. No credit card required.