Maturity calculation under IRB for exposures that only have contractual cashflows in the form of fees

Article 162(2) of Regulation (EU) No 575/2013 as amended (CRR) describes how the maturity value (M) shall be calculated for institutions that have received a permission in accordance with the second subparagraph of paragraph 1 of that Article or have received the permission of the competent authority to use own LGDs and own conversion factors for exposures to corporates, institutions or central governments and central banks pursuant to Article 143 CRR.   Article 162(2)(a) CRR describes how M shall be calculated for instruments subject to a cash-flow schedule where “cash-flows (principal, interest payments and fees)” are contractually payable by the obligor in a period t.   For the purpose of said point (a) of Article 162(2) CRR, cash-flows in a certain period t should be considered as any amount of principal, interest payments and fees (if any), contractually payable by the obligor in that period t. It does not mean that the formula set out in that point shall only be applied where the respective instrument is subject to cash-flows composed by all three components - principal, interest payments and fees.   Therefore, if the instrument is subject to a cash-flow schedule, where cash-flows are exclusively composed by fees contractually payable by the obligor in period t, the requirements in accordance with point (a) of Article 162(2) shall apply.