EBA · 2021_6031 Rejected question

Reduction, distribution and reclassification of share premium accounts related to own funds instruments

Name: Reduction, distribution and reclassification of share premium accounts related to own funds instruments: EBA Q&A — EU Financial Regulatory Q&A
Creator: European Banking Authority
License: https://creativecommons.org/licenses/by/4.0/

Regulation: Regulation (EU) No 575/2013 (CRR)
Article: 77, para. 1
Topic: Own funds
Submitted by: Competent authority
Submitted: 2021-06-08

Browse ECB SSM Register → More Q&As on this regulation →

Question

May an institution announce to the holders of own funds instruments the reduction, distribution or reclassification of related share premium accounts before that institution has obtained the prior permission of the competent authority foreseen under Article 77(1)(b) CRR?

Background

Article 28(1) of Commission Delegated Regulation 241/2014 (RTS) prevents an institution to announce the ‘’redemptions, reductions and repurchases of own funds instruments’’ to the holders of the instruments before the institution has obtained the prior permission of the competent authority. Reg. (EU) 2019/876 amended Article 77(1)(b) CRR and Article 78(1) CRR in order to, among others, add express reference to the reduction, distribution and reclassification of share premium accounts related to own funds instruments. Given that Article 28(1) RTS has not been amended by adding, alongside own funds instruments, express reference to related share premium accounts, it is therefore not clear whether Article 28(1) RTS is equally applicable to the reduction, distribution and reclassification of share premium accounts related to own funds instruments under Article 77(1)(b) CRR.

No answer published yet.

Original source: European Banking Authority, Q&A ID 2021_6031

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

Reduction of own funds according to Article 78(1)(a) CRR

Answered 2022-11-11

Supervisory permission for reducing own funds if the institution replaces the instruments with own funds instruments of equal or higher quality

Answered 2014-04-30

Reduction of CET1 by absorbing losses which are already accounted as loss brought forward

Answered 2015-06-05

Clarification of the conditions for reduction of own funds due to Article 77 CRR and Article 28 RTS on Own funds.

Answered 2017-07-28

Permission to reduce own funds or eligible liabilities and deduction rules in the context of a liability management exercise (exchange offer, tender offer or issuance of a replacement instrument concurrent with a tender offer on the existing instrument)

Answered 2023-09-15

More Q&As on this topic

C01.00 - CIU deduction from own funds

Answered 2025-03-21

4.0 Reporting Framework - COREP_OF C02 Template

Answered 2025-03-21

Direct contributions to reserves from shareholders

Answered 2025-02-07

Permission to reduce AT1, Tier 2 or eligible liabilities instruments and deduction rules in the context of a liability management exercise without replacement.

Answered 2024-04-05

Treasury shares – how to report them in Own Funds and in the NSFR

Answered 2024-02-23

📋 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.