EBA · 2021_6213 Question under review

Relevance of a person association's purpose for SME supporting factor application

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
501, para. 2
Topic
Other issues
Submitted by
Competent authority
Submitted
2021-09-20
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

What is the determining criterion to classify person associations (such as joint accounts, civil law companies, etc.) as “entities engaged in an economic activity”, so that they fall under the preferential treatment of the SME supporting factor?

Background

An institution applies the SME supporting factor also for person associations, in case that at least one of the persons of the association has already been classified as SME, independent from the purpose of the person association’s financing, and given an annual turnover below EUR 50 mn. This leads to a preferential RWEA treatment of exposure to civil law companies composed of at least one SME (e.g. a freelancer), but the association’s purpose is not in the context of the already classified SME.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2021_6213

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.

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