EBA · 2022_6597 Rejected question

General Prior Permission (GPP) to call, redeem, repay or repurchase eligible liabilities pursuant to Article 78a(1) second subparagraph of the CRR .

Name: General Prior Permission (GPP) to call, redeem, repay or repurchase eligible liabilities pursuant to Article 78a(1) second subparagraph of the CRR .: 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: 78a, para. 1
Topic: Own funds
Submitted by: Resolution authority
Submitted: 2022-10-03

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

Question

Can the resolution authority allow - under specific conditions - institutions, to which a GPP has been granted, to consider the issuance of new eligible liabilities instruments during the authorization period for the purpose of calculating the unused part of the predetermined amount?

Background

Q&A 3568 clarified that the predetermined amount should always be calculated on the basis of the gross long position, namely the outstanding amount of the relevant issuance, without taking into account short positions. Q&A 2094 clarified that newly subscribed CET1 instruments during a period up to one year from the date of the granting of the permission automatically increase the predetermined amount. This Q&A referred to a GPP for mutual and cooperative societies to reduce own fund instruments under Article 32 of Commission Delegated Regulation (DR) 241/2014, which expressly requires the calculation of the predetermined amount “ net of the amount of the subscription of new paid in Common Equity Tier 1 instruments during a period up to one year ”. The question arises as to whether Q&A 2094 can also apply to a GPP for eligible liabilities under Article 78a(1) second subparagraph of the CRR; i.e. whether once a GPP is granted for a certain predetermined amount, the resolution authority can allow a subsequent issuance of eligible liabilities instruments to increase the total amount that is permitted.

No answer published yet.

Original source: European Banking Authority, Q&A ID 2022_6597

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

Predetermined amount for market making with partially grandfathered or amortised instruments

Answered 2016-02-05

Implementation of Article 72b(2)(j) of Regulation (EU) No 575/2013 (“CRR”) and whether the contractual provisions governing liabilities are required to refer to the permission regime in order for the liabilities to qualify as eligible liabilities instruments

Answered 2022-07-15

MREL-REPORTING OF THE IMPACT OF GENERAL PRIOR PERMISSION

Answered 2024-05-31

Market making in several AT1 or T2 instruments

Answered 2015-09-25

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.