EBA · 2023_6782 Rejected question

Securities lent under sale accounting (C40 and C43 treatment)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
429e, para. 6
Topic
Supervisory reporting - Leverage ratio
Submitted by
Credit institution
Submitted
2023-04-19
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Question

As per Q&A 6093 , clarification has been provided on the disclosure treatment of securities lent in a repurchase transaction that are derecognized due to sales accounting transactions under the applicable accounting framework. The Q&A appears to state that institutions shall reverse all sales-related accounting entries and these securities are to be treated as SFTs in both C40 (row 071) and C43 (row 040 or 060) disclosure. Under sale accounting treatment, the requirement is to reverse the sale treatment and therefore the securities will be reported in its original form, which is expected to be trading portfolio assets. Given this, is the correct treatment not for securities to be reported in C40 (row 090) and C43 (row 070) respectively?

Background

Article 429e (6). Where sale accounting is achieved for a repurchase transaction under the applicable accounting framework, the institution shall reverse all sales-related accounting entries.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2023_6782

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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