EBA · 2023_6954 Final Q&A

Template 1 – Equity instruments

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
449a
Topic
Transparency and Pillar 3
Submitted by
Competent authority
Submitted
2023-12-21
Answered
2024-03-22
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

The instructions state “Institutions shall disclose the gross carrying amount, referred to in Part 1 of Annex V to Implementing Regulation (EU) 2021/451, of those exposures towards non-financial corporates, including loans and advances, debt securities and equity instruments, classified in the accounting portfolios in the banking book in accordance with that Implementing Regulation, excluding financial assets held for trading or held for sale assets”. In this case, should the definition of equity instruments also include investments in subsidiaries, joint ventures and associates, or should entities consider the definition of accounting portfolios of financial instruments provided by Annex V of FINREP, which specifically excludes investments in subsidiaries, joint ventures and associates?

Background

Instructions state “Institutions shall disclose the gross carrying amount, referred to in Part 1 of Annex V to Implementing Regulation (EU) 2021/451, of those exposures towards non-financial corporates, including loans and advances, debt securities and equity instruments, classified in the accounting portfolios in the banking book in accordance with that Implementing Regulation, excluding financial assets held for trading or held for sale assets”, however it is not clear which definition of "Equity instruments" should be considered.

Answer

The instructions provided in Annex XL of Regulation (EU) 2021/637 for Template 1 do not exclude the scope of investments in subsidiaries, joint ventures and associates within equity instruments. It defines the scope as “[...] exposures towards non-financial corporates, including […]”, but not limited to, “[…] loans and advances, debt securities and equity instruments, classified in the accounting portfolios in the banking book […]”. Therefore, investments in subsidiaries, joint ventures and associates should be included and considered when completing Template 1. This is strengthened by the DPM table layout and data point categorisation updated on October 30, 2023 (EBA DPM for  Reporting Framework 3.3 ) which defines the scope as “Accounting portfolio for financial assets other than trading or held for sale, including Investments in subsidiaries, joint ventures and associates”.

Original source: European Banking Authority, Q&A ID 2023_6954

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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