EBA · 2024_7031 Rejected question

Disclosure of exposures arising from Article 390 (5)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
390, para. 5
Topic
Large exposures
Submitted by
Credit institution
Submitted
2024-03-05
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Question

How the exposures as per Article 390 (5) be reported in Corep templates C28 & C29 - direct vs indirect?

Background

Article 390(5) provides requirements for  exposures  arising from derivative contracts listed in Annex II of the  CRR  and credit derivative contracts, where the contract was not directly entered into with that client but the underlying debt or equity instrument was issued by that client. This is further supplemented by EBA through COMMISSION DELEGATED REGULATION (EU) 2022/1011 of 10 March 2022 in accordance with Article 390(9), where EBA has called out the exposure as Indirect exposures arising from derivatives.   However, in accordance with Annex IX Instruction for Reporting on Large exposure and Concentration Risk, indirect exposure to be reported in Col 120-170 of C28 template and equivalent disclosure in template C29 is restricted only to exposures arising from requirements of Article 403 and it doesn’t cover Article 390(5). This is therefore leading to divergence in regulatory guidance.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2024_7031

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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