Treating lease exposures as collateralised under the F-IRB approach

Is a permission of the competent authority under Article 199(6) of the CRR required for treating lease exposures as collateralised under the F-IRB approach if the lease object corresponds to other physical collateral?

Under Article 199(7) of the CRR, “[s]ubject to the provisions of Article 230(2), where the requirements set out in Article 211 are met, exposures arising from transactions whereby an institution leases property to a third party may be treated in the same manner as loans collateralised by the type of property leased.” Article 211 of the CRR sets out further conditions that need to be met if the institution wants to treat exposures arising from leasing transactions as collateralised by the type of property leased. In point (a) of the said article it is stated that “the conditions set out in Article 208 or 210, as applicable, for the type of property leased to qualify as eligible collateral are met”. Therefore, the property leased consists of physical assets other than real estate, conditions set out in Article 210 of the CRR for other physical collateral must be met with respect to the property leased. Under Article 199(6) of the CRR, use of other physical collateral as eligible collateral for credit risk mitigation under the F-IRB approach requires permission of the competent authority. However, Articles 199(7) and 211 dealing with leasing exposures do not contain any reference to Article 199(6), which indicates that such permission of the competent authority is not needed for leasing even if the lease object corresponds to other physical collateral.