LCR treatment of issuances with automatic optionality/knock-out features

Issuances with automatic optionality/knock-out features are not explicitly covered in Delegated Regulation (EU) 2015/61 (LCR DR). Provided that the events that are triggering the knock-out / early redemption by the credit institution, in line with Article 5 of the LCR DR, have not taken place at the date of the calculation of the LCR, such issuances should be considered in the scope of Article 23(1) of the LCR DR which is meant to cover products and services which are not referred to in Articles 27 to 31a of the LCR DR. In this regard, as referred to in Article 23(2) LCR DR, it is for competent authorities to determine the liquidity outflows to be assigned to such products provided the likelihood and potential volume of the liquidity outflows in relation to such products is material. When doing so, competent authorities should consider which trigger events may occur for the issuing credit institution under the stress scenario of the LCR as referred to in Article 5 of the LCR DR. Provided that the events that are triggering the knock-out and early redemption have already taken place at the date of the calculation of the LCR and entail redemption within the next 30 calendar days, such issuances should be treated in accordance with Article 28(6) of the LCR DR.