EBA published consultation on amendments to the implementing technical standards (ITS) on disclosure and reporting of minimum requirement for own funds and eligible liabilities (MREL) and the total loss absorbency requirement (TLAC), and seeks views.
Follows EU CMSN May 2021 published Reg 2021/763 laying down implementing technical standards for application of CRR/BRRD re supervisory reporting and public disclosure of minimum requirement for own funds and eligible liabilities, see #83420.
Also follows EU Oct. 2022 issue daisy chain regulation Reg 2022/2036, see #148428.
Background
Institutions have been disclosing information to market and reporting information to their competent and resolution authorities as per the ITS (Reg 2021/763) since 2021.
The ITS now need minor adjustments in response to changes to Capital requirements regulation (CRR), as well as to clarify some issues raised, make editorial corrections.
Amendments
The amendments aim to reflect changes to the prudential framework, and provide clarifications on the information to be reported in the insolvency ranking templates.
Changes proposed to information on the requirement to deduct investments in eligible liabilities instruments of entities in same resolution group (daisy chain framework).
Information on prior permission regime for buying back eligible liabilities instrument issued by the reporting entities and groups, and breakdown by insolvency ranking.
Paper also includes updated mapping between disclosure and reporting requirements.
Consultation also includes annexes: annex I reporting, templates; annex II reporting, instructions; annex III: disclosures, templates; annex IV disclosures, instruction.
Effectiveness
Short consultation due to limited changes, closing date is therefore Aug. 18, 2023.
Public hearing webinar to take place on Jul. 21, 2023, registration for this is open.
The amendments to the ITS are envisaged to apply for reference date of Jun. 2024.
Jul. 24, 2023 Public Hearing
On Jul. 24, 2023, EBA issued documentation from public hearing held on Jul. 21, 2023.
Covered the purpose of amending ITS, timeline for the finalization of draft amending ITS, overview of the changes, prior permissions framework, daisy chain framework.
Also included a reminder of the consultation closing date of Aug. 18, 2023.
Dec. 2023 Final Draft ITS Issued
On Dec. 20, 2023, EU EBA issued final draft implementing technical standards (ITS) on amendments to disclosures and reporting on MREL and TLAC, in response to amendments to CRR and clarify requirements regarding Single Rulebook Q&A process.
In addition to the ‘daisy chain’ framework, changes cover information on the prior permission regime for buying back eligible liabilities instruments issued by the reporting entities and groups, and the breakdown by insolvency ranking.
The mapping between disclosures and reporting requirements is published alongside the amending ITS and has been updated to reflect amendment to both requirements.
A final review of the ITS and its annexes will be done against the final text of Reg 2022/2036 amending the CRR (‘daisy chain’ framework) once it is published.
Submitted to EC for adoption; changes to apply for reference date of Jun. 30, 2024.
Jun. 6, 2024 EC Adoption
On Jun. 6, 2024, EU CMSN adopted implementing technical standards (C(2024)3624).
Regulation in force on 20th day following that of its publication in the Official Journal of the European Union; it shall apply from 6 months after the date of entry into force.
Jun. 7, 2024 Official Journal
On Jun. 7, 2024, EU CMSN issued final Reg 2024/1618 of Jun. 6 in the Official Journal.
Regulation in force on 20th day following that of its publication in the Official Journal of the European Union, Jun. 27, 2024; it shall apply from Dec. 27, 2024.
At the end of the document, new Annex IV was added, titled: Disclosure on the minimum requirement for own funds and eligible liabilities – Instructions.
