EUROPEAN UNION: EBA Updates to Single Rulebook Q&A

Monday August 24 2015

On 21st August 2015, the European Banking Authority (EBA) updated its Q&A on the Single Rulebook to include two new questions and answers:

Reporting on Stable Funding:

Q: Article 427(1) of Regulation (EU) No 575/2013 (CRR) requires institutions to report on Stable Funding in accordance with the reporting requirements set out in Article 415(1) and the uniform formats referred to in Article 415(3). Therefore is it correct that Article 415(2) is not a requirement of Stable Funding reporting?

A: Article 427(1) of Regulation (EU) No 575/2013 (CRR) requires institutions to report Stable Funding in accordance with the reporting requirements set out in Article 415(1) of the CRR. The first paragraph of Article 415(2) of the CRR states that institutions shall report separately items referred to in Article 415(1) when the conditions in Article 415(2)(a) and (b) are met. Consequently, reporting of Stable Funding is also subject to the requirements set out in Article 415(2) of the CRR.

Initial margin for the purpose of hypothetical capital calculation:

Q: What amount should be used as the initial margin posted by to the Central Counterparty (CCP) by a clearing member for the purpose of Article 50a of Regulation (EU) No 648/2012 (EMIR), introduced by Article 520 of Regulation (EU) No 575/2013 (CRR)? Does the Article 50b(c) of the EMIR apply to the initial margin? Should the excess initial margin be included?

A: For the purpose of the Article 50a of EMIR, the quantity IMi should be the one defined by the Article 50b(c) of EMIR, i.e. the collateral posted by clearing members reduced by the supervisory volatility adjustment under the Financial Collateral Comprehensive Method (FCCM) described in Article 224 of CRR. Since the excess initial margin is included in the collateral posted then it should be included in the calculation.

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