10 November 2017

EBA launches a public consultation on draft regulatory technical standards (RTS) on methods of prudential consolidation

The European Banking Authority (EBA) has launched on 9 November 2017 a public consultation on draft RTS specifying the different methods of prudential consolidation, which can be applied when certain conditions and criteria are met. The draft RTS are developed according to Article 18(7) of Regulation (EU) No 575/2013 (Capital Requirements Regulation – CRR) and aim, among other things, to ensure that the appropriate method of prudential consolidation is applied in the context of the CRR requirements on a consolidated basis.

According to the CRR, the entities included in the scope of prudential consolidation are institutions (i.e. credit institutions and investment firms), financial institutions and, when consolidated supervision is required, ancillary services undertakings. In this respect, the EBA has published in parallel an Opinion and a Report on the prudential treatment of other financial intermediaries (OFIs) and regulatory perimeter issues, highlighting the diversity in terms of application of the definition of “financial institution” and “ancillary services undertaking”, which currently exists. As these terms are crucial for the purposes of establishing the scope of prudential consolidation, the Consultation Paper on these draft RTS also seeks feedback on this issue.

The consultation, which is available at the following link, runs until 9 February 2018: https://www.eba.europa.eu/newspress/calendar?p_p_id=8&_8_struts_action=%2Fcalendar%2Fview_event&_8_eventId=2019691

The Opinion and the Report on the prudential treatment of other financial intermediaries (OFIs) and regulatory perimeter issues are available at: http://www.eba.europa.eu/-/eba-publishes-an-opinion-and-report-on-regulatory-perimeterissues-relating-to-the-crdiv-crr

A public hearing will take place at the EBA premises on 22 January 2018 from 13.30 to 15.30 UK time.