On August 5, 2014, the European Banking Authority ("EBA") published its final draft regulatory technical standards ("RTS") on the treatment of equity exposures under the internal ratings-based ("IRB") approach under the Capital Requirements Regulation ("CRR"). The CRR allows national regulators to exempt certain equity exposures from IRB treatment held by firms as at December 31, 2007. The exemption is not new and was already provided for by the now repealed Banking Consolidation Directive. However, the CRR required the EBA to develop new draft RTS in order to specify further conditions under which national regulators would grant such an exemption. The final draft RTS provide that the exemption may be given if it was being applied on the last day of the application of the previous Capital Requirements Directive. The provision is temporary, ending on December 31, 2017. The RTS have now been submitted to the European Commission for adoption.
The RTS are available at: http://www.eba.europa.eu/documents/10180/775695/EBA+RTS+2014+13+%28Final+draft+RTS+on+the+IRB+equity+exemption%29.pdf/ 243ce507-7721-4500-a5c9-3d61dd246098.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
