Changes from report parliamentary committee draft to plenary report

RemovedRegulation (EU) No 575/2013

Added(c) point (20) is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 26, Article 104 – paragraph 2 – subparagraph 1 – point i: (i) options, or other derivatives, embedded in the own liabilities of the institution in the non-trading book that relate to credit or equity risk.

Added‘(20) ‘financial holding company’ means an undertaking fulfilling all of the following conditions:

RemovedRegulation (EU) No 575/2013

Added(a) the undertaking is a financial institution;

RemovedArticle 1 – paragraph 1 – point 26, Article 104 – paragraph 2 – subparagraph 3: For the purposes of point (i), an institution shall split the embedded option from its own liability in the non-trading book that relate to credit or equity risk. It shall assign the embedded option to the trading book and shall leave the own liability in the non-trading book.

Added(b) the undertaking is not a mixed financial holding company;

RemovedRegulation (EU) No 575/2013

Added(c) at least one subsidiary of that undertaking is an institution;

RemovedArticle 1 – paragraph 1 – point 26, Article 104 – paragraph 7– introductory part: 7. An institution shall assign to the trading book a position in a collective investment undertaking that is not referred to in point (f) of paragraph 3 of this Article, that is held with trading intent and where the institution meets one of the following conditions:

Added(d) more than 50 % of any of the following indicators are associated, on a steady basis, with subsidiaries that are institutions or financial institutions, and with activities performed by the undertaking itself that are not related to the acquisition or owning of holdings in subsidiaries when those activities are of the same nature as the ones performed by institutions or financial institutions:

RemovedRegulation (EU) No 575/2013

Added(i) the undertaking’s equity based on its consolidated situation;

RemovedArticle 1 – paragraph 1 – point 30 – point c, Article 106 – paragraph 5 – point a: (a) to calculate the own funds requirements for market risk using the approaches referred to in Article 325(1), points (a), (b) and (c), the interest rate risk position has been assigned to a separate portfolio from the other trading book positions, the business strategy of which is solely dedicated to manage and mitigate the market risk of internal hedges of interest rate risk exposure;

Added(ii) the undertaking’s assets based on its consolidated situation;

RemovedRegulation (EU) No 575/2013

Added(iii) the undertaking’s revenues based on its consolidated situation;

RemovedArticle 1 – paragraph 1 – point 30 – point c, Article 106 – paragraph 5 – point b: (b) to calculate the own funds requirements for market risk using the approaches referred to in Article 325(1), point (b), the position has been assigned to a trading desk established in accordance with Article 104b the business strategy of which is solely dedicated to manage and mitigate the market risk of internal hedges of interest rate risk exposure;

Added(iv) the undertaking’s personnel based on its consolidated situation;

RemovedRegulation (EU) No 575/2013

Added(v) other indicator considered relevant by the competent authority;’;

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 1: 1. For an exposure to which an institution applies the Standardised Approach under Chapter 2 or applies the IRB Approach under Chapter 3 but without using its own estimates of loss given default (LGD) under Article 143, the institution may take into account the effect of FCP in accordance with Chapter 4 in the calculation of risk-weighted exposure amounts for the purposes of Article 92(4), points (a) and (f), or, where relevant, expected loss (EL) amounts for the purposes of the calculation referred to in Article 36(1), point (d), and Article 62 point (d).

Added(d) the following point (20a) is inserted:

RemovedRegulation (EU) No 575/2013

Added‘(20a) ‘investment holding company’ means an investment holding company as defined in Article 4(1), point (23), of Regulation (EU) 2019/2033 of the European Parliament and of the Council;

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 2: 2. For an exposure to which an institution applies the IRB Approach by using its own estimates of LGD under Article 143, the institution may take into account the effect of FCP in accordance with Chapter 3 in the calculation of risk-weighted exposure amounts for the purposes of Article 92(4), points (a) and (f), and expected loss (EL) amounts for the purposes of the calculation referred to in Article 36(1), point (d), and Article 62, point (d).

Added(e) point (26) is replaced by the following:

RemovedRegulation (EU) No 575/2013

Added‘(26) ‘financial institution’ means an undertaking that meets both of the following conditions:

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 2a: 2a. Where an institution applies the IRB Approach by using its own estimates of LGD under Article 143 for both the original exposure and for comparable direct exposures to the guarantor, the institution may take into account the effect of UFCP in accordance with Chapter 3 in the calculation of risk-weighted exposure amounts for the purposes of Article 92(4), points (a) and (f), and expected loss (EL) amounts for the purposes of the calculation referred to in Article 36(1), point (d), and Article 62, point (d). In all other cases, the institution may take into account the effect of UFCP in risk-weighted exposure amounts EL amounts for those purposes in accordance with Chapter 4.

Added(a) the undertaking is not an institution, a pure industrial holding company, an insurance holding company or a mixed‐activity insurance holding company as defined in Article 212(1), points (f) and (g), of Directive 2009/138/EC;

RemovedRegulation (EU) No 575/2013

Added(b) the undertaking fulfils any of the following conditions:

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 3 – subparagraph 1 – introductory part: 3. Subject to the conditions set out in paragraph 4, loans to natural persons may be regarded as exposures secured by a mortgage on residential property, instead of being treated as guaranteed exposures, for the purposes of Part three, Title II, Chapters 2, 3 and 4 as applicable, where in a Member State the following conditions for those loans have been fulfilled:

Added(i) the principal activity of the undertaking is to acquire or own holdings or to pursue one or more of the activities listed Annex I, points 2 to 12 and point 15, to Directive 2013/36/EU, or to pursue one or more of the services or activities listed in Annex I, Section 1 or B, to Directive 2014/65/EU of the European Parliament and of the Council in relation to financial instruments listed in Section C of that Annex to that Directive;

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Added(ii) the undertaking is an investment firm, a mixed financial holding company, an investment holding company, a payment services provider within the meaning of Directive (EU) 2015/2366 of the European Parliament and of the Council, an asset management company or an ancillary services undertaking;’;

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 3 – subparagraph 1 – point c: (c) the institution has the legal right to take a mortgage on the residential property in the event that the guarantor referred to in point (b) does not meet its obligations under the guarantee provided.

Added(f) the following point (26a) is inserted:

RemovedRegulation (EU) No 575/2013

Added‘(26a) ‘pure industrial holding company’ means an undertaking that fulfils all of the following conditions:

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 4 – point e: (e) the guarantor is an institution or a financial sector entity subject to capital requirements at least comparable to those applicable to institutions or insurance undertakings;

Added(a) the principal activity of the undertaking is to acquire or own holdings;

RemovedRegulation (EU) No 575/2013

Added(b) neither the undertaking nor any of the undertakings in which it owns participations are referred to in point (27), points (a), (d), (e), (f), (g), (h), (k) and (l);

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 4 – point g: (g) the institution is contractually and legally allowed to take a mortgage on the residential property in the event that the guarantor does not meet its obligations under the guarantee provided;

Added(c) neither the undertaking nor any of the undertakings in which it own participations perform as a principal activity any of the activities listed in Annex I to Directive 2013/36/EU, any of the activities listed in Annex I, Sections A or B, to Directive 2014/65/EU in relation to financial instruments listed in Section C of that Annex to that Directive, or are investment firms, payment services providers within the meaning of Directive (EU) 2015/2366, asset management companies, or ancillary services undertakings;’;

RemovedRegulation (EU) No 575/2013

Added(g) in point (27), point (c) is deleted;

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 4 – point h: deleted

Added(h) point (28) is replaced by the following:

RemovedRegulation (EU) No 575/2013

Added‘(28) ‘parent institution in a Member State’ means an institution in a Member State which has an institution or a financial institution as a subsidiary, or which holds a participation in an institution or financial institution▌, and which is not itself a subsidiary of another institution authorised in the same Member State, or of a financial holding company or mixed financial holding company set up in the same Member State;’;

RemovedArticle 1 – paragraph 1 – point 32, Article 108 – paragraph 4 a (new): 4 a. Institutions that exercise the option provided for in paragraph 3 for a given eligible guarantor under the mechanism referred to in that paragraph, shall do so for all its retail exposures guaranteed by that guarantor under that mechanism.';

Added(i) the following points (33a) and (33b) are inserted:

RemovedRegulation (EU) No 575/2013

Added‘(33a) ‘stand-alone institution in the EU’ means an institution that is not subject to prudential consolidation pursuant to Part One, Title II, Chapter 2 in the EU, and that has no EU parent undertaking subject to such prudential consolidation;

RemovedArticle 1 – paragraph 1 – point 34, Article 111 – paragraph 4: 4. For contractual arrangements offered by an institution, but not yet accepted by the client, that would become commitments if accepted by the client, the percentage applicable to that type of contractual arrangement shall be that provided for in accordance with paragraph 2.

Added(33b) ‘stand-alone subsidiary institution in a Member State’ means an institution that meets all of the following criteria: