EU Consultation on Proposed Amendments to Technical Standards Under the Capital Requirements Regulation

The European Securities and Markets Authority has published a consultation paper in which it proposes amending the Implementing Technical Standards that specify the main indices and recognized exchanges for the purpose of the Capital Requirements Regulation (Commission Implementing Regulation (EU) 2016/1646). CRR requires a bank to hold sufficient capital to cover the risks associated with its business and prescribes how the credit risks of collateral should be treated. Securities that will be regarded as eligible as collateral are equities and convertible bonds that are constituents of a main index and debt securities that are listed on a recognized exchange. ESMA's consultation relates to the ITS setting out the main indices and recognized exchanges.

ESMA is proposing to change the ITS so that the most up to date list of main indices and recognized exchanges is incorporated into the ITS. The only way to do this is to revise the existing ITS. ESMA is also proposing to change the methodology for determining the indices because the existing methodology results in different factors being taken into account for EU and non-EU indices and exchanges. ESMA is proposing a new methodology that would apply homogeneously to EU and non-EU indices.

The consultation closes on July 5, 2019. Based on the feedback received, ESMA will prepare final draft amending ITS for submission to the European Commission.

View the consultation paper.

View the existing ITS.

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