Commission adopts nine RTS under CRD IV

The European Commission has adopted nine directly applicable regulatory technical standards (RTS) required by the Capital Requirements Regulation and the CRD IV Directive (together known as CRD IV).  These RTS form part of the hundred mandates for regulatory and implementing technical standards that are provided for under the CRD IV measures.  A set of frequently asked questions which gives details of these RTS has also been published.  

The European Parliament and the Council of the European Union have one month to exercise their right of objection, with the possibility to extend this period for a further two months at their initiative.  Following which, the RTS will be published in the Official Journal of the European Union and will enter into force on the twentieth day following the date of their publication.  

The RTS published were:

• RTS for determining proxy spread and limited smaller portfolios for credit valuation adjustment risk
• RTS specifying the requirements for investor, sponsor, original lenders and originator institutions relating to exposures to transferred credit risk
• RTS specifying the classes of instruments that adequately reflect the credit quality of an institution as a going concern and are appropriate to be used for the purposes of variable remuneration;
• RTS for assessing the materiality of extensions and changes of the Internal Ratings Based Approach and the Advanced Measurement Approach;
• RTS specifying the information that competent authorities of home and host Member States supply to one another;
• RTS for the definition of market;
• RTS for non-delta risk of options in the standardised market risk approach;
• RTS further defining material exposures and thresholds for internal approaches to specific risk in the trading book; and
• RTS for determining what constitutes the close correspondence between the value of an institution’s covered bonds and the value of the institution’s assets;

 The European Commission has also published two documents giving the “state of play” which discloses which CRD IV RTS and ITS titles have been delivered, which are work in progress and which have not yet been started.  

Related links:

http://europa.eu/rapid/press-release_MEMO-14-181_en.htm

http://ec.europa.eu/internal_market/bank/docs/regcapital/acts/overview-crr-crdiv-rts_en.pdf

http://ec.europa.eu/internal_market/bank/docs/regcapital/acts/overview-crr-crdiv-its_en.pdf