EBA embraces the ‘daisy chain’ framework with ITS for MREL and TLAC

Posted on January 7, 2024 by Editor

The European Banking Authority (EBA) has released its final draft Implementing Technical Standards (ITS) supporting amendments to disclosure and reporting requirements for the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) and the Total Loss Absorbency Requirement (TLAC).

These changes reflect a notable inclusion of the ‘daisy chain’ framework, among other strategic adjustments to the prudential landscape.

The updated disclosure and reporting standards are slated to come into effect from the reference date of June 2024.

The updates to the ITS respond to changes in the Capital Requirements Regulation (CRR), and also provide clarification based on feedback received through the Single Rulebook Q&A process.

Beyond the ‘daisy chain’ framework, the revisions include details on the prior permission regime for repurchasing eligible liabilities instruments by reporting entities and groups, along with a breakdown by insolvency ranking.

The EBA has also published a mapping document aligning disclosures and reporting requirements, which has been updated to accommodate the amendments and guide the financial industry through the updates.

Find the draft Implementing Technical Standards, mapping document, and other associated files here.

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