REGULATION (EU) No 575/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 26 June 2013

on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union , and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank ( 1 ) ,

Having regard to the opinion of the European Economic and Social Committee ( 2 ) ,

Acting in accordance with the ordinary legislative procedure,

Whereas:

  1. The G-20 Declaration of 2 April 2009 on Strengthening of the Financial System called for internationally consistent efforts that are aimed at strengthening transparency, accountability and regulation by improving the quantity and quality of capital in the banking system once the economic recovery is assured. That declaration also called for introduction of a supplementary non-risk based measure to contain the build-up of leverage in the banking system, and the development of a framework for stronger liquidity buffers. In response to the mandate given by the G-20, in September 2009 the Group of Central Bank Governors and Heads of Supervision (GHOS), agreed on a number of measures to strengthen the regulation of the banking sector. Those measures were endorsed by the G-20 leaders at their Pittsburgh Summit of 24-25 September 2009 and were set out in detail in December 2009. In July and September 2010, GHOS issued two further announcements on design and calibration of those new measures, and in December 2010, the Basel Committee on Banking Supervision (BCBS) published the final measures, that are referred to as the Basel III framework.
  2. The High Level Group on Financial Supervision in the EU chaired by Jacques de Larosière (the de Larosière group ) invited the Union to develop a more harmonised set of financial regulations. In the context of the future European supervisory architecture, the European Council of 18 and 19 June 2009 also stressed the need to establish a European Single Rule Book applicable to all credit institutions and investment firms in the internal market.

    HAVE ADOPTED THIS REGULATION:

( 1 ) OJ C 105, 11.4.2012, p. 1 .

( 2 ) OJ C 68, 6.3.2012, p. 39 .

PART ONE

GENERAL PROVISIONS

TITLE I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Scope

This Regulation lays down uniform rules concerning general prudential requirements that institutions supervised under Directive 2013/36/EU shall comply with in relation to the following items:

  1. own funds requirements relating to entirely quantifiable, uniform and standardised elements of credit risk, market risk, operational risk and settlement risk;
  2. requirements limiting large exposures;
  3. after the delegated act referred to in Article 460 has entered into force, liquidity requirements relating to entirely quantifiable, uniform and standardised elements of liquidity risk;
  4. reporting requirements related to points (a), (b) and (c) and to leverage;
  5. public disclosure requirements.

    This Regulation does not govern publication requirements for competent authorities in the field of prudential regulation and supervision of institutions as set out in Directive 2013/36/EU .

Article 2

Supervisory powers

For the purposes of ensuring compliance with this Regulation, competent authorities shall have the powers and shall follow the procedures set out in Directive 2013/36/EU .

Article 3

Application of stricter requirements by institutions

This Regulation shall not prevent institutions from holding own funds and their components in excess of, or applying measures that are stricter than those required by this Regulation.

Article 4

Definitions

1. For the purposes of this Regulation, the following definitions shall apply:

  1. credit institution means an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account;
  2. investment firm means a person as defined in point (1) of Article 4 (1) of Directive 2004/39/EC , which is subject to the requirements imposed by that Directive, excluding the following:
    1. credit institutions ;
    2. local firms;
    3. firms which are not authorised to provide the ancillary service referred to in point (1) of Section B of Annex I to Directive 2004/39/EC , which provide only one or more of the investment services and activities listed in points 1 , 2 , 4 and 5 of Section A of Annex I to that Directive, and which are not permitted to hold money or securities belonging to their clients and which for that reason may not at any time place themselves in debt with those clients;

    2. Where reference in this Regulation is made to real estate or residential or commercial immovable property or a mortgage on such property, it shall include shares in Finnish residential housing companies operating in accordance with the Finnish Housing Company Act of 1991 or subsequent equivalent legislation. Member States or their competent authorities may allow shares constituting an equivalent indirect holding of real estate to be treated as a direct holding of real estate provided that such an indirect holding is specifically regulated in the national law of the Member State concerned and that, when pledged as collateral, it provides equivalent protection to creditors.

    3. Trade finance as referred to in point (80) of paragraph 1 is generally uncommitted and requires satisfactory supporting transactional documentation for each drawdown request enabling refusal of the finance in the event of any doubt about credit-worthiness or the supporting transactional documentation. Repayment of trade finance exposures is usually independent of the borrower, the funds instead coming from cash received from importers or resulting from proceeds of the sales of the underlying goods.

PART ELEVEN

FINAL PROVISIONS

Article 521

Entry into force and date of application

1. This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union .

2. This Regulation shall apply from 1 January 2014, with the exception of:

  1. Article 8 (3) , Article 21 and Article 451 (1) , which shall apply from 1 January 2015;
  2. Article 413 (1) , which shall apply from 1 January 2016;
  3. the provisions of this Regulation that require the ESAs to submit to the Commission draft technical standards and the provisions of this Regulation that empower the Commission to adopt delegated acts or implementing acts, which shall apply from 31 December 2014.

    This Regulation shall be binding in its entirety and directly applicable in all Member States.

    Done at Brussels, 26 June 2013.

    For the European Parliament

    The President

    M. SCHULZ

    For the Council

    The President

    A. SHATTER


ANNEX

ANNEX I

Classification of off-balance sheet items

  1. Full risk:
    1. guarantees having the character of credit substitutes, (e.g. guarantees for the good payment of credit facilities);
    2. credit derivatives;
  2. Medium risk:
    1. trade finance off-balance sheet items, namely documentary credits issued or confirmed (see also Medium/low risk );
    2. other off-balance sheet items:
      1. shipping guarantees, customs and tax bonds;
      2. undrawn credit facilities (agreements to lend, purchase securities, provide guarantees or acceptance facilities) with an original maturity of more than one year;

ANNEX II

Types of derivatives

  1. Interest-rate contracts:
    1. single-currency interest rate swaps;
    2. basis-swaps;
  2. Foreign-exchange contracts and contracts concerning gold:
    1. cross-currency interest-rate swaps;
    2. forward foreign-exchange contracts;