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• Entry into force: 2013-06-28 (the publisher's qualifier, word for word: DATPUB +1 V ART 521.1)
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• Application: 2014-12-31 (the publisher's qualifier, word for word: MA/PART V ART 521.2.c)
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Page 21 of 22: Article 493 to Article 514.

725. 493 Article 493

     Article 493 Transitional provisions for large exposures 1. Until 26 June 2021, the provisions on large exposures as laid down in Articles 387 to 403 of this Regulation shall not apply to investment firms, the main business of which consists exclusively of the provision of investment services or activities in relation to the financial instruments set out in points (5), (6), (7), (9), (10) and (11) of Section C of Annex I to Directive 2014/65/EU and to which Directive 2004/39/EC of the European Parliament and of the Council did not apply on 31 December 2006. 2. By 31 December 2015, the Commission shall, on the basis of public consultations and in the light of discussions with the competent authorities, report to the European Parliament and the Council on: (a) an appropriate regime for the prudential supervision of investment firms whose main business consists exclusively of the provision of investment services or activities in relation to the commodity derivatives or derivatives contracts set out in points 5, 6, 7, 9 and 10 of Section C of Annex I to Directive 2004/39/EC; (b) the desirability of amending Directive 2004/39/EC to create a further category of investment firm whose main business consists exclusively of the provision of investment services or activities in relation to the financial instruments set out in points 5, 6, 7, 9 and 10 of Section C of Annex I to Directive 2004/39/EC relating to energy supplies. On the basis of that report, the Commission may submit proposals to amend this Regulation. 3. By way of derogation from Article 400(2) and (3), Member States may, for a transitional period until the entry into force of any legal act following the review in accordance with Article 507, but not after 31 December 2028, fully or partially exempt the following exposures from the application of Article 395(1): (a) covered bonds as referred to in Article 129; (b) asset items constituting claims on regional governments or local authorities of Member States where those claims would be assigned a 20 % risk weight under Part Three, Title II, Chapter 2 and other exposures to or guaranteed by those regional governments or local authorities, claims on which would be assigned a 20 % risk weight under Part Three, Title II, Chapter 2; (c) exposures, including participations or other kinds of holdings, incurred by an institution to its parent undertaking, to other subsidiaries of that parent undertaking or to its own subsidiaries and qualifying holdings, in so far as those undertakings are covered by the supervision on a consolidated basis to which the institution itself is subject, in accordance with this Regulation, Directive 2002/87/EC or with equivalent standards in force in a third country; exposures that do not meet those criteria, whether or not exempted from Article 395(1) of this Regulation, shall be treated as exposures to a third party; (d) asset items constituting claims on and other exposures, including participations or other kinds of holdings, to regional or central credit institutions with which the credit institution belongs to a network in accordance with legal or statutory provisions and which are responsible, under those provisions, for cash-clearing operations within the network; (e) asset items constituting claims on and other exposures to credit institutions incurred by credit institutions, one of which operates on a non-competitive basis and provides or guarantees loans under legislative programmes or its statutes, to promote specified sectors of the economy under some form of government oversight and restrictions on the use of the loans, provided that the respective exposures arise from such loans that are passed on to the beneficiaries via credit institutions or from the guarantees of these loans; (f) asset items constituting claims on and other exposures to institutions, provided that those exposures do not constitute such institutions' own funds, do not last longer than the following business day and are not denominated in a major trading currency; (g) asset items constituting claims on central banks in the form of required minimum reserves held at those central banks which are denominated in their national currencies; (h) asset items constituting claims on central governments in the form of statutory liquidity requirements held in government securities which are denominated and funded in their national currencies provided that, at the discretion of the competent authority, the credit assessment of those central governments assigned by a nominated ECAI is investment grade; (i) 50 % of bucket 4 off-balance-sheet documentary credits and of bucket 3 off-balance-sheet undrawn credit facilities referred to in Annex I with an original maturity of up to and including one year and subject to the competent authorities’ agreement, 80 % of guarantees other than loan guarantees which have a legal or regulatory basis and are given for their members by mutual guarantee schemes possessing the status of credit institutions; (j) legally required guarantees used when a mortgage loan financed by issuing mortgage bonds is paid to the mortgage borrower before the final registration of the mortgage in the land register, provided that the guarantee is not used as reducing the risk in calculating the risk- weighted exposure amounts; (k) assets items constituting claims on and other exposures to recognised exchanges. 4. By way of derogation from Article 395(1), competent authorities may allow institutions to incur any of the exposures provided for in paragraph 5 of this Article meeting the conditions set out in paragraph 6 of this Article, up to the following limits: (a) 100 % of the institution’s Tier 1 capital until 31 December 2018; (b) 75 % of the institution’s Tier 1 capital until 31 December 2019; (c) 50 % of the institution’s Tier 1 capital until 31 December 2020. The limits referred to in points (a), (b) and (c) of the first subparagraph shall apply to exposure values after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403. 5. The transitional arrangements set out in paragraph 4 shall apply to the following exposures: (a) asset items constituting claims on central governments, central banks, or public sector entities of Member States; (b) asset items constituting claims expressly guaranteed by central governments, central banks, or public sector entities of Member States; (c) other exposures to, or guaranteed by, central governments, central banks, or public sector entities of Member States; (d) asset items constituting claims on regional governments or local authorities of Member States treated as exposures to a central government in accordance with Article 115(2); (e) other exposures to, or guaranteed by, regional governments or local authorities of Member States treated as exposures to a central government in accordance with Article 115(2). For the purposes of points (a), (b) and (c) of the first subparagraph, the transitional arrangements set out in paragraph 4 of this Article shall apply only to asset items and other exposures to, or guaranteed by, public sector entities which are treated as exposures to a central government, a regional government or a local authority in accordance with Article 116(4). Where asset items and other exposures to, or guaranteed by, public sector entities are treated as exposures to a regional government or a local authority in accordance with Article 116(4), the transitional arrangements set out in paragraph 4 of this Article shall apply only where exposures to that regional government or local authority are treated as exposures to a central government in accordance with Article 115(2). 6. The transitional arrangements set out in paragraph 4 of this Article shall apply only where an exposure referred to in paragraph 5 of this Article meets all of the following conditions: (a) the exposure would be assigned a risk weight of 0 % in accordance with the version of Article 495(2) in force on 31 December 2017; (b) the exposure was incurred on or after 12 December 2017. 7. An exposure as referred to in paragraph 5 of this Article incurred before 12 December 2017 to which a risk weight of 0 % was assigned on 31 December 2017 in accordance with Article 495(2) shall be exempted from the application of Article 395(1).

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726. 494 Article 494

     Article 494 Transitional provisions concerning the requirement for own funds and eligible liabilities 1. By way of derogation from Article 92a, as from 27 June 2019 until 31 December 2021, institutions identified as resolution entities that are G-SII entities shall at all times satisfy the following requirements for own funds and eligible liabilities: (a) a risk-based ratio of 16 %, representing the own funds and eligible liabilities of the institution expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) and (4); (b) a non-risk-based ratio of 6 %, representing the own funds and eligible liabilities of the institution expressed as a percentage of the total exposure measure referred to in Article 429(4). 2. By way of derogation from Article 72b(3), as from 27 June 2019 until 31 December 2021, the extent to which eligible liabilities instruments referred to in Article 72b(3) may be included in eligible liabilities items shall be 2,5 % of the total risk exposure amount calculated in accordance with Article 92(3) and (4). 3. By way of derogation from Article 72b(3), until the resolution authority assesses for the first time the compliance with the condition set out in point (c) of that paragraph, liabilities shall qualify as eligible liabilities instruments up to an aggregate amount that does not exceed, until 31 December 2021, 2,5 % and, after that date, 3,5 % of the total risk exposure amount calculated in accordance with Article 92(3) and (4), provided that they meet the conditions set out in points (a) and (b) of Article 72b(3).

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727. 494A Article 494a

     Article 494a Grandfathering of issuances through special purpose entities 1. By way of derogation from Article 52, capital instruments not issued directly by an institution shall qualify as Additional Tier 1 instruments until 31 December 2021 only where all the following conditions are met: (a) the conditions set out in Article 52(1), except for the condition requiring that the instruments are directly issued by the institution; (b) the instruments are issued through an entity within the consolidation pursuant to Chapter 2 of Title II of Part One; (c) the proceeds are immediately available to the institution without limitation and in a form that satisfies the conditions set out in this paragraph. 2. By way of derogation from Article 63, capital instruments not issued directly by an institution shall qualify as Tier 2 instruments until 31 December 2021 only where all the following conditions are met: (a) the conditions set out in Article 63, except for the condition requiring that the instruments are directly issued by the institution; (b) the instruments are issued through an entity within the consolidation pursuant to Chapter 2 of Title II of Part One; (c) the proceeds are immediately available to the institution without limitation and in a form that satisfies the conditions set out in this paragraph.

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728. 494B Article 494b

     Article 494b Grandfathering of own funds instruments and eligible liabilities instruments 1. By way of derogation from Articles 51 and 52, instruments issued prior to 27 June 2019 shall qualify as Additional Tier 1 instruments at the latest until 28 June 2025, where they meet the conditions set out in Articles 51 and 52, except for the conditions referred to in points (p), (q) and (r) of Article 52(1). 2. By way of derogation from Articles 62 and 63, instruments issued prior to 27 June 2019 shall qualify as Tier 2 instruments at the latest until 28 June 2025, where they meet the conditions set out in Articles 62 and 63, except for the conditions referred to in points (n), (o) and (p) of Article 63. 3. By way of derogation from point (a) of Article 72a(1), liabilities issued prior to 27 June 2019 shall qualify as eligible liabilities instruments where they meet the conditions set out in Article 72b, except for the conditions referred to in point (b)(ii) and points (f) to (m) of Article 72b(2).

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729. 494C Article 494c

     Article 494c Grandfathering of senior securitisation positions By way of derogation from Article 270, an originator institution may calculate the risk-weighted exposure amounts of a senior securitisation position in accordance with Article 260, 262 or 264 where both the following conditions are met: (a) the securitisation was issued before 9 April 2021; (b) the securitisation met, on 8 April 2021, the conditions laid down in Article 270 as applicable at that date.

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730. 494D Article 494d

     Article 494d Reversion to less sophisticated approaches By way of derogation from Article 149, an institution may from 9 July 2024 until 10 July 2027, revert to less sophisticated approaches for one or more of the exposure classes referred to in Article 147(2), where all of the following conditions are met: (a) the institution already existed on 8 July 2024 and was authorised by its competent authority to treat those exposure classes under the IRB Approach; (b) the institution requests a reversion to a less sophisticated approach only once during that three-year period; (c) the request to revert to a less sophisticated approach is not made with a view to engaging in regulatory arbitrage; (d) the institution has formally notified the competent authority that it wishes to revert to a less sophisticated approach for those exposure classes at least six months before it effectively does revert to that approach; (e) the competent authority has not objected to the institution’s request to such reversion within three months of the receipt of the notification referred to in point (d).

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731. 495 Article 495

     Article 495 Treatment of equity exposures under the IRB Approach 1. By way of derogation from Article 107(1), institutions that have been granted permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures shall, until 31 December 2029 and without prejudice to Article 495a(3), calculate the risk-weighted exposure amount for each equity exposure for which they have been granted permission to apply the IRB Approach as the higher of the following: (a) the risk-weighted exposure amount calculated in accordance with Article 495a(1) and (2); (b) the risk-weighted exposure amount calculated under this Regulation in the version applicable on 8 July 2024. 2. Instead of applying the treatment laid down in paragraph 1, institutions that have been granted permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures may apply the treatment set out in Article 133 to all their equity exposures at any time until 31 December 2029. Where institutions apply the first subparagraph of this paragraph, Article 495a(1) and (2) shall not apply. For the purposes of this paragraph, the conditions to revert to the use of less sophisticated approaches set out in Article 149 shall not apply. 3. Institutions applying the treatment laid down in paragraph 1 of this Article shall calculate the expected loss amount in accordance with Article 158(7), (8) or (9), as applicable, in the version of those paragraphs applicable on 8 July 2024 and apply Article 36(1), point (d), and Article 62, point (d), as applicable, in the version of those points applicable on 8 July 2024 where the risk-weighted exposure amount calculated pursuant to paragraph 1, point (b), of this Article is higher than the risk-weighted exposure amount calculated pursuant to paragraph 1, point (a), of this Article. 4. Where institutions request permission to apply the IRB Approach to calculate the risk-weighted exposure amount for equity exposures, competent authorities shall not grant such permission after 31 December 2024.

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732. 495A Article 495a

     Article 495a Transitional arrangements for equity exposures 1. By way of derogation from the treatment laid down in Article 133(3), equity exposures shall be assigned the higher of the risk weight applicable on 8 July 2024, capped at 250 %, and the following risk-weights: (a) 100 % during the period from 1 January 2025 to 31 December 2025; (b) 130 % during the period from 1 January 2026 to 31 December 2026; (c) 160 % during the period from 1 January 2027 to 31 December 2027; (d) 190 % during the period from 1 January 2028 to 31 December 2028; (e) 220 % during the period from 1 January 2029 to 31 December 2029. 2. By way of derogation from the treatment laid down in Article 133(4), equity exposures shall be assigned the higher of the risk weight applicable on 8 July 2024 and the following risk weights: (a) 100 % during the period from 1 January 2025 to 31 December 2025; (b) 160 % during the period from 1 January 2026 to 31 December 2026; (c) 220 % during the period from 1 January 2027 to 31 December 2027; (d) 280 % during the period from 1 January 2028 to 31 December 2028; (e) 340 % during the period from 1 January 2029 to 31 December 2029. 3. By way of derogation from Article 133, institutions may continue to assign the same risk weight that was applicable on 8 July 2024 to equity exposures, including the part of the exposures not deducted from the own funds in accordance with Article 471 in the version of that Article applicable on 27 October 2021, to entities in which they have been a shareholder on 27 October 2021 for six consecutive years and over which they, or together with the network the institutions belong to, exercise significant influence or control within the meaning of Directive 2013/34/EU, or of the accounting standards to which an institution is subject under Regulation (EC) No 1606/2002, or as a result of a similar relationship between any natural or legal person or network of institutions and an undertaking, or where an institution has the capacity to appoint at least one member of the management body of the entity.

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733. 495B Article 495b

     Article 495b Transitional arrangements for specialised lending exposures 1. By way of derogation from Article 161(4), the LGD input floors applicable to specialised lending exposures treated under the IRB Approach where own estimates of LGD are used, shall be the applicable LGD input floors provided for in Article 161(4), multiplied by the following factors: (a) 50 % during the period from 1 January 2025 to 31 December 2027; (b) 80 % during the period from 1 January 2028 to 31 December 2028; (c) 100 % during the period from 1 January 2029 to 31 December 2029. 2. EBA shall prepare a report on the appropriate calibration of risk parameters, including the haircut parameter, applicable to specialised lending exposures under the IRB Approach, and in particular on own estimates of LGD and LGD input floors for each specific category of specialised lending exposures as referred to in Article 147(8). EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for different samples of institutions with different business and risk profiles. EBA shall recommend specific calibrations of risk parameters, including the haircut parameter, that would reflect the specific and different risk profile for each specific category of specialised lending exposures. EBA shall submit that report to the European Parliament to the Council and to the Commission by 10 July 2026. On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027. 3. By way of derogation from Article 122a(3), point (a), specialised lending exposures as referred to in that point for which a directly applicable credit assessment by a nominated ECAI is not available may, until 31 December 2032, be assigned a risk weight of 80 %, where the adjustment to own funds requirements for credit risk referred to in Article 501a is not applied and the exposure is deemed to be of high quality when taking into account all of the following criteria: (a) the obligor can meet its financial obligations even under severely stressed conditions due to the presence of all of the following features: (i) adequate exposure-to-value of the exposure; (ii) conservative repayment profile of the exposure; (iii) commensurate remaining lifetime of the assets upon full pay-out of the exposure or alternatively recourse to a protection provider with high creditworthiness; (iv) low refinancing risk of the exposure by the obligor or that risk is adequately mitigated by a commensurate residual asset value or recourse to a protection provider with high creditworthiness; (v) the obligor has contractual restrictions over its activity and funding structure; (vi) the obligor uses derivatives only for risk-mitigation purposes; (vii) material operating risks are properly managed; (b) the contractual arrangements on the assets provide lenders with a high degree of protection, including the following features: (i) the lenders have a legally enforceable first-ranking right over the assets financed and, where applicable, over the income that they generate; (ii) there are contractual restrictions on the ability of the obligor to make changes to the asset which would have a negative impact on its value; (iii) where the asset is under construction, the lenders have a legally enforceable first-ranking right over the assets and the underlying construction contracts; (c) the assets being financed meet all of the following standards to operate in a sound and effective manner: (i) the technology and design of the asset are tested; (ii) all necessary permits and authorisations for the operation of the assets have been obtained; (iii) where the asset is under construction, the obligor has adequate safeguards on the agreed specifications, budget and completion date of the asset, including strong completion guarantees or the involvement of an experienced constructor and adequate contract provisions for liquidated damages. 4. EBA shall prepare a report, analysing the following: (a) the evolution of the trends and conditions in markets for object finance in the Union; (b) the effective riskiness of the object finance exposures over a full economic cycle; (c) the impact on own funds requirements of the treatment set out in Article 122a(3), point (a), for object finance exposures, without taking into account Article 465(1); (d) the appropriateness of the definition of the sub-class of ‘high quality object finance’ and to assign to that sub-class of exposures a different prudential treatment. EBA shall submit that report to the European Parliament, to the Council and to the Commission by 31 December 2030. On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.

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734. 495C Article 495c

     Article 495c Transitional arrangements for leasing exposures as a credit risk mitigation technique 1. By way of derogation from Article 230, the applicable value of Hc corresponding to ‘other physical collateral’ for exposures referred to in Article 199(7) where the asset leased corresponds to the ‘other physical collateral’ type of funded credit protection, shall be the value of Hc for ‘other physical collateral’ provided for in Article 230(2), Table 1, multiplied by the following factors: (a) 50 % during the period from 1 January 2025 to 31 December 2027; (b) 80 % during the period from 1 January 2028 to 31 December 2028; (c) 100 % during the period from 1 January 2029 to 31 December 2029. 2. EBA shall prepare a report on the appropriate calibrations of risk parameters associated with leasing exposures under the IRB Approach, and of risk weights under the Standardised Approach, and in particular on the LGDs and Hc provided for in Article 230. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for exposures associated with different types of properties leased and different types of institutions practicing leasing activities. EBA shall submit that report to the European Parliament, to the Council and to the Commission by 10 July 2027. On the basis of that report, and taking into account the internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2028.

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735. 495D Article 495d

     Article 495d Transitional arrangements for unconditional cancellable commitments 1. By way of derogation from Article 111(2), institutions shall calculate the exposure value of an off-balance-sheet item in the form of unconditionally cancellable commitment by multiplying the percentage provided for in that Article by the following factors: (a) 0 % during the period from 1 January 2025 to 31 December 2029; (b) 25 % during the period from 1 January 2030 to 31 December 2030; (c) 50 % during the period from 1 January 2031 to 31 December 2031; (d) 75 % during the period from 1 January 2032 to 31 December 2032. 2. EBA shall prepare a report assessing whether the derogation referred to in paragraph 1, point (a), should be extended beyond 31 December 2032 and specifying, where necessary, the conditions under which that derogation should be maintained. EBA shall submit that report to the European Parliament, to the Council and to the Commission by 31 December 2028. On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the impact of those standards on financial stability, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.

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736. 495E Article 495e

     Article 495e Transitional arrangements for ECAI credit assessments of institutions By way of derogation from Article 138, point (g), competent authorities may allow institutions to continue using an ECAI credit assessment in relation to an institution which incorporates assumptions of implicit government support until 31 December 2029.

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737. 495F Article 495f

     Article 495f Transitional arrangements for property revaluation requirements By way of derogation from Article 229(1), points (a) to (d), for exposures secured by residential property or commercial immovable property granted before 1 January 2025, institutions may continue to value residential property or commercial immovable property at or less than the market value, or in those Member States that have provided for rigorous criteria for the assessment of the mortgage lending value in statutory or regulatory provisions, the mortgage lending value of that property, until a review of the property value is required in accordance with Article 208(3), or 31 December 2027, whichever is earlier.

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738. 495G Article 495g

     Article 495g Transitional arrangements for certain public guarantees schemes By way of derogation from Articles 183(1) and 213(1), a guarantee that can be cancelled in the event of fraud by the obligor or the extent of credit protection of which can be diminished in such event, shall be considered to meet the requirements referred to in Article 183(1), point (d), and in Article 213(1), point (c), where the guarantee was provided by an entity referred to in Article 214(2), point (a), no later than 31 December 2024.

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739. 495H Article 495h

     Article 495h Transitional arrangements for the use of the alternative internal model approach for market risk By way of derogation from Article 325az(2), point (d), institutions may use, until 1 January 2026, the alternative internal model approach to calculate their own funds requirements for market risk for trading desks that do not meet the requirements laid down in Article 325bg.

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740. 496 Article 496

     Article 496 Own funds requirements for covered bonds 1. Competent authorities may waive in full or in part the 10 % limit for senior units issued by French Fonds Communs de Créances or by securitisation entities which are equivalent to French Fonds Communs de Créances laid down in points (d) and (f) of Article 129(1), provided that both of the following conditions are fulfilled: (a) the securitised residential property or commercial immovable property exposures were originated by a member of the same consolidated group of which the issuer of the covered bonds is a member, or by an entity affiliated to the same central body to which the issuer of the covered bonds is affiliated, where that common group membership or affiliation shall be determined at the time the senior units are made collateral for covered bonds; (b) a member of the same consolidated group of which the issuer of the covered bonds is a member, or an entity affiliated to the same central body to which the issuer of the covered bonds is affiliated, retains the whole first loss tranche supporting those senior units. 2. Until 31 December 2014, for the purposes of point (c) of Article 129(1), the senior unsecured exposures of institutions which qualified for a 20 % risk weight under national law before 28 June 2013 shall be considered to qualify for credit quality step 1. 3. Until 31 December 2014, for the purposes of Article 129(5), the senior unsecured exposures of institutions which qualified for a 20 % risk weight under national law before 28 June 2013shall be considered to qualify for a 20 % risk weight.

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741. 497 Article 497

     Article 497 Own funds requirements for exposures to CCPs 1. Where a third-country CCP applies for recognition in accordance with Article 25 of Regulation (EU) No 648/2012, institutions may consider that CCP as a QCCP from the date on which it submitted its application for recognition to ESMA and until one of the following dates: (a) where the Commission has already adopted an implementing act referred to in Article 25(6) of Regulation (EU) No 648/2012 in relation to the third country in which the CCP is established and that implementing act has entered into force, two years after the date of submission of the application; (b) where the Commission has not yet adopted an implementing act referred to in Article 25(6) of Regulation (EU) No 648/2012 in relation to the third country in which the CCP is established or where that implementing act has not yet entered into force, the earlier of the following dates: (i) two years after the date of entry into force of the implementing act; (ii) for CCPs that submitted the application after 27 June 2019, two years after the date of submission of the application; (iii) for those CCPs that submitted the application before 27 June 2019, 28 June 2021. 2. Until the expiration of the deadline referred to in paragraph 1 of this Article, where a CCP referred to in that paragraph does not have a default fund and does not have in place a binding arrangement with its clearing members that allows it to use all or part of the initial margin received from its clearing members as if they were pre-funded contributions, the institution shall substitute the formula for calculating the own funds requirement in Article 308(2) with the following one: KCMimaxKCCPIMiDFCCPIM ; 8 %2 %IMi where: KCMithe own funds requirement;KCCPthe hypothetical capital of the QCCP communicated to the institution by the QCCP in accordance with Article 50c of Regulation (EU) No 648/2012;DFCCPthe pre-funded financial resources of the CCP communicated to the institution by the CCP in accordance with Article 50c of Regulation (EU) No 648/2012;ithe index denoting the clearing member;IMithe initial margin posted with the CCP by clearing member i; andIMthe total amount of initial margin communicated to the institution by the CCP in accordance with Article 89(5a) of Regulation (EU) No 648/2012. 3. In exceptional circumstances, where it is necessary and proportionate in order to avoid disruption to international financial markets, the Commission may adopt, by way of implementing acts, and subject to the examination procedure referred to in Article 464(2), a decision to extend once, by 12 months, the transitional provisions set out in paragraph 1 of this Article.

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742. 498 Article 498

     Article 498 Exemption for Commodities dealers Until 26 June 2021, the provisions on own funds requirements as set out in this Regulation shall not apply to investment firms the main business of which consists exclusively of the provision of investment services or activities in relation to the financial instruments set out in points (5), (6), (7), (9), (10) and (11) of Section C of Annex I to Directive 2014/65/EU and to which Directive 2004/39/EC did not apply on 31 December 2006.

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743. 499 Article 499

     Article 499 Leverage 1. By way of derogation from Articles 429 and 430, during the period between 1 January 2014 and 31 December 2021, institutions shall calculate and report the leverage ratio by using both of the following as the capital measure: (a) Tier 1 capital; (b) Tier 1 capital, subject to the derogations laid down in Chapters 1 and 2 of this Title. 2. By way of derogation from Article 451(1), institutions may choose whether to disclose the information on the leverage ratio based on either just one or both of the definitions of the capital measure specified in points (a) and (b) of paragraph 1 of this Article. Where institutions change their decision on which leverage ratio to disclose, the first disclosure that occurs after such change shall contain a reconciliation of the information on all leverage ratios disclosed up to the moment of the change. 3. By way of derogation from Article 429(2), during the period from 1 January 2014 to 31 December 2017, competent authorities may permit institutions to calculate the end-of-quarter leverage ratio where they consider that institutions may not have data of sufficiently good quality to calculate a leverage ratio that is an arithmetic mean of the monthly leverage ratios over a quarter.

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744. 500 Article 500

     Article 500 Adjustment for massive disposals 1. By way of derogation from point (a) of Article 181(1), an institution may adjust its LGD estimates by partly or fully offsetting the effect of massive disposals of defaulted exposures on realised LGDs up to the difference between the average estimated LGDs for comparable exposures in default that have not been finally liquidated and the average realised LGDs including on the basis of the losses realised due to massive disposals, as soon as all the following conditions are met: (a) the institution has notified the competent authority of a plan providing the scale, composition and the dates of the disposals of defaulted exposures; (b) the dates of the disposals of defaulted exposures are after 23 November 2016 but not later than 31 December 2024; (c) the cumulative amount of defaulted exposures disposed of since the date of the first disposal in accordance with the plan referred to in point (a) has surpassed 20 % of the outstanding amount of all defaulted exposures as of the date of the first disposal referred to in points (a) and (b). The adjustment referred to in the first subparagraph may only be carried out until 31 December 2024 and its effects may last for as long as the corresponding exposures are included in the institution’s own LGD estimates. 2. Institutions shall notify the competent authority without delay when the condition set out in point (c) of paragraph 1 has been met. 3. The Commission shall, by 31 December 2026, and every two years thereafter, assess whether the level of defaulted exposures in the balance sheets of the institutions has increased significantly, whether it expects a significant deterioration in the institutions’ asset quality, and whether the degree of development of secondary markets for defaulted exposures is not adequate to ensure efficient disposals of defaulted exposures by institutions, also taking into consideration the regulatory developments on securitisation. The Commission shall review the appropriateness of the derogation set out in paragraph 1 and shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to extend, reintroduce or amend, as needed, the adjustment provided for in this Article.

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745. 500A Article 500a

     Article 500a Temporary treatment of public debt issued in the currency of another Member State 1. By way of derogation from Article 114(2), until 31 December 2026, for exposures to the central governments and central banks of Member States, where those exposures are denominated and funded in the domestic currency of another Member State, the following apply: (a) until 31 December 2024, the risk weight applied to the exposure values shall be 0 % of the risk weight assigned to those exposures in accordance with Article 114(2); (b) in 2025, the risk weight applied to the exposure values shall be 20 % of the risk weight assigned to those exposures in accordance with Article 114(2); (c) in 2026, the risk weight applied to the exposure values shall be 50 % of the risk weight assigned to those exposures in accordance with Article 114(2). 2. By way of derogation from Articles 395(1) and 493(4), competent authorities may allow institutions to incur exposures referred to in paragraph 1 of this Article, up to the following limits: (a) 100 % of the institution’s Tier 1 capital until 31 December 2025; (b) 75 % of the institution’s Tier 1 capital between 1 January and 31 December 2026; (c) 50 % of the institution’s Tier 1 capital between 1 January and 31 December 2027. The limits referred to in points (a), (b) and (c) of the first subparagraph of this paragraph shall apply to exposure values after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403. 3. By way of derogation from point (ii) of point (d) of Article 150(1), after receiving the prior permission of the competent authorities and subject to the conditions laid down in Article 150, institutions may also apply the Standardised Approach to exposures to central governments and central banks, where those exposures are assigned a 0 % risk weight under paragraph 1 of this Article.

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746. 500B Article 500b

     Article 500b Temporary exclusion of certain exposures to central banks from the total exposure measure in view of the COVID-19 pandemic 1. By way of derogation from Article 429(4), until 27 June 2021, an institution may exclude from its total exposure measure the following exposures to the institution’s central bank, subject to the conditions set out in paragraphs 2 and 3 of this Article: (a) coins and banknotes constituting legal currency in the jurisdiction of the central bank; (b) assets representing claims on the central bank, including reserves held at the central bank. The amount excluded by the institution shall not exceed the daily average amount of the exposures listed in points (a) and (b) of the first subparagraph over the most recent full reserve maintenance period of the institution’s central bank. 2. An institution may exclude the exposures listed in paragraph 1 where the institution’s competent authority has determined, after consultation with the relevant central bank, and publicly declared that exceptional circumstances exist that warrant the exclusion in order to facilitate the implementation of monetary policies. The exposures to be excluded under paragraph 1 shall meet both of the following conditions: (a) they are denominated in the same currency as the deposits taken by the institution; (b) their average maturity does not significantly exceed the average maturity of the deposits taken by the institution. An institution that excludes exposures to its central bank from its total exposure measure in accordance with paragraph 1 shall also disclose the leverage ratio it would have if it did not exclude those exposures.

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747. 500C Article 500c

     Article 500c Exclusion of overshootings from the calculation of the back-testing addend in view of the COVID-19 pandemic By way of derogation from Article 325bf, competent authorities may, in exceptional circumstances and in individual cases, permit institutions to exclude the overshootings evidenced by the institution’s back-testing on hypothetical or actual changes from the calculation of the addend set out in Article 325bf, provided that those overshootings do not result from deficiencies in the internal model and provided that they occurred between 1 January 2020 and 31 December 2021.

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748. 500D Article 500d

     Article 500d Temporary calculation of the exposure value of regular-way purchases and sales awaiting settlement in view of the COVID-19 pandemic 1. By way of derogation from Article 429(4), until 27 June 2021, institutions may calculate the exposure value of regular-way purchases and sales awaiting settlement in accordance with paragraphs 2, 3 and 4 of this Article. 2. Institutions shall treat cash related to regular-way sales and securities related to regular-way purchases which remain on the balance sheet until the settlement date as assets in accordance with point (a) of Article 429(4). 3. Institutions that, in accordance with the applicable accounting framework, apply trade date accounting to regular-way purchases and sales which are awaiting settlement shall reverse out any offsetting between cash receivables for regular-way sales awaiting settlement and cash payables for regular-way purchases awaiting settlement allowed under that accounting framework. After institutions have reversed out the accounting offsetting, they may offset between those cash receivables and cash payables where the related regular-way sales and purchases are both settled on a delivery-versus-payment basis. 4. Institutions that, in accordance with the applicable accounting framework, apply settlement date accounting to regular-way purchases and sales which are awaiting settlement shall include in the total exposure measure the full nominal value of commitments to pay related to regular-way purchases. Institutions may offset the full nominal value of commitments to pay related to regular-way purchases by the full nominal value of cash receivables related to regular-way sales awaiting settlement only where both of the following conditions are met: (a) both the regular-way purchases and sales are settled on a delivery-versus-payment basis; (b) the financial assets bought and sold that are associated with cash payables and receivables are measured at fair value through profit or loss and included in the institution’s trading book. 5. For the purposes of this Article, ‘regular-way purchase or sale’ means a purchase or sale of a security under a contract for which the terms require the delivery of the security within the period established generally by law or convention in the marketplace concerned.

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749. 501 Article 501

     Article 501 Adjustment of risk-weighted non-defaulted SME exposures 1. Institutions shall adjust the risk-weighted exposure amounts for non-defaulted exposures to an SME (RWEA), which are calculated in accordance with Chapter 2 or 3 of Title II of Part Three, as applicable, in accordance with the following formula: RWEA*RWEAminE*; EUR 25000000,7619maxE*EUR 2500000; 00,85E* where: RWEA*the RWEA adjusted by an SME supporting factor; andE* is either of the following: (a) the total amount owed to the institution, its subsidiaries, its parent undertakings and other subsidiaries of those parent undertakings, including any exposure in default, but excluding claims or contingent claims secured on residential property collateral, by the SME or the group of connected clients of the SME; (b) where the total amount referred to in point (a) is equal to 0, the amount of claims or contingent claims against the SME or the group of connected clients of the SME that are secured on residential property collateral and that are excluded from the calculation of the total amount referred to in that point. 2. For the purposes of this Article: (a) the exposure to an SME shall be included either in the retail or in the corporates or secured by mortgages on immovable property exposure classes but excluding ADC exposures; (b) an SME shall have the meaning laid down in Article 5, point (9); (c) institutions shall take reasonable steps to correctly determine E* and obtain the information required under point (b).

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750. 501A Article 501a

     Article 501a Adjustment to own funds requirements for credit risk for exposures to entities that operate or finance physical structures or facilities, systems and networks that provide or support essential public services 1. Own funds requirements for credit risk calculated in accordance with Title II of Part III shall be multiplied by a factor of 0,75, provided that the exposure complies with all the following criteria: (a) the exposure is assigned to the exposure class referred to in Article 112, point (g), or to any of the exposure classes referred to in Article 147(2), point (c)(i), (ii) or (iii), with the exclusion of exposures in default; (b) the exposure is to an entity which was created specifically to finance or operate physical structures or facilities, systems and networks that provide or support essential public services; (c) the source of repayment of the obligation is represented for not less than two thirds of its amount by the income generated by the assets being financed, rather than the independent capacity of a broader commercial enterprise, or by subsidies, grants or funding provided by one or more of the entities listed in points (b)(i) and (b)(ii) of paragraph 2; (d) the obligor can meet its financial obligations even under severely stressed conditions that are relevant for the risk of the project; (e) the cash flows that the obligor generates are predictable and cover all future loan repayments during the duration of the loan; (f) the obligor’s refinancing risk is low or adequately mitigated, taking into account any subsidies, grants or funding provided by one or more of the entities listed in paragraph 2, points (b)(i) and (ii); (g) the contractual arrangements provide lenders with a high degree of protection including the following: (i) where the revenues of the obligor are not funded by payments from a large number of users, the contractual arrangements shall include provisions that effectively protect lenders against losses resulting from the termination of the project by the party which agrees to purchase the goods or services provided by the obligor; (ii) the obligor has sufficient reserve funds fully funded in cash or other financial arrangements with highly rated guarantors to cover the contingency funding and working capital requirements over the lifetime of the assets referred to in point (b) of this paragraph; (iii) the lenders have a substantial degree of control over the assets and the income generated by the obligor; (iv) the lenders have the benefit of security to the extent permitted by applicable law in assets and contracts critical to the infrastructure business or have alternative mechanisms in place to secure their position; (v) equity is pledged to lenders such that they are able to take control of the entity upon default; (vi) the use of net operating cash flows after mandatory payments from the project for purposes other than servicing debt obligations is restricted; (vii) there are contractual restrictions on the ability of the obligor to perform activities that may be detrimental to lenders, including the restriction that new debt cannot be issued without the consent of existing debt providers; (h) the obligation is senior to all other claims other than statutory claims and claims from derivatives counterparties; (i) where the obligor is in the construction phase, the following criteria shall be fulfilled by the equity investor, or where there is more than one equity investor, the following criteria shall be fulfilled by a group of equity investors as a whole: (i) the equity investors have a history of successfully overseeing infrastructure projects, the financial strength and the relevant expertise; (ii) the equity investors have a low risk of default, or there is a low risk of material losses for the obligor as a result of their default; (iii) there are adequate mechanisms in place to align the interest of the equity investors with the interests of lenders; (j) the obligor has adequate safeguards to ensure completion of the project according to the agreed specification, budget or completion date; including strong completion guarantees or the involvement of an experienced constructor and adequate contract provisions for liquidated damages; (k) where operating risks are material, they are properly managed; (l) the obligor uses tested technology and design; (m) all necessary permits and authorisations have been obtained; (n) the obligor uses derivatives only for risk-mitigation purposes; (o) for exposures originated after 1 January 2025 the obligor has carried out an assessment that the assets being financed contribute positively to one or more of the environmental objectives set out in Article 9 of Regulation (EU) 2020/852 and do not significantly harm the other objectives set out in that Article, or that the assets being financed do not significantly harm any of the environmental objectives set out in that Article. 2. For the purposes of point (e) of paragraph 1, the cash flows generated shall not be considered predictable unless a substantial part of the revenues satisfies the following conditions: (a) one of the following criteria is met: (i) the revenues are availability-based; (ii) the revenues are subject to a rate-of-return regulation; (iii) the revenues are subject to a take-or-pay contract; (iv) the level of output or the usage and the price shall independently meet one of the following criteria: it is regulated, it is contractually fixed, it is sufficiently predictable as a result of low demand risk; (b) where the revenues of the obligor are not funded by payments from a large number of users, the party which agrees to purchase the goods or services provided by the obligor shall be one of the following: (i) a central bank, a central government, a regional government or a local authority, provided that they are assigned a risk weight of 0 % in accordance with Articles 114 and 115 or are assigned an ECAI rating with a credit quality step of at least 3; (ii) a public sector entity, provided that it is assigned a risk weight of 20 % or below in accordance with Article 116 or is assigned an ECAI rating with a credit quality step of at least 3; (iii) a multilateral development bank referred to in Article 117(2); (iv) an international organisation referred to in Article 118; (v) a corporate entity which has been assigned an ECAI rating with a credit quality step of at least 3; (vi) an entity that is replaceable without a significant change in the level and timing of revenues. 3. Institutions shall report to competent authorities every six months on the total amount of exposures to infrastructure project entities calculated in accordance with paragraph 1 of this Article. 4. The Commission shall, by 28 June 2022 report on the impact of the own funds requirements laid down in this Regulation on lending to infrastructure project entities and shall submit that report to the European Parliament and to the Council, together with a legislative proposal, if appropriate. 5. For the purposes of paragraph 4, EBA shall report on the following to the Commission: (a) an analysis of the evolution of the trends and conditions in markets for infrastructure lending and project finance over the period referred to in paragraph 4; (b) an analysis of the effective riskiness of entities referred to in point (b) of paragraph 1 over a full economic cycle; (c) the consistency of own funds requirements laid down in this Regulation with the outcomes of the analysis under points (a) and (b) of this paragraph.

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751. 501B Article 501b

     Article 501b Derogation from reporting requirements By way of derogation from Article 430, during the period between the date of application of the relevant provisions of this Regulation and the date of the first remittance of reports specified in the implementing technical standards referred to in that Article, a competent authority may waive the requirement to report information in the format specified in the templates contained in the implementing act referred to in Article 430(7) where those templates have not been updated to reflect the provisions of this Regulation.

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752. 501C Article 501c

     Article 501c Prudential treatment of exposures to environmental or social factors 1. EBA, after consulting the ESRB, shall, on the basis of available data, assess whether the dedicated prudential treatment of exposures related to assets or liabilities, subject to the impact of environmental or social factors is to be adjusted. In particular, EBA shall assess: (a) the availability and accessibility of reliable and consistent ESG data for each exposure class determined in accordance with Part Three, Title II; (b) in consultation with EIOPA, the feasibility of introducing a standardised methodology to identify and qualify the exposures, for each exposure class determined in accordance with Part Three, Title II, based on a common set of principles to ESG risk classification, using the information on transition risk and physical risk indicators made available by sustainability disclosure reporting frameworks adopted in the Union and where available internationally, the guidance and conclusions coming from the supervisory stress-testing or scenario analysis of climate-related financial risks conducted by EBA or the competent authorities and if appropriately reflecting the ESG risks, the relevant ESG score of the credit risk rating by a nominated ECAI; (c) the effective riskiness of exposures related to assets and activities subject to the impact of environmental or social factors compared to the riskiness of other exposures and the possible additional and more comprehensive revisions to the framework that should be considered, taking into consideration the developments agreed at international level by the BCBS; (d) the potential short, medium and long-term effects of an adjusted dedicated prudential treatment of exposures related to assets and activities subject to the impact of environmental or social factors on financial stability and bank lending in the Union; (e) the targeted enhancements that could be considered within the current prudential framework. 2. EBA shall submit successive reports on its findings to the European Parliament, to the Council and to the Commission by the following dates: (a) 9 July 2024 for the assessments required under paragraph 1, point (e); (b) 31 December 2024 for the assessments required under paragraph 1, points (a) and (b); (c) 31 December 2025 for the assessments required under paragraph 1, points (c) and (d). On the basis of those EBA reports, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2026.

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753. 501D Article 501d

     Article 501d Transitional provisions on the prudential treatment of crypto-assets 1. By 30 June 2025, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to introduce a dedicated prudential treatment for crypto-asset exposures, taking into account the international standards and Regulation (EU) 2023/1114. That legislative proposal shall include the following: (a) criteria for assigning crypto-assets to different crypto-asset categories based on their risk characteristics and compliance with specific conditions; (b) specific own funds requirements for all risks entailed by different crypto-assets; (c) an aggregate limit for exposures to specific types of crypto-assets; (d) specific leverage ratio requirements for crypto-asset exposures; (e) specific supervisory powers as regards crypto-asset exposure assignment, monitoring and calculation of the own funds requirements; (f) specific liquidity requirements for crypto-asset exposures; (g) disclosure and reporting requirements. 2. Until the date of application of the legislative act referred to in paragraph 1, institutions shall calculate their own funds requirements for crypto-asset exposures as follows: (a) crypto-asset exposures to tokenised traditional assets shall be treated as exposures to the traditional assets that they represent; (b) exposures to asset-referenced tokens whose issuers comply with Regulation (EU) 2023/1114 and that reference one or more traditional assets shall be assigned a risk weight of 250 %; (c) crypto-asset exposures other than those referred to in points (a) and (b) shall be assigned a risk weight of %. By way of derogation from the first subparagraph, point (a), crypto-asset exposures to tokenised traditional assets whose values depend on any other crypto-assets shall be assigned to point (c). 3. The value of an institution’s total exposure to crypto-assets other than those referred to in paragraph 1, points (a) and (b), shall not exceed 1 % of the institution’s Tier 1 capital. 4. An institution that exceeds the limit set out in paragraph 3 shall immediately notify the competent authority of the breach and shall demonstrate to the satisfaction of the competent authority a timely return to compliance. 5. EBA shall develop draft regulatory technical standards to specify the technical elements necessary for institutions to calculate their own funds requirements in accordance with the approaches set out in paragraph 2, points (b) and (c), including how to calculate the value of the exposures and how to aggregate short and long exposures for the purposes of paragraphs 2 and 3. In developing those draft regulatory technical standards, EBA shall take into consideration the related internationally agreed standards developed by the BCBS as well as existing authorisations in the Union under Regulation (EU) 2023/1114. EBA shall submit those draft regulatory technical standards to the Commission by 10 July 2025. Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010. 6. For the calculation of their own funds requirements for crypto-asset exposures, institutions shall not apply the deduction referred to in Article 36(1), point (b).

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754. 502 Article 502

     Article 502 Cyclicality of capital requirements The Commission, in cooperation with EBA, ESRB and the Member States, and taking into account the opinion of the ECB, shall periodically monitor whether this Regulation taken as a whole, together with Directive 2013/36/EU, has significant effects on the economic cycle and, in the light of that examination, shall consider whether any remedial measures are justified. By 31 December 2013, EBA shall report to the Commission on whether, and if so how, methodologies of institutions under the IRB Approach should converge with a view to more comparable capital requirements while mitigating pro-cyclicality. Based on that analysis and taking into account the opinion of the ECB, the Commission shall draw up a biennial report and submit it to the European Parliament and to the Council, together with any appropriate proposals. Contributions from credit taking and credit lending parties shall be adequately acknowledged when the report is drawn up. By 31 December 2014, the Commission shall review, and report on, the application of Article 33(1)(c) and shall submit that report to the European Parliament and the Council, together with a legislative proposal, if appropriate. With respect to the potential deletion of Article 33(1)(c) and its potential application at the Union level, the review shall in particular ensure that sufficient safeguards are in place to ensure financial stability in all Member States.

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755. 503 Article 503

     Article 503 Own funds requirements for exposures in the form of covered bonds 1. The Commission shall, by 31 December 2014, after consulting EBA, report to the European Parliament and to the Council, together with any appropriate proposals, on whether the risk weights laid down in Article 129 and the own funds requirements for specific risk in Article 336(3) are adequate for all the instruments that qualify for these treatments and whether the criteria in Article 129 are appropriate. 2. The report and the proposals referred to in paragraph 1 shall take into account: (a) the extent to which the current regulatory capital requirements applicable to covered bonds adequately differentiate between variances in the credit quality of covered bonds and the collateral against which they are secured, including the extent of variations across Member States; (b) the transparency of the covered bond market and the extent to which this facilitates comprehensive internal analysis by investors in respect of the credit risk of covered bonds and the collateral against which they are secured and the asset segregation in case of the issuer's insolvency, including the mitigating effects of the underlying strict national legal framework in accordance with Article 129 of this Regulation and Article 52(4) of Directive 2009/65/EC on the overall credit quality of a covered bond and its implications on the level of transparency needed by investors; and (c) the extent to which covered bond issuance by a credit institution impacts on the credit risk to which other creditors of the issuing institution are exposed. 3. The Commission shall, by 31 December 2014, after consulting EBA, report to the European Parliament and the Council on whether loans secured by aircrafts (aircraft liens) and residential loans secured by a guarantee but not secured by a registered mortgage, should under certain conditions be considered an eligible asset in accordance with Article 129. 4. The Commission shall, by 31 December 2016, review the appropriateness of the derogation set out in Article 496 and, if relevant, the appropriateness of extending similar treatment to any other form of covered bond. In the light of that review, the Commission may, if appropriate, adopt delegated acts in accordance with Article 462 to make that derogation permanent, or make legislative proposals to extend it to other forms of covered bonds.

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756. 504 Article 504

     Article 504 Capital instruments subscribed by public authorities in emergency situations The Commission shall, by 31 December 2016, after consulting EBA, report to the European Parliament and the Council, together with any appropriate proposals, whether the treatment set out in Article 31 needs to be amended or deleted.

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757. 504A Article 504a

     Article 504a Holdings of eligible liabilities instruments By 28 June 2022, EBA shall report to the Commission on the amounts and distribution of holdings of eligible liabilities instruments among institutions identified as G-SIIs or O-SIIs and on potential impediments to resolution and the risk of contagion in relation to those holdings. Based on the report by EBA the Commission shall, by 28 June 2023, report to the European Parliament and to the Council on the appropriate treatment of such holdings, accompanied by a legislative proposal, where appropriate.

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758. 505 Article 505

     Article 505 Review of agricultural financing 1. By 31 December 2030, EBA shall prepare a report on the impact of the requirements of this Regulation on agricultural financing, including on: (a) the appropriateness of a dedicated risk weight for own funds requirements for credit risk calculated in accordance with Part Three, Title II, for exposures to an agricultural enterprise; (b) where applicable, prudentially justified criteria for the application of such a dedicated risk weight, including farming practices, as well as the inclusion of exposures in the corporates, retail or secured by mortgages on immovable property exposure classes; (c) the alignment with the ‘farm to fork’ strategy set out in the communication of the Commission of 20 May 2020 entitled ‘A Farm to Fork Strategy for a fair, healthy and environmentally-friendly food system’ and the respective environmental impact within the meaning of Regulation (EU) 2020/852, in particular with the indicators as collected in the Union’s Farm Accountancy Data Network, showing contribution scores with regard to: (i) net greenhouse gas emissions per hectare; (ii) pesticides and fertilisers usage per hectare; (iii) soil’s minerals efficiency ratios, including carbon, ammonia, phosphate and nitrogen per hectare; (iv) water use efficiency; (v) a confirmation of positive impact on the indicators referred to in points (i) to (iv) of this point with an organic production logo of the European Union referred to in Regulation (EU) 2018/848 of the European Parliament and of the Council. 2. Taking into account the EBA report referred to in paragraph 1, the Commission shall submit the report to the European Parliament and to the Council. Where appropriate, that report shall be accompanied by a legislative proposal to amend this Regulation in order to mitigate its negative effects on agricultural financing. 3. EBA shall also prepare an intermediate report on the impact of the requirements of this Regulation on agricultural financing by 31 December 2027.

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759. 506 Article 506

     Article 506 Credit risk — credit insurance By 30 June 2024, EBA shall, in close cooperation with EIOPA, report to the Commission on the eligibility and use of credit insurance policy as a credit risk mitigation technique, including on: (a) the appropriateness of the associated risk parameters referred to in Part Three, Title II, Chapters 3 and 4; (b) an analysis of the effective and observed riskiness of credit risk exposures where a credit insurance was recognised as a credit risk mitigation technique; (c) the consistency of own funds requirements laid down in this Regulation with the outcomes of the analysis under points (a) and (b). On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal to amend the treatment applicable to credit insurance referred to in Part Three, Title II, by 31 December 2024.

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760. 506A Article 506a

     Article 506a CIUs with an underlying portfolio of euro area sovereign bonds In close cooperation with the ESRB and EBA, the Commission shall publish a report by 31 December 2021 in which it shall assess whether changes to the regulatory framework are needed to promote the market for, and bank purchases of, exposures in the form of units or shares in CIUs with an underlying portfolio consisting exclusively of sovereign bonds of Member States whose currency is the euro, where the relative weight of each Member States’ sovereign bonds in the total portfolio of the CIU is equal to the relative weight of each Member States’ capital contribution to the ECB.

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761. 506B Article 506b

     Article 506b NPE securitisations 1. EBA shall monitor the application of Article 269a and shall evaluate the regulatory capital treatment of NPE securitisations having regard to the state of the market for NPEs in general and the state of NPE securitisation market in particular, and submit a report on its findings to the Commission by 10 October 2022. 2. By 10 April 2023, the Commission shall, on the basis of the report referred to in paragraph 1 of this Article, submit a report to the European Parliament and to the Council on the application of Article 269a. The Commission’s report shall, where appropriate, be accompanied by a legislative proposal.

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762. 506C Article 506c

     Article 506c Credit risk — interaction between Common Equity Tier 1 capital reductions and credit risk parameters By 31 December 2026, EBA shall report to the Commission on the consistency between the current measurement of credit risk and the individual credit risk parameters and on the treatment of any adjustments for the purpose of the computation of the IRB shortfall or IRB excess as referred to in Article 159, and on its consistency with the determination of the exposure value in accordance with Article 166 and with the estimation of LGD. That report shall consider the maximum possible economic loss arising from a default event along with its achieved coverage in terms of Common Equity Tier 1 capital reductions, taking into account any accounting-based Common Equity Tier 1 capital reductions, including from expected credit losses or fair value adjustments, and any discounts on received exposures, and their implications for regulatory deductions.

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763. 506D Article 506d

     Article 506d Prudential treatment of securitisation 1. By 31 December 2026, EBA, in close collaboration with ESMA, shall report to the Commission on the prudential treatment of securitisation transactions, differentiating between different types of securitisations, including synthetic securitisations, between originators and investors, and between STS and non-STS transactions. 2. In particular, EBA shall monitor the use of the transitional arrangement referred to in Article 465(13) and assess the extent to which the application of the output floor to securitisation exposures would affect the capital reduction obtained by originator institutions in transactions for which a significant risk transfer has been recognised, would excessively reduce the risk sensitivity and would affect the economic viability of new securitisation transactions. In such cases of a reduction of risk sensitivities, EBA may consider proposing a downward recalibration of the non-neutrality factors for transactions for which a significant risk transfer has been recognised. EBA shall also assess the appropriateness of the non-neutrality factors under both the SEC-SA and the SEC-IRBA, taking into account the historic credit performance of securitisation transactions in the Union and the reduced model and agency risks of the securitisation framework. 3. On the basis of the report referred to in paragraph 1 and taking into account related internationally agreed standards developed by the BCBS the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.

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764. 506E Article 506e

     Article 506e Recognition of capped or floored unfunded credit protection 1. By 10 July 2026, EBA shall submit a report to the Commission on the following: (a) the conditions that guarantees featuring caps or floors determined at the level of a portfolio of exposures (‘portfolio guarantees’) need to meet to qualify as a securitisation; (b) the regulatory treatment applicable under Part Three, Title II, Chapter 4, to portfolio guarantees where those do not qualify as a securitisation; (c) the application of the requirements set out in Part Three, Title II, Chapter 5, of this Regulation and in Chapter 2 of Regulation (EU) 2017/2402 for portfolio guarantees where those guarantees qualify as a securitisation; (d) the application of Article 234 for single guarantees that lead to tranching. 2. In the report referred to in paragraph 1, EBA shall assess in particular the following: (a) in relation to paragraph 1, point (a), the conditions under which portfolio guarantees give rise to a tranched transfer of risk; (b) in relation to paragraph 1, point (b): (i) the relevant eligibility criteria of portfolio guarantees under Part Three, Title II, Chapter 4; (ii) the application of the requirements set out in Part Three, Title II, Chapter 4; (c) in relation to paragraph 1, point (d), the application of the requirements set out in Chapter 2 of Regulation (EU) 2017/2402 and in Part Three, Title II, Chapter 5, of this Regulation. On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.

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765. 506F Article 506f

     Article 506f Prudential treatment of securities financing transactions By 10 July 2026, EBA shall report to the Commission on the impact of the new framework for securities financing transactions in terms of own funds requirements attributed to the corresponding securities financing transactions which are by nature very short-term activities, with a particular focus on its possible impact on sovereign debt markets in terms of market making capacity and cost. EBA shall assess whether a recalibration of the associated risk weights in the standardised approach is appropriate, given the associated risks with respect to short-term maturities, specifically for residual maturities below one year. On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.

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766. 507 Article 507

     Article 507 Large exposures 1. EBA shall monitor the use of exemptions set out in point (b) of Article 390(6), points (f) to (m) of Article 400(1), point (a) and points (c) to (g), (i), (j) and (k) of Article 400(2) and by 28 June 2021 submit a report to the Commission assessing the quantitative impact that the removal of those exemptions or the setting of a limit on their use would have. That report shall assess, in particular, for each exemption provided for in those Articles: (a) the number of large exposures exempted in each Member State; (b) the number of institutions that make use of the exemption in each Member State; (c) the aggregate amount of exposures exempted in each Member State. 2. By 31 December 2023, the Commission shall submit a report to the European Parliament and to the Council on the application of the derogations referred to in Articles 390(4) and 401(2) concerning the methods for the calculation of exposure value of securities financing transactions, and in particular the need to take account of amendments in international standards determining the methods for such calculation.

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767. 508 Article 508

     Article 508 Level of application 1. By 31 December 2014, the Commission shall review, and report on, the application of Part One, Title II, and Article 113(6) and (7) and shall submit that report to the European Parliament and the Council, together with a legislative proposal, if appropriate. 2. By 31 December 2015, the Commission shall report on whether and how the liquidity coverage requirement laid down in Part Six should apply to investment firms and shall, after consulting EBA, submit that report to the European Parliament and to the Council, together with a legislative proposal, if appropriate. 3. By 31 December 2015, the Commission shall, after consulting EBA and ESMA and in the light of discussions with the competent authorities, report to the European Parliament and to the Council on an appropriate regime for the prudential supervision of investment firms and of firms referred to in points (2)(b) and (c) of Article 4(1). Where appropriate the report shall be followed by a legislative proposal.

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768. 509 Article 509

     Article 509 Liquidity requirements 1. EBA shall monitor and evaluate the reports made in accordance with Article 415(1), across currencies and across different business models. EBA shall, after consulting the ESRB, non-financial end-users, the banking industry, competent authorities and the ESCB central banks, annually and for the first time by 31 December 2013 report to the Commission on whether a specification of the general liquidity coverage requirement in Part Six based on the items to be reported in accordance with Part Six, Title II and Annex III, considered either individually or cumulatively, is likely to have a material detrimental impact on the business and risk profile of institutions established in the Union or on the stability and orderly functioning of financial markets or on the economy and the stability of the supply of bank lending, with a particular focus on lending to SMEs and on trade financing, including lending under official export credit insurance schemes. The report referred to in the first subparagraph shall take due account of markets and international regulatory developments as well as of the interactions of the liquidity coverage requirement with other prudential requirements under this Regulation such as the risk-based capital ratios as set out in Article 92 and the leverage ratio. The European Parliament and the Council shall be given the opportunity to state their views on the report referred to in the first subparagraph. 2. EBA shall, in the report referred to in paragraph 1, assess the following, in particular: (a) the provision of mechanisms restricting the value of liquidity inflows, in particular with a view to determining an appropriate inflow cap and the conditions for its application, taking into account different business models including pass through financing, factoring, leasing, covered bonds, mortgages, issuance of covered bonds, and the extent to which that cap should be amended or removed to cater for the specificities of specialised financing; (b) the calibration of inflows and outflows referred to in Part Six, Title II, in particular under Article 422(7) and Article 425(2); (c) the provision of mechanisms restricting the coverage of liquidity requirements by certain categories of liquid assets, in particular assessing the appropriate minimum percentage for liquid assets referred to in points (a), (b) and (c) of Article 416(1) to the total of liquid assets, testing a threshold of 60 % and taking into account international regulatory developments. Assets owed and due or callable within 30 calendar days should not count towards the limit unless the assets have been obtained against collateral that also qualifies under points (a), (b) and (c) of Article 416(1); (d) the provision of specific lower outflow and/or higher inflow rates for intragroup flows, specifying under which conditions such specific in- or outflow rates would be justified from a prudential point of view and setting out the high level outline of a methodology using objective criteria and parameters in order to determine specific levels of inflows and outflows between the institution and the counterparty when they are not established in the same Member State; (e) the calibration of the draw-down rates applicable to the undrawn committed credit and liquidity facilities that fall under Article 424(3) and (5). In particular, EBA shall test a draw-down rate of 100 %; (f) the definition of retail deposit in point (2) of Article 411, in particular the appropriateness of introducing a threshold on deposits of natural persons; (g) the need to introduce a new retail deposit category with a lower outflow in the light of the specific characteristics of such deposits that could justify a lower outflow rate and taking into account international developments; (h) derogations from requirements on the composition of the liquid assets institutions will be required to hold, where in a given currency the institutions' collective justified needs for liquid assets are exceeding the availability of those liquid assets and conditions to which such derogations should be subject; (i) the definition of Shari'ah-compliant financial products as an alternative to assets that would qualify as liquid assets for the purposes of Article 416, for the use of Shari'ah-compliant banks; (j) the definition of circumstances of stress, including principles for the use of the stock of liquid assets and the necessary supervisory reactions under which institutions would be able to use their liquid assets to meet liquidity outflows and how to address non-compliance; (k) the definition of an established operational relationship for non-financial customer as referred to in Article 422(3)(c); (l) the calibration of the outflow rate applicable to correspondent banking and prime brokerage services as referred to in the first subparagraph of Article 422(4); (m) mechanisms for the grandfathering of government guaranteed bonds issued to credit institutions as part of government support measures with Union State aid approval, such as bonds issued by the National Asset Management Agency (NAMA) in Ireland and by the Spanish Asset Management Company in Spain, designed to remove problem assets from the balance sheets of credit institutions, as assets of extremely high liquidity and credit quality until at least December 2023. 3. EBA shall, after consulting ESMA and the ECB, by 31 December 2013, report to the Commission on appropriate uniform definitions of high and of extremely high liquidity and credit quality of transferable assets for the purposes of Article 416 and appropriate haircuts for assets that would qualify as liquid assets for the purposes of Article 416, with the exception of assets referred to in points (a), (b) and (c) of Article 416(1). The European Parliament and the Council shall be given the opportunity to state their views on that report. The report referred to in the first subparagraph shall also consider: (a) other categories of assets, in particular residential mortgage-backed securities of high liquidity and credit quality; (b) other categories of central bank eligible securities or loans, such as local government bonds and commercial paper; and (c) other non-central bank eligible but tradable assets, such as equities listed on a recognised exchange, gold, major index linked equity instruments, guaranteed bonds, covered bonds, corporate bonds and funds based on those assets. 4. The report referred to in paragraph 3 shall consider whether, and if so to what extent, standby credit facilities referred to in point (e) of Article 416(1) should be included as liquid assets in light of international development and taking into account European specificities, including the way monetary policy is performed in the Union. EBA shall in particular test the adequacy of the following criteria and the appropriate levels for such definitions: (a) minimum trade volume of the assets; (b) minimum outstanding volume of the assets; (c) transparent pricing and post-trade information; (d) credit quality steps referred to in Part Three, Title II, Chapter 2; (e) proven record of price stability; (f) average volume traded and average trade size; (g) maximum bid/ask spread; (h) remaining time to maturity; (i) minimum turnover ratio. 5. By 31 January 2014, EBA shall also report on the following: (a) uniform definitions of high and extremely high liquidity and credit quality; (b) the possible unintended consequences of the definition of liquid assets on the conduct of monetary policy operation and the extent to which: (i) a list of liquid assets that is disconnected from the list of central bank eligible assets may incentivise institutions to submit eligible assets which are not included in the definition of liquid assets in refinancing operations; (ii) regulation of liquidity may disincentivise institutions from lending or borrowing on the unsecured money market and whether this may lead to question the targeting of EONIA in monetary policy implementation; (iii) the introduction of the liquidity coverage requirement may make it more difficult for central banks to ensure price stability by using the existing monetary policy framework and instruments; (c) the operational requirements for the holdings of liquid assets, as referred in points (b) to (f) of Article 417, in line with international regulatory developments.

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769. 510 Article 510

     Article 510 Net Stable Funding Requirements 1. By 31 December 2015, EBA shall report to the Commission, on the basis of the items to be reported in accordance with Part Six, Title III, on whether and how it would be appropriate to ensure that institutions use stable sources of funding, including an assessment of the impact on the business and risk profile of institutions established in the Union or on financial markets or the economy and bank lending, with a particular focus on lending to SMEs and on trade financing, including lending under official export credit insurance schemes and pass through financing models, including match funded mortgage lending. In particular EBA shall analyse the impact of stable sources of funding on the refinancing structures of different banking models in the Union. 2. By 31 December 2015, EBA shall also report to the Commission, on the basis of the items to be reported in accordance with Part Six, Title III and, in accordance with the uniform reporting formats referred to in point (a) of Article 415(3) and after consulting the ESRB, on methodologies for determining the amount of stable funding available to and required by institutions and on appropriate uniform definitions for calculating such a net stable funding requirement, examining in particular the following: (a) the categories and weightings applied to sources of stable funding in Article 427(1); (b) the categories and weightings applied to determine the requirement for stable funding in Article 428(1); (c) methodologies shall provide incentives and disincentives as appropriate to encourage a more stable longer term funding of assets, business activities, investment and funding of institutions; (d) the need to develop different methodologies for different types of institutions. 3. By 31 December 2016, the Commission shall, if appropriate, taking into account the reports referred to in paragraphs 1 and 2, and taking full account of the diversity of the banking sector in the Union, submit a legislative proposal to the European Parliament and the Council on how to ensure that institutions use stable sources of funding. 4. EBA shall monitor the amount of required stable funding covering the funding risk linked to the derivative contracts listed in Annex II and credit derivatives over the one-year horizon of the net stable funding ratio, in particular the future funding risk for those derivative contracts set out in Articles 428s(2) and 428at(2), and report to the Commission on the opportunity to adopt a higher required stable funding factor or a more risk-sensitive measure by 28 June 2024. That report shall at least assess: (a) the opportunity to distinguish between margined and unmargined derivative contracts; (b) the opportunity to remove, increase or replace the requirement set out in Articles 428s(2) and 428at(2); (c) the opportunity to change more broadly the treatment of derivative contracts in the calculation of the net stable funding ratio, as set out in Article 428d, Articles 428k(4) and 428s(2), points (a) and (b) of Article 428ag, Articles 428ah(2), 428al(4) and 428at(2), points (a) and (b) of Article 428ay and Article 428az(2), to better capture the funding risk linked to those contracts over the one-year horizon of the net stable funding ratio; (d) the impact of the proposed changes on the amount of stable funding required for institutions' derivative contracts. 5. If international standards affect the treatment of derivative contracts listed in Annex II and credit derivatives for the calculation of the net stable funding ratio, the Commission shall, if appropriate and taking into account the report referred to in paragraph 4, those changes of international standards and the diversity of the banking sector in the Union, submit a legislative proposal to the European Parliament and to the Council on how to amend the provisions regarding the treatment of derivative contracts listed in Annex II and credit derivatives for the calculation of the net stable funding ratio as set out in Title IV of Part Six to take better account of the funding risk linked to those transactions. 6. EBA shall monitor the amount of stable funding required to cover the funding risk linked to securities financing transactions, including to the assets received or given in those transactions, and to unsecured transactions with financial customers, where such transactions have a residual maturity of less than six months. EBA shall report to the Commission by 31 January 2029, and every five years thereafter, on the appropriateness of that stable funding requirement. Taking into account international developments and the regulatory treatment of similar transactions in other jurisdictions, those reports shall assess at a minimum: (a) the opportunity to apply higher or lower stable funding factors to securities financing transactions with financial customers and to unsecured transactions with a residual maturity of less than six months with financial customers to take better account of their funding risk over the one-year horizon of the net stable funding ratio and of the possible contagion effects between financial customers; (b) the opportunity to apply the treatment set out in point (g) of Article 428r(1) to securities financing transactions collateralised by other types of assets; (c) the opportunity to apply stable funding factors to off-balance-sheet items used in securities financing transactions as an alternative to the treatment set out in Article 428p(5); (d) the adequacy of the asymmetric treatment between liabilities with a residual maturity of less than six months provided by financial customers that are subject to a 0 % available stable funding factor in accordance with Article 428k(3), point (c), and assets resulting from transactions with a residual maturity of less than six months with financial customers that are subject to a 0 %, 5 % or 10 % required stable funding factor in accordance with Article 428r(1), point (g), Article 428s(1), point (b), and Article 428v, point (a); (e) the impact of the introduction of higher or lower required stable funding factors for securities financing transactions, in particular with a residual maturity of less than six months, with financial customers, on: (i) the price structure of those transactions; and (ii) the market liquidity of assets received as collateral in those transactions, in particular of sovereign and corporate bonds; (f) the impact of the proposed changes on the amount of stable funding required for those institutions' transactions, in particular for securities financing transactions with a residual maturity of less than six months with financial customers where sovereign bonds are received as collateral in those transactions. 7. By 28 June 2024, the Commission shall, where appropriate and taking into account the report referred to in paragraph 6, any international standards and the diversity of the banking sector in the Union, submit a legislative proposal to the European Parliament and to the Council on how to amend the provisions regarding the treatment of securities financing transactions, including of the assets received or given in those transactions, and the treatment of unsecured transactions with a residual maturity of less than six months with financial customers for the calculation of the net stable funding ratio as set out in Title IV of Part Six where it considers it appropriate regarding the impact of the existing treatment on institutions' net stable funding ratio and to take better account of the funding risk linked to those transactions. 8. By 28 June 2025, the required stable funding factors applied to the transactions referred to in point (g) of Article 428r(1), point (b) of Article 428s(1) and in point (a) of Article 428v, shall be raised from 0 % to 10 %, from 5 % to 15 % and from 10 % to 15 % respectively, unless otherwise specified in a legislative act adopted on the basis of a proposal by the Commission, in accordance with paragraph 7 of this Article. 9. EBA shall monitor the amount of stable funding required to cover the funding risk linked to institutions' holdings of securities to hedge derivative contracts. EBA shall report on the appropriateness of the treatment by 28 June 2023. That report shall at least assess: (a) the possible impact of the treatment on investors' ability to gain exposure to assets and the impact of the treatment on credit supply in the capital markets union; (b) the opportunity to apply adjusted stable funding requirements to securities that are held to hedge derivatives which are funded by initial margin, either wholly or in part; (c) the opportunity to apply adjusted stable funding requirements to securities that are held to hedge derivatives which are not funded by initial margin. 10. By 28 June 2023 or a year after an agreement on international standards that is developed by the BCBS, whichever is the earliest, the Commission shall, where appropriate and taking into account the report referred to in paragraph 9, any international standards developed by the BCBS, the diversity of the banking sector in the Union and the aims of the capital markets union, submit a legislative proposal to the European Parliament and to the Council on how to amend the provisions regarding the treatment of institutions' holdings of securities to hedge derivative contracts for the calculation of the net stable funding ratio as set out in Title IV of Part Six where it considers it appropriate regarding the impact of the existing treatment on institutions' net stable funding ratio and to take better account of the funding risk linked to those transactions. 11. EBA shall assess whether it would be justified to reduce the required stable funding factor for assets used for providing clearing and settlement services of precious metals such as gold, silver, platinum and palladium or assets used for providing financing transactions of precious metals such as gold, silver, platinum and palladium of a term of 180 days or less. EBA shall submit its report to the Commission by 28 June 2021.

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770. 511 Article 511

     Article 511 Leverage 1. The Commission shall by 31 December 2020 submit a report to the European Parliament and to the Council on whether: (a) it is appropriate to introduce a leverage ratio surcharge for O-SIIs; and (b) the definition and calculation of the total exposure measure referred to in Article 429(4), including the treatment of central bank reserves, is appropriate. 2. For the purposes of the report referred to in paragraph 1, the Commission shall take into account international developments and internationally agreed standards. Where appropriate, that report shall be accompanied by a legislative proposal.

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771. 512 Article 512

     Article 512 Exposures to transferred credit risk By 31 December 2014, the Commission shall report to the European Parliament and the Council on the application and effectiveness of the provisions of Part Five in the light of international market developments.

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772. 513 Article 513

     Article 513 Macroprudential rules 1. By 30 June 2022, and every five years thereafter, the Commission shall, after consulting the ESRB and EBA, review whether the macroprudential rules contained in this Regulation and in Directive 2013/36/EU are sufficient to mitigate systemic risks in sectors, regions and Member States including assessing: (a) whether the current macroprudential tools in this Regulation and in Directive 2013/36/EU are effective, efficient and transparent; (b) whether the coverage and the possible degrees of overlap between different macroprudential tools for targeting similar risks in this Regulation and in Directive 2013/36/EU are adequate and, if appropriate, propose new macroprudential rules; (c) how internationally agreed standards for systemic institutions interact with the provisions in this Regulation and in Directive 2013/36/EU and, if appropriate, propose new rules taking into account those internationally agreed standards; (d) whether other types of instruments, such as borrower-based instruments, should be added to the macroprudential tools provided for in this Regulation and in Directive 2013/36/EU to complement capital-based instruments and to allow for the harmonised use of the instruments in the internal market; taking into account whether harmonised definitions of those instruments and the reporting of respective data at Union level are a prerequisite for the introduction of such instruments; (e) whether the leverage ratio buffer requirement as referred to in Article 92(1a) should be extended to systemically important institutions other than G-SIIs, whether its calibration should be different from the calibration for G-SIIs, and whether its calibration should depend on the level of systemic importance of the institution; (f) whether the current voluntary reciprocity of macroprudnetial measures should be turned into mandatory reciprocity and whether the current ESRB framework for voluntary reciprocity is an appropriate basis for that; (g) how relevant Union and national macroprudential authorities can be mandated with tools to address new emerging systemic risks arising from credit institutions exposures to the non-banking sector, in particular from derivatives and securities financing transactions markets, the asset management sector and the insurance sector. 2. By 31 December 2022, and every five years thereafter, the Commission shall, on the basis of the consultation with the ESRB and EBA, report to the European Parliament and to the Council on the assessment referred to in paragraph 1 and, where appropriate, submit a legislative proposal to the European Parliament and to the Council.

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773. 514 Article 514

     Article 514 Method for the calculation of the exposure value of derivative transactions 1. EBA shall, by 28 June 2023, report to the Commission on the impact and the relative calibration of the approaches set out in Sections 3, 4 and 5 of Chapter 6 of Title II of Part Three to calculate the exposure values of derivative transactions. 2. On the basis of the EBA report referred to in paragraph 1 and taking due account of the implementation in third countries of the internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council to amend the approaches set out in Part Three, Title II, Chapter 6, Sections 3, 4 and 5.

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