Commission Delegated Regulation (EU) 2021/598 of 14 December 2020 supplementing Regulation (EU) No 575/2013
as it stood on 2020-12-14, permalink: /eu-eurlex/32021r0598/2020-12-14
Article 1
Where the purpose of a specialised lending exposure is to finance the development or acquisition of large, complex and expensive installations, including in particular power plants, chemical processing plants, mines, transportation infrastructure, environment, and telecommunications infrastructure, and the income to be generated by the assets is the money generated by the contracts for the output of the installation obtained from one or several parties which are not under management control of the sponsor(‘project finance exposures’), institutions shall apply the assessment criteria set out in Annex I to this class of exposures when assigning risk weights in accordance with the second subparagraph of Article 153(5) of Regulation (EU) No 575/2013.
Where the purpose of a specialised lending exposure is to finance the development or acquisition of real estate, including in particular office buildings to let, retail space, multifamily residential buildings, industrial or warehouse space, hotels and land, and the income to be generated by the real estate is lease or rental payments or the proceeds from the sale of such real estate obtained from one or several third parties (‘real estate exposures’), institutions shall apply the assessment criteria set out in Annex II to this class of exposures when assigning risk weights in accordance with the second subparagraph of Article 153(5) of Regulation (EU) No 575/2013.
Where the purpose of a specialised lending exposure is to finance the acquisition of physical assets, including in particular ships, aircraft, satellites, railcars, and fleets, and the income to be generated by those assets is lease or rental payments obtained from one or several third parties (‘object financing exposures’), institutions shall apply the assessment criteria set out in Annex III to this class of exposures when assigning risk weights in accordance with the second subparagraph of Article 153(5) of Regulation (EU) No 575/2013.
Where the purpose of a specialised lending exposure is to finance reserves, inventories or receivables of exchange-traded commodities, including in particular crude oil, metals, or crops, and the income to be generated by those reserves, inventories or receivables is to be the proceeds from the sale of the commodity (‘commodities financing exposures’), institutions shall apply the assessment criteria set out in Annex IV to this class of exposures when assigning risk weights in accordance with the second subparagraph of Article 153(5) of Regulation (EU) No 575/2013.
Article 2
Institutions shall, on the basis of an overall assessment, attribute a category to each factor set out in the annex which is applicable to the class of specialised lending exposures in accordance with Article 1. For each specialised lending exposure, the institution shall carry out this attribution taking into consideration the categories attributed to each applicable sub-factor in accordance with Articles 3 and 4, as well as the relative importance of each sub-factor for the type of specialised lending exposures as defined in point (2) of Article 142(1) of Regulation (EU) No 575/2013.
The institution shall assign a weight in percentage that is not lower than 5 % and not higher than 60 % to each factor having regard to its relative importance for the type of specialised lending exposures.
The institution shall determine the weighted average of the categories, which have been attributed to the factors in accordance with paragraph 1, applying the weights assigned in accordance with paragraph 2. Where the weighted average is a decimal number, institutions shall round that number to the nearest cardinal number.
The institution shall assign the specialised lending exposure to the category set out in Table 1 of Article 153(5) of Regulation (EU) No 575/2013 for which the number corresponds to the weighted average calculated in accordance with paragraph 3.
Article 3
Where a sub-factor of a given factor listed in Annex I, II, III or IV is not further specified in sub-factor components, the institution shall attribute a category to the sub-factor on the basis of the assessment criteria set out for that sub-factor.
Where a sub-factor of a given factor listed in Annex I, II, III or IV is further specified in sub-factor components, the institution shall:
| (a) | attribute a category to each sub-factor component on the basis of the assessment criteria set out for that sub-factor component; |
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| (b) | attribute a category to the sub-factor on the basis of an overall assessment carried out taking into consideration the categories attributed in accordance with point (a) as well as the relative importance of each sub-factor component for the type of specialised lending exposure. |
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Where the institution takes into account additional relevant information (an ‘additional risk driver’) in accordance with Article 171(2) of Regulation (EU) No 575/2013 for a type of specialised lending exposures, it shall consider it jointly with the sub-factor, which most closely corresponds to that additional risk driver.
Where, exceptionally, a sub-factor or sub-factor component is not relevant for all specialised lending exposures belonging to a certain type of specialised lending exposures, the institution may decide not to apply that sub-factor or sub-factor component for any of the specialised lending exposures belonging to that type.
Article 4
Where a sub-factor or a sub-factor component has identical assessment criteria in two or more categories (‘overlapping criteria’), and the specialised lending exposure conforms to those overlapping criteria, institutions shall attribute a category to the sub-factor or sub-factor component as follows:
| (a) | where overlapping criteria occur in two categories, institutions shall attribute the higher of the two categories; |
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| (b) | where overlapping criteria occur in three categories, institutions shall attribute the category between the lowest and the highest of the three categories. |
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Article 5
By way of derogation from Articles 1 to 4, where the obligor is in default in the meaning of Article 178 of Regulation (EU) No 575/2013, the institution shall assign a risk weight of category 5 as set out in Table 1 of Article 153(5) of that Regulation to the specialised lending exposure.
Article 6
- Institutions shall document the following information for each type of specialised lending exposures for which they assign risk weights in accordance with this Regulation:
| (a) | the assignment of weights to each factor in accordance with Article 2(2) and the justification for that assignment; |
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| (b) | a description of additional risk drivers and a justification for taking them into account in accordance with Article 3(3), where applicable; |
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| (c) | the justification for deciding not to apply a certain sub-factor or sub-factor component in accordance with Article 3(4), where applicable. |
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- Institutions shall document the following information for each specialised lending exposure for which they assign risk weights in accordance with this Regulation:
| (a) | the class of the specialised lending exposure as set out in Article 1; |
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| (b) | the category of Table 1 of the first subparagraph of Article 153(5) of Regulation (EU) No 575/2013 to which the specialised lending exposure has been assigned; |
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| (c) | the remaining maturity as referred to in Table 1 of the first subparagraph of Article 153(5) of Regulation (EU) No 575/2013; |
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| (d) | the assessment of the specialised lending exposure at each step of the process laid down in Articles 2 to 5 that led to the assignment of the risk weight to the exposure. |
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Article 7
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
It shall apply from 14 April 2022.
Provenance and validity dates, identifier, hash
| as of | 2020-12-14 → this version applied |
| valid | 2020-12-14 → open publisher-asserted |
| type | REG_DEL Commission Delegated Regulation (EU) 2021/598 of 14 December 2020 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for assigning risk weights to specialised lending exposures (Text with EEA relevance) |
| language | en |
| published | 2020-12-14 |
| lex_id | eu-eurlex:32021r0598:2020-12-14 |
| record sha256 | 7275ebe794de9da31e3f15e8147ed3b9e802332b2761e102cbb99c2cd0894d46 |
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