Commission Implementing Regulation (EU) No 680/2014Dangos y teitl llawn

[F1 [F1 9. LOAN COMMITMENTS, FINANCIAL GUARANTEES AND OTHER COMMITMENTS (9) U.K.

55. Off-balance sheet exposures include the off-balance sheet items listed in Annex I of CRR. Off-balance sheet exposures shall be broken down in loan commitments given, financial guarantees given, and other commitments given. U.K.

56. Information on loan commitments, financial guarantees, and other commitments given and received include both revocable and irrevocable commitments. U.K.

57. ‘ Loan commitments ’ are firm commitments to provide credit under pre-specified terms and conditions, except those that are derivatives because they can be settled net in cash or by delivering or issuing another financial instrument. The following items of Annex I of CRR shall be classified as ‘ Loan commitments ’ : U.K.

(a)

‘ Forward deposits ’ .

(b)

‘ Undrawn credit facilities ’ which comprise agreements to ‘ lend ’ or provide ‘ acceptance facilities ’ under pre-specified terms and conditions.

58. ‘ Financial guarantees ’ are contracts that require the issuer to make specified payments to reimburse the holder of a loss it incurs, because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Under IFRS or compatible National GAAP, these contracts meet the IAS 39.9 and IFRS 4.A definition of financial guarantee contracts. The following items of Annex I of CRR shall be classified as ‘ financial guarantees ’ : U.K.

(a)

‘ Guarantees having the character of credit substitute ’ ;

(b)

‘ Credit derivatives ’ that meet the definition of financial guarantee;

(c)

‘ Irrevocable standby letters of credit having the character of credit substitutes ’ ;

59. ‘ Other commitments ’ includes the following items of Annex I of CRR: U.K.

(a)

‘ Unpaid portion of partly-paid shares and securities ’ ;

(b)

‘ Documentary credits issued or confirmed ’ ;

(c)

Trade finance Off-balance sheet items;

(d)

‘ Documentary credits in which underlying shipment acts as collateral and other self-liquidating transactions ’ ;

(e)

‘ Warranties and indemnities ’ (including tender and performance bonds) and ‘ guarantees not having the character of credit substitutes ’ ;

(f)

‘ Shipping guarantees, customs and tax bonds ’ ;

(g)

Note issuance facilities (NIFs) and revolving underwritings facilities (RUFs);

(h)

‘ Undrawn credit facilities ’ which comprise agreements to ‘ lend ’ or provide ‘ acceptance facilities ’ when the terms and conditions are not pre-specified;

(i)

‘ Undrawn credit facilities ’ which comprise agreements to ‘ purchase securities ’ or ‘ provide guarantees ’ ;

(j)

‘ Undrawn credit facilities for tender and performance guarantees ’ ;

(k)

‘ Other off-balance sheet items ’ in Annex I of CRR.

60. Under IFRS or compatible National GAAP, the following item are recognised in the balance sheet and, consequently, should not be reported as off-balance sheet exposures: U.K.

(a)

‘ Credit derivatives ’ that do not meet the definition of financial guarantees are ‘ derivatives ’ under IAS 39;

(b)

‘ Acceptances ’ are obligations by an institution to pay on maturity the face value of a bill of exchange, normally covering the sale of goods. Consequently, they are classified as ‘ trade receivables ’ on the balance sheet;

(c)

‘ Endorsements on bills ’ that do not meet the criteria for de-recognition under IAS 39;

(d)

‘ Transactions with recourse ’ that do not meet the criteria for de-recognition under IAS 39;

(e)

‘ Assets purchased under outright forward purchase agreements ’ are ‘ derivatives ’ under IAS 39;

(f)

‘ Asset sale and repurchase agreements as defined in Article 12(3) and (5) of Directive 86/635/EEC ’ . In these contracts, the transferee has the option, but not the obligation, to return the assets at a price agreed in advance on a date specified (or to be specified). Therefore, these contracts meet the definition of derivatives under IAS 39.9.

61. ‘ of which: defaulted ’ shall include the nominal amount of those loan commitments, financial guarantees and other commitments given whose counterparty has incurred in default according to Article 178 of CRR. U.K.

62. For off-balance sheet exposures, the ‘ Nominal amount ’ is the amount that best represents the institution’s maximum exposure to credit risk without taking account of any collateral held or other credit enhancements. In particular, for financial guarantees given, the nominal amount is the maximum amount the entity could have to pay if the guarantee is called on. For loan commitments, the nominal amount is the undrawn amount that the institution has committed to lend. Nominal amounts are exposure values before applying conversion factors and credit risk mitigation techniques. U.K.

63. In template 9.2, for loan commitments received, the nominal amount is the total undrawn amount that the counterparty has committed to lend to the institution. For other commitments received the nominal amount is the total amount committed by the other party in the transaction. For financial guarantees received, the ‘ maximum amount of the guarantee that can be considered ’ is the maximum amount the counterparty could have to pay if the guarantee is called on. When a financial guarantee received has been issued by more than one guarantor, the guaranteed amount shall be reported only once in this template; the guaranteed amount shall be allocated to guarantor that is more relevant for the mitigation of credit risk.] ] U.K.

Textual Amendments

F1 Substituted by Commission Implementing Regulation (EU) 2015/227 of 9 January 2015 amending Implementing Regulation (EU) No 680/2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance).