The rule in plain words
Instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art cannot be less than instruments subject to set-off or netting arrangements.
EBA checks it for two columns: adjustments to AT1 and adjustments to T2. That makes two checks. A failure names the one that failed.
The headline gives only the kind of check and the template, because the rule is too long to say in a headline. The plain words above say all of it.
How the Line4 Check report words itShowHide
The first of its checks, word for word as the report shows it when it fails. The others read the same, with their own column, row or sheet.
Adjustments to AT1: Instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art >= of which: Instruments subject to set-off or netting arrangements
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Compare the values in your file. If the first is smaller than it may be, one of them is wrong: check both before you change either.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark C 05.01 as reported.
- 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.
The cells it reads
Capital adequacy - transitional provisions: Summary (C 05.01)
Rows
- 0062Instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art
- 0065of which: Instruments subject to set-off or netting arrangements
Columns
- 0020Adjustments to AT1
- 0030Adjustments to T2
A worked example
The first of its checks, with simple numbers.
Instruments subject to set-off or netting arrangements can then be at most 1,200.
A file that reports 1,200 passes. One that reports 1,300 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
Show the rule as writtenShowHide
EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.
{C_05.01,r0062,c0020,} >= {C_05.01,r0065,c0020,}The next one:
{C_05.01,r0062,c0030,} >= {C_05.01,r0065,c0030,}Other rules on C 05.01
- A lower-limit check on capital adequacy: transitional provisions: Summary (row 0062, v10640_m)Warning
- A lower-limit check on capital adequacy: transitional provisions: Summary (row 0062, v10639_m)Warning
- Instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art cannot be more than the sum of three rows (v09739_m)Warning
- Minority interests and equivalents must equal transitional recognition in consolidated own funds of qualifying Tier 2 capital (v8652_m)Warning
- Minority interests and equivalents must equal transitional recognition in consolidated own funds of qualifying additional Tier 1 capital (v8651_m)Warning
- Applicable percentage cannot be more than 1 (v6302_m)Warning
- Total adjustments must equal other transitional adjustments (v6022_m)Warning
- Eligible amount without transitional provisions cannot be more than zero (v5016_s)Warning
Every COREP own funds rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.