The rule in plain words

Investments in subordinated eligible liabilities of other institutions (under memorandum items) must equal these three added up:

Investments in subordinated eligible liabilities of G-SIIs
Investments in subordinated eligible liabilities of O-SIIs
Investments in subordinated eligible liabilities of other institutions (under investments in subordinated eligible liabilities of other institutions)

EBA checks it for two columns: minimum requirement for own funds and eligible liabilities (MREL), and requirement for own funds and eligible liabilities for G-SIIs (TLAC). That makes two checks. A failure names the one that failed.

How the Line4 Check report words itShow

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.

Requirement for own funds and eligible liabilities for G-SIIs (TLAC): Memorandum items, investments in subordinated eligible liabilities of other institutions = Investments in subordinated eligible liabilities of G-SIIs + Investments in subordinated eligible liabilities of O-SIIs + Investments in subordinated eligible liabilities of other institutions, investments in subordinated eligible liabilities of other institutions

What to do if your filing fails it

01Open the template below and find the cells the rule reads.
02Add up the parts in your file and compare the result with the total.
03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
04EBA allows a small rounding difference, worked out from the decimals each value is reported with.
05It runs only when your filing indicators mark M 02.00 as reported.
06This 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

MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (I) (M 02.00.a)

Rows

0460Investments in subordinated eligible liabilities of other institutions
0470Investments in subordinated eligible liabilities of G-SIIs
0480Investments in subordinated eligible liabilities of O-SIIs
0490Investments in subordinated eligible liabilities of other institutions

Columns

0010Minimum requirement for own funds and eligible liabilities (MREL)
0020Requirement for own funds and eligible liabilities for G-SIIs (TLAC)

A worked example

The first of its checks, with simple numbers.

Illustrative values

Investments in subordinated eligible liabilities of G-SIIs1,200

Investments in subordinated eligible liabilities of O-SIIs800

Investments in subordinated eligible liabilities of other institutions (under investments in subordinated eligible liabilities of other institutions)450

Together2,450

What the rule then expects

Investments in subordinated eligible liabilities of other institutions (under memorandum items) must then be 2,450.

2,450Passes

2,550Fails

A file that reports 2,450 passes. One that reports 2,550 fails, by 100.

The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.

Show the rule as writtenShow

EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.

{M_02.00.a,r0460,c0020,} = {M_02.00.a,r0470,c0020,} + {M_02.00.a,r0480,c0020,} + {M_02.00.a,r0490,c0020,}

The next one:

{M_02.00.a,r0460,c0010,} = {M_02.00.a,r0470,c0010,} + {M_02.00.a,r0480,c0010,} + {M_02.00.a,r0490,c0010,}

Every MREL and TLAC rule, by template

Checks like this one, run at the point of submission, are the first step to real-time supervision.

Investments in subordinated eligible liabilities of other institutions (under memorandum items) must equal the sum of its three parts (EBA rule v10766_m)

The rule in plain words

What to do if your filing fails it

The cells it reads

A worked example

Other rules on M 02.00.a