The rule in plain words
None of the values it checks in creditor ranking (resolution entities) (TLAC3) can be negative.
EBA checks it for nine columns, from liabilities and own funds (0030) to perpetual securities (0110). That makes nine checks. A failure names the one that failed.
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.
≥ 5 years < 10 years: ≥ 5 years < 10 years >= 0
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Look for a value with the wrong sign in these cells, such as an amount entered as a negative number.
- 03EBA compares the values exactly here: there is no rounding tolerance.
- 04It runs only when your filing indicators mark M 06.00 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
Creditor ranking (resolution entities) (TLAC3) (M 06.00)
Columns
- 0030Liabilities and own funds
- 0040Of which: excluded liabilities
- 0050Liabilities and own funds less excluded liabilities
- 0060Of which: own funds and eligible liabilities potentially eligible for meeting MREL
- 0070≥ 1 year < 2 years
- 0080≥ 2 year < 5 years
- 0090≥ 5 years < 10 years
- 0100≥ 10 years
- 0110Of which: perpetual securities
A worked example
The first of its checks, with simple numbers.
≥ 5 years < 10 years must then be at least 0.
A file that reports 0 passes. One that reports -100 fails, by 100.
The numbers are illustrative.
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}.
{M_06.00,,c0090,} >= 0The next five:
{M_06.00,,c0110,} >= 0{M_06.00,,c0100,} >= 0{M_06.00,,c0070,} >= 0{M_06.00,,c0080,} >= 0{M_06.00,,c0030,} >= 0And 3 more, the same formula for the other cells it covers.
Other rules on M 06.00
- Own funds and eligible liabilities potentially eligible for meeting MREL cannot be less than the sum of five columns (v10811_m)Warning
- Liabilities and own funds less excluded liabilities cannot be less than own funds and eligible liabilities potentially eligible for meeting MREL (v10810_m)Warning
- A check on creditor ranking (resolution entities) (TLAC3) (v10809_m)Not run yet
- Liabilities and own funds cannot be less than excluded liabilities (v10808_m)Warning
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.