The rule in plain words
Memo item: amounts eligible for the purposes of MREL, but not TLAC cannot be more than zero.
EBA checks it for four rows: (-) own eligible liabilities instruments subordinated to excluded liabilities, (-) of which: unused prior permission amounts (0135), (-) own eligible liabilities instruments not subordinated to excluded liabilities and (-) of which: unused prior permission amounts (0165). That makes four 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.
(-) Own eligible liabilities instruments subordinated to excluded liabilities <= 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 02.00 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
MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (III) (M 02.00.c)
Rows
- 0132(-) Own eligible liabilities instruments subordinated to excluded liabilities
- 0135(-) Of which: unused prior permission amounts
- 0162(-) Own eligible liabilities instruments not subordinated to excluded liabilities
- 0165(-) Of which: unused prior permission amounts
Column
- 0030Memo item: Amounts eligible for the purposes of MREL, but not TLAC
A worked example
The first of its checks, with simple numbers.
(-) own eligible liabilities instruments subordinated to excluded liabilities can then be at most 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_02.00.c,r0132,c0030,} <= 0The next three:
{M_02.00.c,r0165,c0030,} <= 0{M_02.00.c,r0135,c0030,} <= 0{M_02.00.c,r0162,c0030,} <= 0Other rules on M 02.00.c
- Eligible liabilities not subordinated to excluded liabilities must equal the sum of its three parts (v22342_m)Warning
- Eligible liabilities subordinated to excluded liabilities must equal the sum of its five parts (v22341_m)Warning
- Eligible liabilities items before adjustments must equal the sum of its two parts (v10850_h)Warning
- Memo item: amounts eligible for the purposes of MREL, but not TLAC cannot be negative (v10838_s)Warning
- Own funds must equal the sum of its three parts (v903590_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.