The rule in plain words
None of the values it checks in capital adequacy: transitional provisions: Summary can be negative.
EBA checks it for two columns: adjustments to AT1 and adjustments to T2. And for seven rows: grandfathered instruments, instruments not constituting state aid, instruments issued through special purpose vehicles, instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art, instruments without legally or contractually mandatory write-down or conversion upon exercise of powers in accordance with Article, instruments governed by third-country law without effective and enforceable exercise of powers in accordance with Article 59 of Di, and instruments subject to set-off or netting arrangements. That makes 14 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.
Adjustments to AT1: GRANDFATHERED INSTRUMENTS >= 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 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
- 0020GRANDFATHERED INSTRUMENTS
- 0060Instruments not constituting state aid
- 0061Instruments issued through special purpose vehicles
- 0062Instruments issued before 27 June 2019 that do not meet the eligibility criteria related to write-down and conversion powers pursuant to Art
- 0063of which: Instruments without legally or contractually mandatory write-down or conversion upon exercise of powers in accordance with Article
- 0064of which: Instruments governed by third-country law without effective and enforceable exercise of powers in accordance with Article 59 of Di
- 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.
Grandfathered instruments, adjustments to AT1 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}.
{C_05.01,r0020,c0020,} >= 0The next five:
{C_05.01,r0061,c0030,} >= 0{C_05.01,r0065,c0030,} >= 0{C_05.01,r0062,c0020,} >= 0{C_05.01,r0020,c0030,} >= 0{C_05.01,r0060,c0020,} >= 0And 8 more, the same formula for the other cells it covers.
Other rules on C 05.01
- A lower-limit check on capital adequacy: transitional provisions: Summary (row 0062, v10641_m)Warning
- 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
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.