The rule in plain words
None of the values it checks in capital adequacy can be negative.
EBA checks it for four columns: base for calculating the limit, applicable percentage, limit and total grandfathered amount. And for three rows: instruments that qualified for Article 57, point (a) of Directive 2006/48/EC, instruments that qualified for Article 57, point (ca) and Article 154(8) and (9) of Directive 2006/48/EC, subject to the limit of Article, and items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulati. That makes twelve 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.
Base for calculating the limit: 3. Items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulati >= 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 05.02 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: grandfathered instruments not constituting State aid (C 05.02)
Rows
- 00101. Instruments that qualified for Article 57, point (a) of Directive 2006/48/EC
- 00202. Instruments that qualified for Article 57, point (ca) and Article 154(8) and (9) of Directive 2006/48/EC, subject to the limit of Article
- 00903. Items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulati
Columns
- 0020Base for calculating the limit
- 0030Applicable percentage
- 0040Limit
- 0060Total grandfathered amount
A worked example
The first of its checks, with simple numbers.
Items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulati, base for calculating the limit 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_05.02,r0090,c0020,} >= 0The next five:
{C_05.02,r0090,c0040,} >= 0{C_05.02,r0090,c0060,} >= 0{C_05.02,r0020,c0020,} >= 0{C_05.02,r0010,c0060,} >= 0{C_05.02,r0090,c0030,} >= 0And 6 more, the same formula for the other cells it covers.
Other rules on C 05.02
- Applicable percentage cannot be more than 0.5 (v4809_m)Warning
- Amount that exceeds the limits for grandfathering cannot be more than zero (v2036_s)Warning
- Items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulati must equal the sum of its three parts (v0278_m)Warning
- Instruments that qualified for Article 57, point (ca) and Article 154(8) and (9) of Directive 2006/48/EC, subject to the limit of Article must equal the sum of its three parts (v0277_m)Warning
- 3. items that qualified for Article 57, points (e), (f), (g) or (h) of Directive 2006/48/EC, subject to the limit of Article 490 of Regulation (EU) No 575/2013: amount of instruments plus related share premium cannot be negative (v23739_m)Warning
- 2. instruments that qualified for Article 57, point (ca) and Article 154(8) and (9) of Directive 2006/48/EC, subject to the limit of Article 489 of Regulation (EU) No 575/2013: amount of instruments plus related share premium cannot be negative (v23970_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.