Application provision

1.1 This Part applies to:

  1. (a) a firm that is a CRR firm; and
  2. (b) a CRR consolidation entity

1.

01/01/2022

Institutions shall deduct the following from Common Equity Tier 1 items:

  1. (a) losses for the current financial year;
  2. (b) intangible assets;
  3. (c) deferred tax assets that rely on future profitability;
  4. (d) for institutions calculating risk-weighted exposure amounts using the Internal Ratings Based Approach (the IRB Approach), negative amounts resulting from the calculation of expected loss amounts laid down in Articles 158 and 159;
  5. (e) defined benefit pension fund assets on the balance sheet of the institution;
  6. (f) direct, indirect and synthetic holdings by an institution of own Common Equity Tier 1 instruments, including own Common Equity Tier 1 instruments that an institution is under an actual or contingent obligation to purchase by virtue of an existing contractual obligation;
  7. (g) direct, indirect and synthetic holdings of the Common Equity Tier 1 instruments of financial sector entities where those entities have a reciprocal cross holding with the institution that have been designed to inflate artificially the own funds of the institution;
  8. (h) the applicable amount of direct, indirect and synthetic holdings by the institution of Common Equity Tier 1 instruments of financial sector entities where the institution does not have a significant investment in those entities;
  9. (i) the applicable amount of direct, indirect and synthetic holdings by the institution of the Common Equity Tier 1 instruments of financial sector entities where the institution has a significant investment in those entities;
  10. (j) the amount of items required to be deducted from Additional Tier 1 items pursuant to Article 56 that exceeds the Additional Tier 1 items of the institution;
  11. (k) the exposure amount of the following items which qualify for a risk weight of 1,250%, where the institution deducts that exposure amount from the amount of Common Equity Tier 1 items as an alternative to applying a risk weight of 1,250%:
    1. (i) qualifying holdings outside the financial sector;
    2. (ii) securitisation positions, in accordance with point (b) of Article 244(1), point (b) of Article 245(1) and Article 253;
    3. (iii) free deliveries, in accordance with Article 379(3);
    4. (iv) positions in a basket for which an institution cannot determine the risk weight under the IRB Approach, in accordance with Article 153(8);
    5. (v) equity exposures under an internal models approach, in accordance with Article 155(4);
  12. (l) any tax charge relating to Common Equity Tier 1 items foreseeable at the moment of its calculation, except where the institution suitably adjusts the amount of Common Equity Tier 1 items insofar as such tax charges reduce the amount up to which those items may be used to cover risks or losses;
  13. (m) the applicable amount of insufficient coverage for non-performing exposures.

2.

01/01/2022

[Note: Provision left blank]

3.

01/01/2022

[Note: Provision left blank]

4.

01/01/2022

[Note: Provision left blank]

Additional Notes


[Note: This rule corresponds to Article 36 of the CRR as it applied immediately before revocation by the Treasury.]

[Note: Articles 37 to 91 remain in the CRR]