Commission Delegated Regulation (EU) 2021/539 of 11 February 2021 amending Delegated Regulation (EU) No 1222/2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards for the specification of the methodology for the identification of global systemically important institutions and for the definition of subcategories of global systemically important institutions (Text with EEA relevance)
Commission Delegated Regulation (EU) 2021/539of 11 February 2021amending Delegated Regulation (EU) No 1222/2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards for the specification of the methodology for the identification of global systemically important institutions and for the definition of subcategories of global systemically important institutions(Text with EEA relevance)THE EUROPEAN COMMISSION,Having regard to the Treaty on the Functioning of the European Union,Having regard to Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/ECOJ L 176, 27.6.2013, p. 338., and in particular Article 131(18) thereof,Whereas:(1)In July 2018, the Basel Committee on Banking Supervision (BCBS) published a revised methodology for assessing global systemically important banks. That revised methodology introduced a new indicator to measure systemic importance, relating to the trading volume and which is included in the category that measures the substitutability of services or of the financial infrastructure provided by a banking group. The introduction of that new indicator has, however, no effect on the weight of that category, because the relative weight assigned to the new trading volume indicator is offset by a reduction, from 6,67 % to 3,33 %, in the relative weight of underwritten transactions in the debt and equity markets indicator. The category that measures the substitutability of services or of the financial infrastructure provided by a banking group thus retains its relative weight of 20 % in the overall score for each entity. The revised methodology also included insurance activities in the indicators-based measurement approach used to assess the systemic importance of banking groups. Those changes to the methodology for assessing global systemically important banks should be reflected in Commission Delegated Regulation (EU) No 1222/2014Commission Delegated Regulation (EU) No 1222/2014 of 8 October 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards for the specification of the methodology for the identification of global systemically important institutions and for the definition of subcategories of global systemically important institutions (OJ L 330 15.11.2014, p. 27)..(2)The relevant authorities should calculate the scores of the relevant entities to be included in the sample notified by the EBA not later than 1 September of each year to allow for agreement at Union level.(3)The data collection established in accordance with the revised methodology, which includes the trading volume indicator, will start in the first quarter of 2022. G-SIIs will therefore be identified on the basis of the revised framework for the first time in the last quarter of 2022. In order to align the application of the provisions of the revised methodology with the dates of application of the revised methodology, the provisions of this Regulation that reflect the changes in the revised methodology should apply from 1 December 2021.(4)Article 131 of Directive 2013/36/EU was amended by Directive (EU) 2019/878 of the European Parliament and of the CouncilDirective (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures (OJ L 150, 7.6.2019, p. 253). to introduce into Directive 2013/36/EU an additional overall score for G-SIIs with the cross-border activities’ indicator excluding the cross-border activities across the Member States participating in the Single Resolution Mechanism (SRM). That additional overall score was introduced to reflect the ability to resolve cross-border groups within the European banking union in an orderly manner. It is therefore appropriate to amend the scope of the cross-border activity indicator to reflect that change.(5)Directive (EU) 2019/878 further enabled competent and designated authorities to use sound supervisory judgement to reallocate a global systemically important institution (G-SII) from a higher subcategory to a lower subcategory on the basis of the additional overall score that accounts for the specificities of the European banking union and the SRM within cross-border activity indicators. To mitigate the potential adverse effects of a sharp reduction in a G-SII’s allocated systemic importance, however, and in line with the revised methodology, the possibility for the relevant competent and designated authorities of reallocating a G-SII from a higher subcategory to a lower subcategory should be limited to a maximum decrease of one subcategory from the original subcategory allocation resulting from the initial G-SII overall score,. Moreover, in order to ensure consistency with the views of the BCBS, any supervisory judgement leading to a reallocation of a G-SII to a lower subcategory should adequately take into account its views.(6)Delegated Regulation (EU) No 1222/2014 should therefore be amended accordingly.(7)This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Banking Authority (EBA).(8)The EBA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits, and requested the advice of the Banking Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the CouncilRegulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).,HAS ADOPTED THIS REGULATION: