Article 28(3) of Delegated Regulation (EU) No 241/2014, RTS on Own Funds and Eligible Liabilities (RTS) establishes that, in the case a general prior permission referred to in the second subparagraph of Article 78(1) of Regulation (EU) No 575/2013 (CRR) has been granted, the predetermined amount for which the competent authority has given its permission shall be deducted from corresponding elements of the institution’s own funds from the moment the authorisation is granted.

In accordance with the second subparagraph of Article 78(1) CRR, the general prior permission shall be granted only for a specified period of time, which shall not exceed one year, after which it may be renewed.

If the institution does not take any of the actions listed in Article 77(1) CRR to reduce the entire predetermined amount of own funds for which the general prior permission has been granted, the unredeemed part of own funds does no longer have to be deducted from the moment this permission expires (that is, once the specified period of time for which the permission had been granted has passed) without the need for a permission to do so.

The deduction for the unredeemed own funds amount shall also cease to be made following the competent authority’s withdrawal of the general prior permission for example as a result of an institution breaching any of the criteria provided for the purposes of that permission or based on the institution’s request for a withdrawal of the permission.

The same reasoning applies in the context of a prior permission being granted for any action listed in Article 77(2) CRR in accordance with the second subparagraph of Article 78a(1) CRR and Article 32b(3) of the RTS.

Disclaimer: References to Commission Delegated Regulation (EU) No 241/2014 in all sections of the Q&A except those in the “EBA Answer” section are to that Regulation as it is currently in force. However, in the “EBA Answer” section, references to Delegated Regulation (EU) No 241/2014 are to that Regulation after its forthcoming amendment by the Draft Regulated Technical Standard on Own Funds and Eligible Liabilities (EBA/RTS/2021/05) as adopted by the Commission (C(2022)7138), but which is not yet in force, and this should be considered. The EBA will revise its response, where needed, after these amending technical standards come into force.