- Question ID
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2023_6816
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Liquidity risk
- Article
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Annexes 24 and 25, CRR
- Paragraph
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-
- Subparagraph
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- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
- Article/Paragraph
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7(4)(g)
- Type of submitter
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Credit institution
- Subject matter
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Treatment of corporate debt securities issued by entities that are set up to raise financing for the parent company or group in the LCR liquid asset buffer
- Question
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Can corporate debt securities that are issued by entities that are set up to raise financing for the parent company or group be included in the LCR liquid asset buffer, considering that that the main business of this specific entity within the group is the participation of securities issues, which is one of the activities listed in Annex I to Directive 2013/36/EU?
- Background on the question
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Corporate debt securities are often issued by entities that are especially set up to raise finance for the Group. For example Famous Car Company X has set up subsidiary Famous Car Company X Finance Ltd. to issue corporate debt securities.
In accordance with article 7(4)(g) of the LCR Delegated Act assets from entities that perform one or more of the activities listed in Annex I to Directive 2013/36/EU should be excluded from the LCR liquid assets. How should we interpret article 7(4)(g), i.e. should we look at the activities from the issuing entity specifically or at the activities of the group as a whole? And does it matter whether or not the parent company guarantees the obligations of the issuing entity?
- Submission date
- Rejected publishing date
-
- Rationale for rejection
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This question has been rejected because the issue it deals with is already explained or addressed in Article 7(4)(g) of the LCR Delegated Regulation.
For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.
- Status
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Rejected question