AFME welcomes ECON Committee vote on Basel 3 package

The Association for Financial Markets in Europe (AFME) welcomes the agreement by the European Parliament’s Committee on Economic and Monetary Affairs (ECON) on the CRR3 legislation as a step to the final implementation of the Basel III reforms in the EU.
+ The decision of the Committee to apply the Output Floor at the consolidated level, is welcomed by the industry, as it is consistent with the calibration at Basel.
+ AFME agrees with the importance of securitisation in financing the economy and is pleased with the adjustments made during the transition period until a thorough review of the securitisation framework is published.
+ In addition, AFME welcomes the reforms to the trading book. With the adoption of a delegated act for market risk, a globally consistent application of market risk capital rules can be achieved.
The expanded definition of third party providers and other clarifications on how participations in funds are treated under the FRTB are welcomed by AFME.
+ The postponement of the CRR2-mandated Trading Book (TB) and Banking Book (BB) Boundary to January 1, 2025 is applauded by AFME. This adjustment lessens the operational load, complexity, and potential rigidity in instrument designation that would have been caused by the two-step approach and aids in the cohesive implementation of the TB/BB boundary that has been split between the CRR2 and CRR3.
+ The proposed access requirements for third country undertakings need to be prevented from having a significant negative impact on the ability of EU financial institutions, corporations, governmental organizations, and individuals to access international markets and cross-border services. AFME favors the Council’s proposal to delete proposed Articles 21c and 48c(1), which would have required Member States to require third-country undertakings to open a branch on their soil.
+ The interim approach, which applies a risk weight of 1250% to crypto-assets until 31 December 2024, could affect tokenised securities as there is no definition of a crypto-asset in the CRR. Therefore, the scope of application should be determined in the trilogue procedure.