The EBA publishes amendments to disclosures and reporting on MREL and TLAC

EBA has released draft ITS amending the ITS on disclosures and reporting on MREL and TLAC. These modifications, set to take effect from 30 June 2024, are in response to changes in the prudential framework, particularly the introduction of the ’daisy chain‘ framework. The ‚daisy chain‘ framework mandates entities not designated as resolution entities to deduct investments in eligible liabilities instruments issued by their subsidiaries from their eligible liabilities. This requirement, specified in Article 92b CRR, applies from 1 January 2024.
The amendments also address various aspects of reporting, such as information related to the prior permission regime for repurchasing eligible liabilities instruments and a breakdown by insolvency ranking. Institutions have been disclosing information and reporting to competent and resolution authorities in accordance with the ITS on disclosures and reporting on MREL and TLAC since 2021. The adjustments were deemed necessary due to amendments to the CRR and to clarify certain issues raised through the Single Rulebook Q&A process.
Of particular note is the handling of prior permissions for buying back eligible liabilities instruments. The ITS provide guidance on reporting unused amounts covered by prior permissions, aligning with the approach applied in COREP, where the unused part of the predetermined amount is reported as a deduction. The amendments are expected to contribute to the effective implementation of MREL and TLAC requirements by enhancing transparency and aligning reporting standards with the evolving prudential framework.
The EBA will further develop a technical package, including a data point model, validation rules, and XBRL taxonomy, to incorporate these amendments into the reporting framework. The changes are anticipated to strengthen the regulatory framework and ensure consistency in reporting practices across banking institutions.