Circular Letter No. CC/2023/00000004: CEBS Guidelines on Short-Term Risk Positions Exemptions for Large Exposures

Circular Letter No. CC/2023/00000004 Sent to: Credit Institutions and Financial Companies. Form 40000375/T – 01/14 Subject: Guidelines of the Committee of European Banking Supervisors (CEBS) regarding the exclusion of certain very short-term risk positions for the purpose of calculating risk value under the large exposures regime, dated July 28, 2010 (“Implementation guidelines on Article 106 (2) (c) and (d) of Directive 2006/48/EC recast”)

The European Banking Authority (EBA) published, on December 17, 2021, the response to Q&A 2020_5340, through which it clarified its understanding regarding the validity of the Guidelines of the Committee of European Banking Supervisors (CEBS), concerning the exclusion of certain very short-term risk positions for the purpose of calculating risk value under the large exposures regime, dated July 28, 2010 (“Implementation guidelines on Article 106 (2) (c) and (d) of Directive 2006/48/EC recast”).

In accordance with Recital (10) and Article 76 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of November 24, 20101, the EBA replaced the CEBS, assuming its duties and competencies; therefore, this Authority considers that those Guidelines remain applicable by reference to points (c) and (d) of paragraph 6 of Article 390 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 20132 (“CRR”), which correspond to points (c) and (d) of paragraph 2 of Article 106 of Directive 2006/48/EC of the European Parliament and of the Council of June 14, 20063 (“CRD”), subsequently repealed (cf. Correspondence Table in Annex IV of the CRR).

The Guidelines in question aim to assist in the interpretation of the aforementioned points (c) and (d) of paragraph 6 of Article 390 of the CRR, related to the exclusion of very short-term risk positions for the purpose of calculating risk value under the large exposures regime, associated with fund transfers, including the provision of payment services, clearing and settlement, and custody of assets for clients.

The Banco de Portugal emphasizes the importance of less significant credit institutions and entities covered by Article 1 of Banco de Portugal Notice No. 11/2014 (hereinafter referred to as “institutions”) giving due compliance to the Guidelines in question, which must be followed and applied in the context of the legislation and regulation currently in force applicable to them. These Guidelines will be taken into consideration by the Banco de Portugal in the interpretation of the legal and regulatory provisions applicable to institutions, for the purpose of verifying compliance therewith.

1 Cf. Regulation (EU) No 1093/2010 of the European Parliament and of the Council of November 24, 2010, establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC. 2 Cf. Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013, on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (“CRR”). 3 Cf. Directive 2006/48/EC of the European Parliament and of the Council of June 14, 2006, on the taking up and pursuit of the business of credit institutions.

Form 40000375/T – 01/14 CEBS Guidelines “Implementation guidelines on Article 106(2)(c) and (d) of Directive 2006/48/EC recast”, dated July 28, 2010: https://www.eba.europa.eu/implementation-guidelines-on-large-exposures-exemptions-for-money-transmission-correspondent-banking-clearing-and-settlement-and-custody-services Q&A 2020_5340: https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2020_5340