Regulatory Alerts2021-07-06
Added · Updated
CSSF Circular 21/776 on the application of alternative treatment for tri-party repurchase agreements under large exposures rules
The CSSF integrates EBA Guidelines (EBA/GL/2021/01) into its administrative practices, requiring Less Significant Institutions and branches of non-EU credit institutions to comply with conditions for applying an alternative treatment to exposures related to tri-party repurchase agreements. In-Scope entities may replace the total amount of their exposures to a collateral issuer with the full amount of limits instructed to the tri-party agent, provided they verify appropriate safeguards, have no material concerns from the authority, and ensure the sum of the limit and other exposures does not exceed the Article 395(1) CRR limit. Institutions must notify the CSSF at least four weeks prior to implementation, providing confirmation of intent, a description of the service agreement, identification of the agent, and a management body declaration of compliance. The circular applies with immediate effect, while the underlying EBA Guidelines apply from 28 June 2021.
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