NBB Circular NBB_2021_22: EBA Guidelines on the Treatment of Structural FX Positions under Article 352(2) of Regulation (EU) No 575/2013

NBB_2021_22 – 26 October 2021 Circular – Page 1/2 boulevard de Berlaimont 14 – BE-1000 Brussels tel. +32 2 221 54 65 company number: 0203.201.340 RPM Brussels www.bnb.be

Circular
Brussels, 26 October 2021
Reference: NBB_2021_22 your contact:
Gaëtan Doucet tel. +32 2 221 38 10 gaetan.doucet@nbb.be

European Banking Authority (EBA) Guidelines of 1 July 2020 on the treatment of structural foreign exchange positions under Article 352, paragraph 2, of Regulation (EU) No 575/2013 (Capital Requirements Regulation)

Scope
This circular applies to Belgian credit institutions and approved or designated Belgian financial companies (hereinafter 'institutions'), and to Belgian investment firms referred to in Article 1, paragraphs 2 and 5 of Regulation 2019/2033 (hereinafter, 'significant Belgian investment firms').

Summary/Objectives
The EBA Guidelines EBA/GL/2020/09 (hereinafter 'the EBA Guidelines on the treatment of structural foreign exchange positions under Article 352, paragraph 2, of Regulation (EU) No 575/2013') specify the conditions that a Belgian institution or significant Belgian investment firm should meet if it decides to use the treatment provided for in Article 352, paragraph 2 of Regulation (EU) No 575/2013 concerning structural foreign exchange positions for the calculation of capital requirements. These guidelines apply from 1 January 2022. This circular clarifies the NBB's approach regarding less significant institutions (LSI) and significant Belgian investment firms. It is recommended that significant institutions subject to direct ECB supervision follow this circular to the extent that the ECB does not publish guidelines on this matter.

Circular – Page 2/2 NBB_2021_22 – 26 October 2021

Madam,
Sir,

The National Bank of Belgium wishes to indicate by this circular that the EBA guidelines specifying the conditions for applying the treatment referred to in Article 352, paragraph 2 of Regulation (EU) No 575/2013 (CRR) concerning structural foreign exchange positions, are integrated into its supervisory practice. These guidelines apply from 1 January 2022. In order to benefit from the provisions provided for in Article 352, paragraph 2 (CRR), the guidelines specify the process to be followed, in particular:

• the eligibility criteria are described (in particular, the level of application, the currencies concerned, the covered ratio),
• the criteria for assessing the structural nature of positions, as well as those concerning the intention to cover the ratio (in particular governance aspects and the risk management strategy for structural positions),
• the size of the position that may be excluded,
• the permanent monitoring of the authorization (reporting elements, as well as the frequency of such reporting).
  The EBA Guidelines on the treatment of structural foreign exchange positions provided for in Article 352, paragraph 2 (CRR) can be consulted on the EBA website:
  EBA-GL-2020-09 Guidelines on Structural FX_COR_FR.docx (europa.eu) or on the NBB website (www.nbb.be).
  A copy of this circular is sent to the auditor(s), approved auditor(s) of your institution.

Please accept, Madam, Sir, the assurance of my distinguished consideration.

Pierre Wunsch
Governor