NBB_2017_05 Circular / NBB's Expectations Regarding Regulatory Capital and Liquidity Requirements for Less Significant Credit Institutions

NBB_2017_05 – February 24, 2017 Circular – Page 1/8 boulevard de Berlaimont 14 – BE-1000 Brussels tel. +32 2 221 38 12 – fax + 32 2 221 31 04 company number: 0203.201.340 RPR Brussels www.bnb.be Circular Brussels, February 24, 2017 Reference: NBB_2017_05 your contact person:
Gertjan van Gastel tel. +32 2 221 27 88 – fax +32 2 221 31 04 gertjan.vangastel@nbb.be NBB's Expectations Regarding Regulatory Capital and Liquidity Requirements for Less Significant Credit Institutions Scope This circular applies to less significant Belgian credit institutions as defined by Council Regulation (EU) No 1024/2013 1,2.
Summary/Objectives
This NBB circular provides clarifications on a series of requirements applicable to less significant credit institutions regarding capital and coverage of regulatory liquidity needs. These requirements concern: 1) the recognition of interim profits; 2) dividend distribution; 3) the establishment of a variable remuneration policy; 4) the establishment of an ICAAP and ILAAP report; 5) permission to reduce own funds; 6) prior authorization for the inclusion of Additional Tier 1 capital instruments and Tier 2 capital in regulatory own funds; 7) the treatment of reserves held with central banks according to the liquidity coverage ratio. This circular, which replaces circular NBB_2016_05, will be updated if deemed appropriate. It is therefore not a definitive document. 1 Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions. 2 Branches of credit institutions located outside the EEA are not subject to the capital and liquidity requirements imposed by European Regulation 575/2013 and therefore fall outside the scope of this circular.