Art. 197

02013R0575-20240709 → 02013R0575-20250101

Article 197 Eligibility of collateral under all approaches and methods 1. Institutions may use the following items as eligible collateral under all approaches and methods: (a) cash on deposit with, or cash assimilated instruments held by, the lending institution; (b) debt securities securities, issued by central governments or central banks, which securities have a credit assessment by an ECAI or export credit agency recognised as eligible where: (i) the ECAI or export credit agency has been nominated by the institution for the purposes of Chapter 2 which 2; and (ii) the credit assessment has been determined by EBA to be associated with credit quality step 1, 2, 3 or 4 or above under the rules for the risk weighting of exposures to central governments and central banks under Chapter 2; (c) debt securities securities, issued by institutions or investment firms, institutions, which securities have a credit assessment by an ECAI which where: (i) the ECAI has been nominated by the institution for the purposes of Chapter 2; and (ii) the credit assessment has been determined by EBA to be associated with credit quality step 1, 2 or 3 or above under the rules for the risk weighting of exposures to institutions under Chapter 2; (d) debt securities securities, issued by other entities entities, which securities have a credit assessment by an ECAI which where: (i) the ECAI has been nominated by the institution for the purposes of Chapter 2; and (ii) the credit assessment has been determined by EBA to be associated with credit quality step 1, 2 or 3 or above under the rules for the risk weighting of exposures to corporates under Chapter 2; (e) debt securities with having a short-term credit assessment by an ECAI which where: (i) the ECAI has been nominated by the institution for the purposes of Chapter 2; and (ii) the credit assessment has been determined by EBA to be associated with credit quality step 1, 2 or 3 or above under the rules for the risk weighting of short term short-term exposures under Chapter 2; (f) equities or convertible bonds that are included in a main index; (g) gold; gold bullion; (h) securitisation positions that are not resecuritisation positions and which are subject to a 100 % risk weight or lower in accordance with Article 261 to Article 264. 2. For the purposes of point (b) of paragraph 1, debt securities issued … 390 unchanged words … first subparagraph shall apply equally to any such underlying CIU. The use by a CIU of derivative instruments to hedge permitted investments shall not prevent units or shares in that undertaking from being eligible as collateral. 6. For the purposes of paragraph 5, 5 of this Article, where a CIU (the original CIU) or any of its underlying CIUs are not limited to investing in instruments that are eligible under paragraphs 1 and 4, 4 of this Article, the following shall apply: (a) where the institutions apply the look-through approach referred to in Article 132a(1) or Article 152(2) for direct exposures to a CIU, they may use units or shares in that CIU as collateral up to an the amount equal to the value of the eligible assets instruments held by that CIU that are eligible under paragraphs 1 and 4 of this Article; (b) where institutions apply the mandate-based approach referred to in Article 132a(2) or 152(5) for direct exposures to a CIU, they may use units or shares in that CIU as collateral up to the amount equal to the value of the instruments held by that CIU that are eligible under paragraphs 1 and 4 of this Article under the assumption that that CIU or any of its underlying CIUs have invested in non-eligible assets instruments to the maximum extent allowed under their respective mandates. Where any underlying CIU has underlying CIUs of its own, institutions may use units or shares in the original CIU as eligible collateral provided that they apply the methodology laid down in the first subparagraph. Where non-eligible assets can have a negative value due to liabilities or contingent liabilities resulting from ownership, institutions shall do both of the following: (a) calculate the total value of the non-eligible assets; (b) where the amount obtained under point (a) is negative, subtract the absolute value of that amount from the total value of the eligible assets. 7. With regard to points (b) to (e) of paragraph 1, where a security has two credit assessments by ECAIs, institutions shall apply the less favourable assessment. Where a security has more than two credit assessments by ECAIs, institutions shall apply the two most favourable assessments. Where the two most favourable credit assessments are different, institutions shall apply the less favourable of the two. 8. ESMA shall develop draft implementing technical standards to specify the following: (a) the main indices referred to in point (f) of paragraph 1 of this Article, in point (a) of Article 198(1), in Article 224(1) and (4), and in point (e) of Article 299(2); (b) the recognised exchanges referred to in point (a) of paragraph 4 of this Article, in point (a) of Article 198(1), in Article 224(1) and (4), in point (e) of Article 299(2), in point (k) of Article 400(2), in point (e) of Article 416(3), in point (c) of Article 428(1), and in point 12 of Annex III in accordance with the conditions laid down in point (72) of Article 4(1). ESMA shall submit those draft implementing technical standards to the Commission by 31 December 2014. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.