On August 21, 2017, the European Commission published the text of a Delegated Regulation that amends the Capital Requirements Regulation (Regulation 573/2013) (“CRR“). The main amendment pertains to Article 496(1) of the CRR. Currently, Article 496(1) allows competent authorities to waive, for certain covered bonds, the threshold of 10% referred to in Article 129 CRR until December 31, 2017.

The Commission has stated, however, that, given that some institutions rely in their business models on the use of this threshold waiver, it is appropriate for legal certainty to amend Article 496(1) to make the waiver permanent without the time limitation.

The Commission adopted the Delegated Regulation on August 11, 2017, and it is now for the Council of the EU and European Parliament to consider the Delegated Regulation. If neither objects, it will be published in the Official Journal of the EU and enter into force 20 days after its publication in the same. It will then start to apply from January 1, 2018.

To see the Delegated Regulation in full, please click here.