Question ID: 1046
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Status: Final
Date of submission: 20 Jan 2017
Question
Hypothesis:
- parent company holds 60% of the subsidiary
- the parent company has a subordinated loan accorded to its subsidiary (who has a subordinated liabilities): intercompany amount 30€, subordinated liabilities held by the subsidiary 100€
Log:
- Table 6 - Other strategic participations not in financial and credit institution, C0500 Subordinated liabilities : This is the value of subordinated liabilities held in each participation that are not financial and credit institutions and that are considered strategic.
Question:
Which value to fill in for C0500: 30€, 60€ or 100€? Because according to the log, it is subordinated liabilities held in each participation, not in each undertaking?
EIOPA answer
The amount to be filled in in template S.24.01.C0500 should be 30.
The template reflects the application of the standard formula to related undertakings which is clarified in Guideline 8 of EIOPA "Guidelines on treatment of related undertakings, including participations". In particular paragraph 1.36. b) clarifies that standard formula should apply to holdings in subordinated liabilities issued by the related undertaking and those holdings should be treated as financial instruments taking account of contractual terms and applying market stresses as appropriate, including the interest rate, spread, currency, concentration and other risk submodules as appropriate. In the Explanatory text of the Guidelines examples on deductions and SCR calculation are provided.
https://eiopa.europa.eu/Publications/Guidelines/Final_Report_Treatment_Related_U_GLs.pdf