in force 2024-07-09 INSERTED+2,482 −0§
Amended by Regulation (EU) 2024/1623 32024R1623
applies from: unknown (an inserted provision states its own application date only in prose)
This is a new provision requiring EBA, working closely with ESMA, to report to the Commission by 10 January 2027 on whether the minimum haircut floor framework for securities financing transactions should be implemented in Union law.
It sets out specific matters the report must address, including leverage levels outside the banking system, materiality of affected transactions, estimated impacts under different implementation approaches, drivers of those impacts, and the most effective implementation approach.
It further provides that, based on that report and relevant Financial Stability Board and BCBS standards, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and Council by 10 January 2028.
Cited: Art. 519d, v2
text before / after
inserted text (02013R0575-20240709)
Article 519d Minimum haircut floor framework for securities financing transactions 1. EBA, in close cooperation with ESMA, shall, by 10 January 2027, report to the Commission on the appropriateness of implementing in Union law the minimum haircut floor framework for securities financing transactions to address the potential build-up of leverage outside the banking sector. 2. The report referred to in paragraph 1 shall consider all of the following: (a) the degree of leverage outside the banking system in the Union and the extent to which the minimum haircut floor framework could reduce that leverage if it became excessive; (b) the materiality of the securities financing transactions held by institutions in the Union that are subject to the minimum haircut floor framework, including the breakdown of those securities financing transactions which do not comply with the minimum haircut floors; (c) the estimated impact of the minimum haircut floor framework for institutions in the Union under the two implementation approaches recommended by the Financial Stability Board, namely a market regulation or more punitive own funds requirement under this Regulation, under a scenario in which institutions in the Union would not adjust haircuts to their securities financing transactions to comply with minimum haircut floors, and the estimated impact of the minimum haircut floor framework under an alternative scenario in which institutions in the Union would adjust those haircuts to comply with minimum haircut floors; (d) the main drivers behind those estimated impacts, as well as the potential unintended consequences of introducing a minimum haircut floor framework on the functioning of the securities financing transaction markets in the Union; (e) the implementation approach that would be most effective in meeting the regulatory objectives of the minimum haircut floor framework in light of the considerations referred to in points (a) to (d) and taking into account the level playing field across the financial sector in the Union. 3. On the basis of the report referred to in paragraph 1 and taking due account of the Financial Stability Board recommendation to implement the minimum haircut floor framework for securities financing transactions, as well as the related internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 10 January 2028.