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13 December 2013 Supervision

The CRD IV and CRR Specific Provisions Regulation, referred to below as 'the Regulation', contains specific provisions relating to the Capital Requirements Directive IV or 'CRD IV' (No. 2013/36/EU) and the Capital Requirements Regulation or ‘CRR’ (no. 575/2013).

DNB held consultations on the Regulation from 4 to 20 November 2013. The feedback received by DNB on the Regulation and DNB's own response to the feedback can be found in the feedback statement. The Regulation was published in the Government Gazette on 19 December 2013 and will enter into force on 1 January 2014.

This supervisory regulation sets out how the options and discretions under the CRR have been exercised in relation to the national competent authority. DNB is designated for this purpose in relation to the CRR in Article 2 of the Amendment to the Decree implementing the EU Financial Markets Regulations in connection with the execution and enforcement of the CRR (Bulletin of Acts and Decrees 2013, 488).

In the Netherlands, the options and discretions for the Member States will be exercised by the Minister of Finance. Any exercise by DNB of options and discretions under CRD IV depends on the transposition of CRD IV into the Financial Supervision Act (Wet op het financieel toezicht or Wft) and related general administrative orders, in particular in the Decree on Prudential Rules for Financial Undertakings (Besluit prudentiële regels Wft or Bpr). Only when this implementing statute and decrees are ready will it be clear to DNB how much scope it has to arrange matters in the Regulation (in addition to its existing provisions). Allowance has accordingly been made for this in the Regulation.

Regulation contains:

  • Definitions and provisions determining its scope, the obligation to apply for an authorisation for the issue of capital instruments if they are to qualify as Additional Tier 1 or Tier 2 capital and the duty of notification in respect of the exercise of options and discretions by institutions – Chapter 1;

  • Further rules on capital buffers. These will be elaborated later before the actual accumulation of the buffers has to be started and the European Banking Authority (EBA) has adopted regulatory or implementing technical standards governing the method – Section 2.1;

  • Rules for calculating the Maximum Distributable Amount (MDA) for the purposes of the correct application of the capital buffer – Section 2.2;

  • Macroprudential measures. The CRR provides for the possibility of taking, where necessary, temporary measures to deal with systemic risks. To date DNB has not taken such measures. This chapter has been reserved for the possible inclusion of such measures in the regulation – Chapter 3;

  • Provisions elaborating the options and discretions which the national competent authority may exercise under the CRR (in relation to exposures to CCPs, large exposures and IRB models) – Chapter 4;

  • Provisions elaborating the transitional periods and percentages, in particular in the definition of capital – Chapter 5; and

  • Repeal of DNB's existing supervisory regulations and certain final provisions – Chapter 6.

The Regulation repeals existing supervisory regulations insofar as they are inconsistent or overlap with the CRR. The CRR is directly applicable and transposition of this EU Regulation into national law is not permitted. In the event of inconsistencies or overlap, the text of the CRR takes precedence.

This also has consequences for DNB's supervisory regulations. The great majority of the rules in these regulations are contained in the CRR. Institutions must therefore comply with the rules contained in the CRR from 1 January 2014. The great majority of DNB's existing supervisory regulations can therefore be repealed.

The Regulation will apply to credit institutions within the meaning of the CRR, opt-in banks and investment firms within the meaning of the CRR, as well as to clearing institutions that are subject to the same supervision under national law for the relevant parts of the prudential framework.