Decree No. 354 / 2021 Coll.
Decree amending Decree No. 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers, as amended by Decree No. 392 / 2017 Coll.
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354
DECLARATION
of 20 September 2021
amending Decree No 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers, as amended by Decree No 392 / 2017 Coll.
The Czech National Bank provides pursuant to § 8b (9), § 11a (4), § 11b (7), § 12a (5), § 12m (6), § 12y (4), § 13 (2), § 15 (2) and § 24 (1) of Act No. 256 / 1992 Coll., on Banks, as amended by Act No. 135 / 2014 Coll. and Act No. 353 / 2021 Coll., under § 7a (5), § 7b (7), § 8aj (5), § 8b (5), § 11 (2) and § 27 (1) of Act No. 87 / 1995 Coll., on spořiteln., on spořitelné and on certain measures relating to the Czech National Council Act No. 586 / 1992 Coll.
Decree No. 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers, as amended by Decree No. 392 / 2017 Coll., is amended as follows:
1. footnotes 1 and 2 shall read:
"(1) Directive 2013 / 36 / EU of the European Parliament and of the Council of 26 June 2013 on the taking up and prudential supervision of credit institutions and amending Directive 2002 / 87 / EC and repealing Directives 2006 / 48 / EC and 2006 / 49 / EC, as amended by Directives 2014 / 17 / EU, 2014 / 59 / EU, (EU) 2015 / 2366, (EU) 2018 / 843, (EU) 2019 / 878, (EU) 2019 / 2034 and (EU) 2021 / 338.
(2) Regulation (EU) No 575 / 2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648 / 2012, as amended. ';
2. In Section 2, the word "applies' is replaced by the word" applies' and after the word "papers' the words" financial holding company or mixed financial holding company approved under Section 27 (1) of the Banking Act, a person temporarily designated under Section 31 (2) of the Banking Act 'are inserted.
3.
(1) Part Three, Titles I and III and Part Four, Titles I and V shall not apply to the Bank.
(2) Paragraphs 69a to 69c do not apply to a bank that is not designated as a global systemically important institution under Section 12 of the Banking Act.
(3) Paragraph 1 (3) (h) of the Banking Act does not apply to a bank that does not have an authorised activity in a bank licence.
(4) For savings and credit cooperatives, part three of Title I, Sections 69a to 69c, part three of Title III and part four of Title I and V shall not apply.
Section 116a of the Capital Market Act applies to a securities trader.
(1) Section 8 to 51, Section 63 to 70, Section 97, 99 and 101 shall apply to a financial holding person or mixed financial holding entity approved under Section 27 (1) of the Banking Act and to a person temporarily designated under Section 31 (2) of the Banking Act.
(2) The person referred to in paragraph 1 who is designated as a global systemically important institution under Section 12 of the Banking Act shall be subject to Sections 69a to 69c.
Sections 52 to 62, 70a to 74, 76, 78, 91, 92, 95, 98, 100 and 101, 107 to 116, 116b and 118 shall apply to the branch of a bank other than a Member State. '
4. In Article 7 (1) (b), the words "of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648 / 2012 'are deleted.
5. in Article 7 (1) (i), the words "the customer of the securities dealer" shall be deleted;
6. In Article 7 (3) (c), the words "securities dealer 'are replaced by" financial holding company or mixed financial holding company approved under Section 27 (1) of the Banking Act, a person temporarily designated under Section 31 (2) of the Banking Act'.
7. In Part Two, Title I:
"REQUIREMENTS FOR THE MANAGEMENT AND CONTROL SYSTEM
(Articles 8b (9), 8c (3) and 10a (3) of the Banking Act and 7a (5), 7ab (3) and 7ad (3) of the Savings and Credit Cooperatives Act) '.
8. In Section 8, the second sentence is deleted.
9. In Paragraph 10 (1), the words "and the consolidation unit 'are deleted.
10. In Paragraph 11 (3), the part of the sentence behind the semicolon, including the semicolon, is deleted.
11. in Paragraph 20 (1):
"(1) The obliged entity shall ensure that the organisational arrangements and internal rules governing it shall specify clearly and comprehensively the competences and powers, the main information flows and the links of the authorities, committees, where they are established, their members and other staff and the departments of the obliged entity. ';
12. In Paragraph 20, the following paragraph 2 is inserted after paragraph 1:
"(2) The obliged entity shall also ensure that arrangements for the performance of certain activities within the group of which it is a member, in the form of centralisation or similar form, including the application of group models,
(a) does not interfere with the proper performance of the legal and contractual obligations of the obliged entity;
(b) does not unduly restrict the information of the obliged entity; and
(c) does not weaken other significant performance assumptions in accordance with prudent business rules, including the assumption of a sufficient understanding of the activities so organised and the possibility of adequate influence on their performance by the obliged person. ";
Paragraphs 2 to 4 shall become paragraphs 3 to 5.
13. in Article 26 (2), the words "on an individual and consolidated basis," shall be deleted;
14. in Article 26 (3), the words "even within a consolidation unit set up for prudential requirements" shall be deleted;
15. in Article 31 (b), the words "participation in a consolidation unit" shall be replaced by the words "membership in a group" and the words "the same consolidation unit" shall be replaced by "the same group."
16. In Paragraph 38, paragraphs 2 to 5 are deleted.
Paragraph 6 shall become paragraph 2.
17. the following Paragraph 38a is inserted after Paragraph 38:
(1) The obliged entity shall establish and maintain internal systems for the management of the interest rate risk of the investment portfolio and shall apply a standardised methodology or a simplified standardised methodology for the identification, evaluation, management and reduction of risks arising from any changes in interest rates affecting both the economic value of the equity capital and the net interest income from the investment portfolio of the obligor.
(2) The obligor shall establish and maintain systems for the assessment and monitoring of risks arising from any changes in the credit spreads affecting both the economic value of the equity capital and the net interest income on the investment portfolio of the obligor.
(3) The mandatory person shall also use the standardised methodology referred to in paragraph 1 where the Czech National Bank has assessed, in the context of the review and evaluation process, that the use of the simplified standardised methodology referred to in paragraph 1 is insufficient due to the obliged entity's internal systems for managing the investment portfolio's interest rate risk.
(4) A obliged entity which is a small and not very complex institution pursuant to Article 4 (1) (145) of the Regulation uses a standardised methodology where a simplified standardised methodology is not appropriate to identify the interest rate risk arising from its investment portfolio.
(5) If the economic value of the obligor's equity capital is reduced by more than 15% of its Tier 1 capital due to a sudden and unexpected change in interest rates as described in any of the 6 supervisory shock scenarios, the obligor shall take without undue delay measures which he informs the Czech National Bank without undue delay. The obliged entity shall reflect modelling and parametric assumptions in the calculation of the economic value of equity.
(6) If, due to a sudden and unexpected change in interest rates as described in one of the 2 supervisory shock scenarios for interest rates, a significant decrease in net interest income occurs for the obligor, the obligor shall take without undue delay measures, which he shall inform the Czech National Bank without undue delay. The obliged entity shall reflect modelling and parametric assumptions in the calculation of the net interest income.
(7) The specification of the standardised methodology and the simplified standardised methodology referred to in paragraph 1, the modelling and parametric assumptions referred to in paragraphs 5 and 6 and the supervisory scenarios referred to in paragraphs 5 and 6 are laid down in a directly applicable European Union Regulation issued pursuant to Articles 84 (5) and 98 (5a) of Directive 2013 / 36 / EU of the European Parliament and of the Council. '
18. In Paragraph 40 (1), the words "and outsourcing risks' shall be inserted after the words" models'.
19. In Part Three of Title I:
"RULES FOR CALCULATION OF THE CAPITAL CHANGE OF THE BANK OF OTHER THAN THE MEMBER STATE
(K § 12a (5) of the Banking Act) '.
20. in Article 56 (3) to (5), the words "and 79a" shall be inserted after the words "79."
21. In Part Three of Title II:
"CAPITAL RESERVES
(K § 12m (6) of the Banking Act and § 8aj (5) of the Act on Savings and Credit Cooperatives) '.
22. Paragraph 63 (4), including footnote 14, reads as follows:
"(4) In determining the country where the credit exposure is located, the obligor shall proceed in accordance with the directly applicable European Union Regulation issued in accordance with Article 140 (5) and (7) of Directive 2013 / 36 / EU of the European Parliament and of the Council (14).
(14) Commission Delegated Regulation (EU) No 1152 / 2014 of 4 June 2014 supplementing Directive 2013 / 36 / EU of the European Parliament and of the Council with regard to regulatory technical standards for determining the geographical area of the relevant credit exposures for the calculation of the individual countercyclical buffer rate. ';
23. Paragraph 64 (1) to (3) reads as follows:
"(1) The systemic risk buffer for the relevant obligor shall be calculated according to the relationship
SRB = rT · TRE + Σiri · TREi,
where
SRB refers to the capital reserve to cover systemic risk to the relevant obligor, expressed in Czech crowns,
rT refers to the systemic risk buffer rate for the total risk exposure amount determined by the Czech National Bank,
ri denotes the buffer rate applicable to a subset of risk exposure amounts;
i denotes the sub-set of exposures determined in accordance with paragraph 2;
TRE refers to the total risk exposure amount calculated in accordance with Article 92 (3) of the Regulation, determined on an individual or consolidated basis, expressed in Czech crowns,
TREi indicates the risk exposure amount for the sub-set of exposures as well as calculated in accordance with Article 92 (3) of the Regulation.
(2) The obligor will include each risk exposure in the relevant subset of risk exposures for which the Czech National Bank sets or recognises a special buffer rate to cover systemic risk. Individual risk exposure shall be included in all relevant subsets. A subset of subsets shall be created by the obligor depending on the subset of the obligors, the sector or, where appropriate, the subsector or geographical location of exposures in each Member State.
(3) The method of determining the geographical location of risk exposures in a particular State is the same as for the relevant exposures in the case of the countercyclical buffer. Risk exposures which cannot be clearly identified in this way shall be considered as risk exposures located in the Czech Republic. '
24. In Section 65, the words "Capital Market Enterprise Act," are deleted.
25. Paragraph 66 (2) reads:
"(2) The following rules shall apply to the determination of the capital buffer for a systemically significant institution and systemic risk buffer:
(a) where the obliged entity on a consolidated basis is subject to a capital buffer for a global systemically significant institution and a capital buffer for another systemically significant institution, the higher capital buffer shall apply;
(b) where the obligor is subject to a capital buffer either for a global systemically significant institution or for another systemically significant institution, and at the same time is subject to a systemic risk buffer, both reserves shall apply. ";
26. In Paragraph 66, paragraphs 3 to 5 are deleted.
27. in Paragraph 67 (1):
"(1) The obligor shall fill the individual components of the combined buffer that apply to it with Common Equity Tier 1 capital available for that purpose separately and shall not use Common Equity Tier 1 capital maintained for the purpose of meeting one or part of the capital buffer to meet another capital buffer or part thereof. ';
28. Paragraph 67 (2) is deleted.
Paragraph 3 shall become paragraph 2.
29. Paragraph 68 (1) to (4) reads as follows:
"(1) Compulsory person who does not fulfil the combined buffer,
(a) calculate the maximum amount for the possible allocation referred to in paragraph 2 and inform the Czech National Bank thereof without undue delay;
(b) it shall not be entitled to:
1. Decide on the distribution of Common Equity Tier 1 capital under Paragraph 67 (2),
2. take over a liability to pay variable remuneration or special pension benefits, or to pay variable remuneration if the obligation to pay variable remuneration arose at a time when the obligor did not meet the combined buffer;
3. make payments related to Additional Tier 1 instruments;
(c) by means of the activities referred to in (b), shall not divide an amount higher than the maximum amount for the possible allocation referred to in paragraph 2.
(2) The person responsible shall calculate the maximum amount for the possible breakdown by relationship
MDA = (PI + PYE - T),
where
The MDA indicates the maximum amount to be allocated in relation to the combined buffer,
The PI shall refer to the interim profit not included in Common Equity Tier 1 capital referred to in Article 26 (2) of the Regulation minus any distribution of profits or payments resulting from any of the measures referred to in paragraph 1 (b),
PYE denotes profit for the previous financial year not included in Common Equity Tier 1 capital pursuant to Article 26 (2) of the Regulation, minus any distribution of profits or payments resulting from any of the measures referred to in paragraph 1 (b),
T denotes a tax that would be payable if PI and PYE profits were not distributed,
F denotes the multiplier factor.
(3) The multiplier factor shall be determined by the obliged entity in such a way that, where the Common Equity Tier 1 capital maintained by the obliged entity in excess of the own funds requirements referred to in Article 92 (1) (a), (b) and (c), Article 92a and 92b of the Regulation, in excess of the own funds requirements imposed by it following the results of the review and evaluation, by means of the adjustment measures and the instructions for holding additional own funds to address risks other than the risks of excessive leverage and beyond the risk-based component of the minimum own funds requirement and eligible liabilities under the financial market adjustment and resolution law, expressed as a percentage in relation to the total risk exposure as referred to in Article 92 (3) of the Regulation,
(a) in the first (lowest) interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, the multiplier factor shall be 0;
(b) in the second interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, the multiplier factor is then equal to 0,2;
(c) in the third interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, the multiplier factor shall be 0,4;
(d) in the fourth interval of the required combined buffer, or higher than its lower limit, the multiplier factor is then 0,6.
(4) The obliged entity shall calculate the lower and upper limits of each interval by relationship
DHQn = CombiB4 · Qn-1a
HHQn = CombiB4 · Qn,
where
DHQn indicates the lower limit of each interval,
HHQn denotes the upper limit of each interval,
CombiB refers to the total combined capital reserve to be maintained by the obliged entity, expressed in Czech crowns,
Qn denotes the serial number of the relevant interval and becomes 1, 2, 3 or 4. '
30. In Article 68, the following paragraph 5 is added:
"(5) The obligor does not comply with the combined buffer requirement unless he has the amount and quality of own funds required to meet the combined buffer requirement at the same time as each of the following requirements:
(a) pursuant to Article 92 (1) (a) of the Regulation, Articles 92a and 92b of the Regulation and the own funds requirements imposed on it following the results of the review and evaluation, by means of measures to correct and guide the holding of additional capital to address risks other than those of excessive leverage, and in addition to the risk-based component of the minimum capital requirement and eligible liabilities under the Law on Recovery and Resolution in the Financial Market;
(b) pursuant to Article 92 (1) (b) of the Regulation, Articles 92a and 92b of the Regulation and the own funds requirements imposed on it following the results of the review and evaluation, by means of measures to remedy and guide the holding of additional own funds to address risks other than those of excessive leverage, and in addition to the risk-based component of the minimum capital requirement and eligible liabilities under the Law on Recovery and Resolution in the Financial Market;
(c) pursuant to Article 92 (1) (c) of the Regulation, Articles 92a and 92b of the Regulation and the own funds requirements imposed on it following the results of the review and evaluation, by means of measures to remedy and guide the holding of additional own funds to address risks other than those of excessive leverage, and in addition to the risk-based component of the minimum capital requirement and eligible liabilities under the law governing the recovery and resolution of the financial market. ';
31. in Article 69 (2) of the introductory part of the provision, the words "or parts thereof" shall be inserted after the word "division."
32. in Paragraph 69 (3):
"(3) The obligor shall ensure that the highest amount is quantified in order to possible distribution calculated in accordance with Paragraph 68 (2) and the effects of the envisaged measures under paragraph 2 (e) and can demonstrate to the Czech National Bank, upon request, the accuracy of this calculation. '
33. After Paragraph 69, the following Sections 69a to 69c are inserted:
"Capital buffer to leverage ratio and restrictions related thereto
The distribution of Common Equity Tier 1 capital in relation to the leverage ratio shall be understood as the distribution referred to in Article 67 (2).
(1) Mandatory person who does not meet the buffer requirement;
(a) calculate the maximum amount for possible distribution related to the leverage ratio and notify the Czech National Bank of this amount;
(b) is not entitled before calculating the maximum amount to be allocated in relation to the leverage ratio,
1. decide on the distribution of Common Equity Tier 1 capital in relation to the leverage ratio;
2. take over a liability to pay variable remuneration or special pension benefits, or to pay variable remuneration if the obligation to pay variable remuneration arose at a time when the obligor did not meet the combined buffer;
3. make payments related to Additional Tier 1 instruments;
(c) divide by the activities referred to in point (b) an amount higher than the maximum amount for the possible distribution related to the leverage ratio calculated in accordance with paragraph 2.
(2) The obligor shall calculate the maximum amount to be allocated in relation to the leverage ratio by relationship
L-MDA = (PI + PYE - T) · F,
where
L-MDA indicates the maximum amount to be allocated in relation to the leverage ratio,
The PI shall refer to the interim profit not included in Common Equity Tier 1 capital referred to in Article 26 (2) of the Regulation minus any distribution of profits or payments resulting from any of the measures referred to in paragraph 1 (b),
PYE denotes profit for the previous financial year not included in Common Equity Tier 1 capital pursuant to Article 26 (2) of the Regulation, minus any distribution of profits or payments resulting from any of the measures referred to in paragraph 1 (b),
T denotes a tax that would be payable if PI and PYE profits were not distributed,
F denotes the multiplier factor.
(3) The multiplier factor shall be determined by the obliged entity in such a way that, where the Common Equity Tier 1 capital maintained by the obliged entity in excess of the own funds requirements referred to in Article 92 (1) (d), Article 92a and 92b of the Regulation, and beyond the own funds requirements imposed following the results of the review and evaluation, by means of the adjustment measures and the instructions for the holding of additional own funds to address the risk of excessive leverage and beyond the risk-based component of the minimum capital requirement and eligible liabilities under the financial market recovery and resolution law, expressed as a percentage of the overall exposure level referred to in Article 429 (4) of the Regulation, the following the review and evaluation of own funds requirements.
(a) in the first (lowest) interval of the required buffer to the leverage ratio, or higher than its lower limit and not higher than its upper limit, the multiplier factor is then equal to 0;
(b) in the second interval, the required buffer to the leverage ratio, or higher than its lower limit and not higher than its upper limit, then the multiplier factor is 0,2;
(c) in the third interval of the required buffer to the leverage ratio, or higher than its lower limit and not higher than its upper limit, the multiplier factor shall be 0,4;
(d) in the fourth interval of the required buffer to the leverage ratio, or higher than its lower limit, the multiplier is then equal to 0,6.
(4) The obliged entity shall calculate the lower and upper limits of each interval by relationship
DHQn = LB4 · Qn-1a
HHQn = LB4 · Qn
where
DHQn indicates the lower limit of each interval,
HHQn denotes the upper limit of each interval,
LB refers to the capital reserve to the leverage ratio to be maintained by the obliged entity, expressed in Czech crowns,
Qn denotes the serial number of the relevant interval and gets values 1, 2, 3 or 4.
(5) The obligor does not comply with the buffer requirement in relation to the leverage ratio, unless the Common Equity Tier 1 capital is at the same time sufficient to meet the requirement in Article 92 (1) (d) of the Regulation, Article 92a and 92b of the Regulation and the requirement in Article 92 (1a) of the Regulation and the own funds requirements imposed on the obligor following the results of the review and evaluation, by means of corrective measures and instructions for the holding of additional capital to address the risk of excessive leverage that is not adequately covered by the requirement in Article 92 (1) (d) of the Regulation.
(1) The restrictions provided for in Article 69b (1) concern only payments which would result in a reduction in Common Equity Tier 1 capital or a reduction in profits, provided that the deferral or non-execution of the payment does not constitute a default event or a condition for the opening of insolvency proceedings relating to the obligor concerned.
(2) If the obligor does not comply with the leverage ratio buffer and intends to make a payment of the maximum amount for the possible distribution related to the leverage ratio or part thereof, or to take any of the measures referred to in Article 69b (1) (b), he shall inform the Czech National Bank without undue delay and provide it with at least the information referred to in Article 69 (2), with the exception of point (a) (3), and shall communicate the maximum amount for the possible distribution related to the leverage ratio calculated in accordance with Article 69b (2).
(3) The obliged entity shall ensure that the highest amount can be quantified in order to allow for a possible allocation in relation to the leverage ratio and the impact of the measures envisaged under Article 69 (2) (d) on Common Equity Tier 1 capital or the level of profit for the current financial year and profit for the previous financial year, and is able to demonstrate to the Czech National Bank, upon request, the accuracy of that calculation. "
34. in Article 70 (a), the words "and, where appropriate, the buffer requirement to the leverage ratio" shall be inserted after the word "reserve."
35. in Part Three, the following Title III is inserted after Title II:
RULES FOR CALCULATION OF THE STRENGTH OF THE BALANCE OF A BANK OTHER THAN THE MEMBER STATE
(K § 12a (5) of the Banking Act)
(1) Capital for the purpose of calculating the leverage ratio of a branch of a bank from a non-Member State shall mean Tier 1 capital determined mutatis mutandis in accordance with Article 56 (2) to (4).
(2) The total exposure ratio for the purposes of calculating the leverage ratio of a bank branch from a non-Member State shall be determined by analogy with Articles 429 (4) to (8) and 429a to 429g of the Regulation. '
36. In Article 72, the words "the capital to be used means the eligible capital of a branch of a bank from a non-Member State pursuant to Article 71 'are deleted.
37. in Paragraph 73, at the end of point (b), the comma is replaced by a dot and point (c) is deleted;
38. In Article 74, the words "mutatis mutandis under Articles 404 to 409 of the Risk Regulation 'are replaced by the words" under Chapter 2 of Regulation (EU) 2017 / 2402 of the European Parliament and of the Council of 12 December 2017 establishing a general framework for securitisation and establishing a specific framework for simple, transparent and standardised securitisation and amending Directives 2009 / 65 / EC, 2009 / 138 / EC, 2011 / 61 / EU and Regulations (EC) No 1060 / 2009 and (EU) No 648 / 2012'.
39. In Article 79, the words "in Annex V, Part Two, paragraph 217, of Commission Implementing Regulation (EU) No 680 / 2014 of 16 April 2014 laying down implementing technical standards with regard to the reporting of institutions for supervisory purposes under Regulation (EU) No 575 / 2013 of the European Parliament and of the Council, as amended (" Implementing Regulation (EU) No 680 / 2014 ")" shall be replaced by the words "in Article 47a (1) of the Regulation."
40. In Section 81, the words "Annex V, Part 2, paragraphs 213 to 216 and 219 to 239 of Implementing Regulation (EU) No 680 / 2014 'are replaced by the words" Article 47a (3) to (7) of the Regulation'.
41. The heading of Part Five reads:
"DISCLOSURE
(Articles 11a (4) and 11b (7) of the Banking Act and 7b (7) of the Savings and Credit Cooperatives Act) '.
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Regulation Information
| Citation | Decree No. 354 / 2021 Coll., amending Decree No. 163 / 2014 Coll., on the pursuit of the activities of banks, savings and credit cooperatives and securities dealers, as amended by Decree No. 392 / 2017 Coll. |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.09.2021 |
|---|---|
| Effective from | 01.10.2021 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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