Article 42 | CRR | Regulation 575/2013

Article 42 - Regulation 575/2013 (CRR)

Article 42

Deduction of holdings of own Common Equity Tier 1 instruments

For the purposes of point (f) of Article 36(1), institutions shall calculate holdings of own Common Equity Tier 1 instruments on the basis of gross long positions subject to the following exceptions:

(a)

institutions may calculate the amount of holdings of own Common Equity Tier 1 instruments on the basis of the net long position provided that both the following conditions are met:

(i)	the long and short positions are in the same underlying exposure and the short positions involve no counterparty risk;

(ii)	either both the long and the short positions are held in the trading book or both are held in the non-trading book;

(b)	institutions shall determine the amount to be deducted for direct, indirect and synthetic holdings of index securities by calculating the underlying exposure to own Common Equity Tier 1 instruments included in those indices;

(c)

institutions may net gross long positions in own Common Equity Tier 1 instruments resulting from holdings of index securities against short positions in own Common Equity Tier 1 instruments resulting from short positions in the underlying indices, including where those short positions involve counterparty risk, provided that both the following conditions are met:

(i)	the long and short positions are in the same underlying indices;

(ii)	either both the long and the short positions are held in the trading book or both are held in the non-trading book.

PART ONE - GENERAL PROVISIONS (Article 1-24)

PART TWO - OWN FUNDS (Article 25-91)

TITLE I - ELEMENTS OF OWN FUNDS (Article 25-80)

CHAPTER 1 - Tier 1 capital (Article 25)

CHAPTER 2 - Common Equity Tier 1 capital (Article 26-50)

Section 1 - Common equity tier 1 items and instruments (Article 26-31)

Section 2 - Prudential filters (Article 32-35)

Section 3 - Deductions from common equity tier 1 items, exemptions and alternatives (Article 36-49)

Sub-Section 1 - Deductions from Common Equity Tier 1 items (Article 36-47)Article 36 - Deductions from Common Equity Tier 1 items RTSQ&AGL Article 37 - Deduction of intangible assets Q&A Article 38 - Deduction of deferred tax assets that rely on future profitability Q&A Article 39 - Tax overpayments, tax loss carry backs and deferred tax assets that do not rely on future profitability Q&A Article 40 - Deduction of negative amounts resulting from the calculation of expected loss amounts Article 41 - Deduction of defined benefit pension fund assets RTSQ&A Article 42 - Deduction of holdings of own Common Equity Tier 1 instruments Q&A Article 43 - Significant investment in a financial sector entity Article 44 - Deduction of holdings of Common Equity Tier 1 instruments of financial sector entities and where an institution has a reciprocal cross holding designed artificially to inflate own funds Article 45 - Deduction of holdings of Common Equity Tier 1 instruments of financial sector entities Q&A Article 46 - Deduction of holdings of Common Equity Tier 1 instruments where an institution does not have a significant investment in a financial sector entity Q&A Article 47 - Deduction of holdings of Common Equity Tier 1 instruments where an institution has a significant investment in a financial sector entity Q&A

Sub-Section 2 - Exemptions from and alternatives to deduction from Common Equity Tier 1 items (Article 48-49)

Section 4 - Common equity tier 1 capital (Article 50)

CHAPTER 3 - Additional Tier 1 capital (Article 51-61)

CHAPTER 4 - Tier 2 capital (Article 62-71)

CHAPTER 5 - Own funds (Article 72)

CHAPTER 6 - General requirements (Article 73-80)

TITLE II - MINORITY INTEREST AND ADDITIONAL TIER 1 AND TIER 2 INSTRUMENTS ISSUED BY SUBSIDIARIES (Article 81-88)

TITLE III - QUALIFYING HOLDINGS OUTSIDE THE FINANCIAL SECTOR (Article 89-91)

PART THREE - CAPITAL REQUIREMENTS (Article 92-386)

PART FOUR - LARGE EXPOSURES (Article 387-403)

PART FIVE - EXPOSURES TO TRANSFERRED CREDIT RISK (Article 404-410)

PART SIX - LIQUIDITY (Article 411-428)

PART SEVEN - LEVERAGE (Article 429-430)

PART EIGHT - DISCLOSURE BY INSTITUTIONS (Article 431-455)

PART NINE - DELEGATED AND IMPLEMENTING ACTS (Article 456-464)

PART TEN - TRANSITIONAL PROVISIONS, REPORTS, REVIEWS AND AMENDMENTS (Article 465-520)

PART ELEVEN - FINAL PROVISIONS (Article 521)

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Article 42 - Regulation 575/2013 (CRR)

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