The European Banking Authority (EBA) has published final guidelines on connected clients under Article 4(1)(39) of the Capital Requirements Regulation (CRR). The guidelines apply from 1 January 2019 and replace the ‘Guidelines on the implementation of the revised large exposures regime’ issued by the Committee of European Banking Supervisors on 11 December 2009.
The guidelines focus exclusively on the issue of connected clients under Article 4(1)(39) of the CRR and apply to all areas of that Regulation where the concept of connected clients is used, i.e. the large exposures regime (Part IV of the CRR), the categorisation of clients in the retail exposure class for the purposes of credit risk (Article 123(c) and Article 147(5)(a)(ii) of the CRR), the development and application of rating systems (Article 172(1)(d) of the CRR) and the SME supporting factor (Article 501(2)(c) of the CRR). The guidelines also apply to EBA technical standards and EBA guidelines that refer to ‘groups of connected clients’ as defined in Article 4(1)(39) of the CRR, namely in the area of liquidity reporting, where this concept is used in the specification of items requiring stable funding that must be reported to the competent authorities, and in the reporting of concentration of funding by counterparty and concentration of counterbalancing capacity by issuer/counterpart.
View EBA publishes final guidance on connected clients, 14 November 2017