Commission Delegated Regulation (EU) 2017/390 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on certain prudential requirements for central securities depositories and designated credit institutions offering banking-type ancillary services (Text with EEA relevance)

For the purposes of Article 47(1) of Regulation (EU) No 909/2014, a central securities depository (‘CSD’) shall hold at all times, together with retained earnings and reserves, the amount of capital specified in Article 3 of this Regulation.

The capital requirements referred to in Article 3 shall be met with capital instruments that meet the conditions set out in Article 2 of this Regulation.

For the purposes of Article 1, a CSD shall hold capital instruments that meet all of the following conditions:

1. they are subscribed capital within the meaning of Article 22 of Council Directive 86/635/EEC⁽¹⁾;

2. they have been paid up, including the related share premium accounts;

3. they fully absorb losses in going concern situations;

4. in the event of bankruptcy or liquidation, they rank after all other claims in insolvency actions or under the applicable insolvency law.

In addition to the capital instruments that meet the conditions in paragraph 1, a CSD authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 to provide banking-type ancillary services may, in order to meet the requirements in Article 1, use capital instruments that:

1. meet the conditions in paragraph 1;

2. are ‘own funds instruments’ as defined in point 119 of Article 4(1) of Regulation (EU) No 575/2013;

3. are subject to the provisions of Regulation (EU) No 575/2013.

A CSD shall hold capital, together with retained earnings and reserves, which shall be at all times more than or equal to the sum of:

1. the CSD's capital requirements for operational, legal and custody risks, referred to in point (a) of Article 47(1) of Regulation (EU) No 909/2014, calculated in accordance with Article 4;

2. the CSD's capital requirements for investment risks, referred to in point (a) of Article 47(1) of Regulation (EU) No 909/2014, calculated in accordance with Article 5;

3. the CSD's capital requirements for business risks, referred to in point (a) of Article 47(1) of Regulation (EU) No 909/2014, calculated in accordance with Article 6;

4. the CSD's capital requirements for winding-down or restructuring its activities, referred to in point (b) of Article 47(1) of Regulation (EU) No 909/2014, calculated in accordance with Article 7.

A CSD shall have procedures in place to identify all sources of the risks referred to in paragraph 1.

A CSD authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 to provide banking-type ancillary services and with permission to use the Advanced Measurement Approaches (‘AMA’) referred to in Articles 321 to 324 of Regulation (EU) No 575/2013, shall calculate its capital requirements for operational, legal and custody risks in accordance with Articles 231 to 234 of Regulation (EU) No 575/2013.

A CSD authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 to provide banking-type ancillary services and using the Standardised Approach for operational risk as referred to in Articles 317 to 320 of Regulation (EU) No 575/2013, shall calculate its capital requirements for operational, legal and custody risks in accordance with the provisions of that Regulation applicable to the Standardised Approach for operational risk referred to in Articles 317 to 320 thereof.

A CSD that satisfies any the following conditions shall calculate its capital requirements for operational, legal and custody risks in accordance with the provisions of the Basic Indicator Approach referred to in Articles 315 and 316 of Regulation (EU) No 575/2013:

1. A CSD that is not authorised in accordance with Article 54(2) of Regulation (EU) No 909/2014;

2. a CSD that is authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 but which does not have permission to use the AMA referred to in Articles 321 to 324 of Regulation (EU) No 575/2013;

3. A CSD that is authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 but which does not have permission to use the Standardised approach referred to in Articles 317 to 320 of Regulation (EU) No 575/2013.