What changed between the plenary report and the adopted text

Removed:– ▌the lending institution is able to take control of the obligor entity in case of a default event;

Removed:(iii) 100 % where the project to which the exposure is related is in the operational phase and the exposure does not meet the conditions laid down in point (ii) of this subparagraph;

Removed:(d) for the purposes of point (c)(ii), third indent, the cash flows generated shall not be considered predictable unless a substantial part of the revenues satisfies one or more of the following conditions:

Removed:(i) the revenues are availability-based;

Removed:(ii) the revenues are subject to a rate-of-return regulation;

Removed:(iii) the revenues are subject to a take-or-pay contract;

Removed:(e) for the purposes of point (c), the operational phase shall mean the phase in which the entity that was specifically created to finance the project, or that is economically comparable, meets both of the following conditions:

Removed:(i) the entity has a positive net cash flow that is sufficient to cover any remaining contractual obligation;

Removed:(ii) the entity has a declining long term debt.

Removed:4. EBA shall develop draft regulatory technical standards specifying in further detail the conditions under which the criteria set out in paragraph 3, point (a)(i) and point (c)(ii), are met.

Removed:EBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 1 year after the date of entry into force of this Regulation].

Removed:Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed:(42) Article 123 is replaced by the following:

Removed:‘Article 123 Retail exposures

Removed:1. Exposures that comply with all of the following criteria shall be considered retail exposures:

Removed:(a) the exposure is an exposure to one or more natural persons or an exposure to a SME within the meaning of Article 5, point (8);

Removed:(aa) the total amount owed to the institution, its parent undertakings and its subsidiaries, by the obligor or group of connected clients, including any exposure in default but excluding exposures secured by residential property up to the property value shall not, to the knowledge of the institution, which shall take reasonable steps to confirm the situation, exceed EUR 1 million;

Removed:(b) the exposure represents one of a significant number of exposures with similar characteristics, such that the risks associated with such exposure are substantially reduced;

Removed:(c) the institution concerned treats the exposure in its risk management framework and manages the exposure internally as retail exposure consistently over time and in a manner that is similar to the treatment by the institution of other retail exposures.

Removed:The present value of retail minimum lease payments shall be eligible for the retail exposure class.

Removed:EBA shall issue guidelines, in accordance with Article 16 of Regulation (EU) No 1093/2010, to specify proportionate diversification methods under which an exposure is to be considered as one of a significant number of similar exposures as specified in point (b), by [OP please insert the date = 1 year after entry into force of this Regulation].

Removed:Where any of these criteria are not met for an exposure to one or more natural persons, the exposure shall be considered retail exposure and the risk weight shall be 100%.

Removed:2. The following exposures shall not be considered to be retail exposures:

Removed:(a) non-debt exposures conveying a subordinated, residual claim on the assets or income of the issuer;

Removed:(b) debt exposures and other securities, partnerships, derivatives, or other vehicles, the economic substance of which is similar to the exposures specified in point (a);

Removed:(c) all other exposures in the form of securities.

Removed:3. Retail exposures as referred to in paragraph 1 shall be assigned a risk weight of 75 %, with the exception of transactor exposures, which shall be assigned a risk weight of 45 %.

Removed:4. By way of derogation from paragraph 3, exposures due to loans granted by an institution to pensioners or employees with a permanent contract against the unconditional transfer of part of the borrower’s pension or salary to that institution shall be assigned a risk weight of 35 %, provided that all the following conditions are met:

Removed:(a) to repay the loan, the borrower unconditionally authorises the pension fund or employer to make direct payments to the institution by deducting the monthly payments on the loan from the borrower’s monthly pension or salary;

Removed:(b) the risks of death, inability to work, unemployment or reduction of the net monthly pension or salary of the borrower are properly covered through an insurance policy to the benefit of the institution;

Removed:(c) the monthly payments to be made by the borrower on all loans that meet the conditions set out in points (a) and (b) do not in aggregate exceed 20 % of the borrower’s net monthly pension or salary;

Removed:(d) the maximum original maturity of the loan is equal to or less than ten years.’;

Removed:(43) the following Article 123a is inserted:

Removed:‘Article 123a Exposures with a currency mismatch

Removed:1. Where the following conditions are met for an exposure to natural person or for an exposure to natural persons which is assigned to ▌the exposure classes laid down in point (h) ▌of Article 112 or, if it is secured by residential immovable property, to the exposure class laid down in point (i) of Article 112, the risk weight assigned to such exposure in accordance with Chapter 2 shall be multiplied by a factor of 1,5, whereby the resulting risk weight shall not be higher than 150 %, where the following conditions are met:

Removed:(a) the exposure is ▌a loan denominated in a currency which is different from the currency of the obligor's source of income;

Removed:(b) the obligor does not have a hedge for its payment risk due to the currency mismatch, either by a financial instrument or foreign currency income that matches the currency of the exposure, or the total of such hedges available to the borrower cover less than 90 % of any instalment for this exposure.

Removed:Where an institution is unable to single out those exposures with a currency mismatch, the risk weight multiplier of 1,5 shall apply to all unhedged exposures where the currency of the exposures is different from the domestic currency of the country of residence of the obligor.

Removed:2. For the purposes of this Article, source of income refers to any source that generates cash flows to the obligor, including from remittances, rental incomes or salaries, whilst excluding proceeds from selling assets or similar recourse actions by the institution.’;

Removed:(44) Article 124 is replaced by the following:

Removed:‘Article 124 Exposures secured by mortgages on immovable property

Removed:1. A non-ADC exposure that does not meet all of the conditions laid down in paragraph 3 shall be treated as follows:

Removed:(a) a non-IPRE exposure shall be treated as an exposure not secured by the immovable property concerned;

Removed:(b) an IPRE exposure shall be risk-weighted at 150 %.

Removed:2. A non-ADC exposure secured by an immovable property, where all of the conditions laid down in paragraph 3 are met▌, shall be treated as follows:

Removed:(a) where the exposure is secured by a non-IPRE residential property or is secured by a IPRE residential property that meets any of the following conditions, the exposure shall not qualify as an IPRE exposure and shall be treated in accordance with Article 125(1) where the exposure meets any of the following conditions:

Removed:(i) the income-producing immovable property securing the exposure is the obligor’s primary residence, either where the immovable property as a whole constitutes a single housing unit or where the immovable property securing the exposure is a housing unit that is a separated part within an immovable property;

Removed:(ii) the exposure is to a natural person and is secured by an income-producing residential housing unit, either where the immovable property as a whole constitutes a single housing unit or where the housing unit is a separated part within the immovable property, and total exposures of the institution to that natural person are not secured by more than four immovable properties, including those which are not residential properties or which do not meet any of the criteria in this point, or separate housing units within immovable properties;

Removed:(iii) the exposure secured by an income-producing residential property is to associations or cooperatives of natural persons that are regulated by law and solely exist to grant their members the use of a primary residence in the property securing the loans;

Removed:(iv) the exposure is secured by an income producing residential property to public housing companies or not-for-profit associations that are regulated by law and exist to serve social purposes and to offer tenants long-term housing;

Removed:(b) where the exposure is secured by residential property and either an IPRE exposure or the exposure does not meet any of the conditions laid down in point (a), points (i) to (iv), the exposure shall be treated in accordance with Article 125(2);

Removed:(c) where the exposure is secured by a commercial immovable property, the exposure shall be treated as follows:

Removed:(i) a non-IPRE exposure shall be treated in accordance with Article 126(1);

Removed:(ii) an IPRE exposure shall be treated in accordance with Article 126(2).

Removed:3. In order to be eligible for the treatment laid down in Article 125(1), point (a), or Article 126(1), point (a), an exposure secured by an immovable property shall fulfil all of the following conditions:

Removed:(a) the immovable property securing the exposure meets any of the following conditions:

Removed:(i) the immovable property has been fully completed;

Removed:(ii) the immovable property is forest or agricultural land;

Removed:(iii) the lending is to a natural person and the immovable property is either a residential property under construction or it is land upon which a residential property is planned to be constructed where that plan has been legally approved by all relevant authorities, as applicable, concerned and where any of the following conditions is met:

Removed:– the property does not have more than four residential housing units and will be the primary residence of the obligor and the lending to the natural person is not indirectly financing ADC exposures;