What changed between the draft committee report and the plenary report

Added:(ii) specialised lending (‘SL’) exposures;

Added:(iii) corporate purchased receivables;

Added:(d) retail exposures ▌shall be assigned to the following exposure classes:

Added:(i) qualifying revolving retail exposures (‘QRREs’);

Added:(ii) retail exposures secured by residential property;

Added:(iii) retail purchased receivables;

Added:(iv) other retail exposures;

Added:(e) equity exposures;

Added:(e1) exposures in the form of units or shares in a CIU;

Added:(f) items representing securitisation positions;

Added:(g) other non credit-obligation assets.

Added:(b) in paragraph 3, point (a) is deleted;

Added:(c) the following paragraph 3a is inserted:

Added:‘3a. Exposures to regional governments, local authorities or public sector entities shall ▌be assigned to the exposure classes referred to in paragraph 2, point (a1)(i) or (a1)(ii), respectively unless they are treated as exposures to the central government according to Articles 115 or 116. Exposures treated as exposures to central governments according to Articles 115 or 116 shall be assigned to the exposure class referred to in paragraph 2, point (a).’;

Added:(d) in paragraph 4, points (a) and (b) are deleted;

Added:(e) paragraph 5 is amended as follows:

Added:(i) in point (a), point (ii) is replaced by the following:

Added:‘(ii) exposures to an SME within the meaning of Article 5, point (8), provided in that case that the total amount owed to the institution and parent undertakings and its subsidiaries, including any exposure in default, by the obligor client or group of connected clients, but excluding exposures secured by residential property up to the property value does not, to the knowledge of the institution, ▌which shall take reasonable steps to verify the amount of that exposure exceed EUR 1 million;

Added:(iii) exposures secured by residential property, including first and subsequent liens, term loans, revolving home equity lines of credit, and exposures as referred to in Article 108, paragraphs 3 and 4, regardless of the exposure size, provided that the exposure is either of the following:

Added:– an exposure to a natural person;

Added:– an exposure to associations or cooperatives of individuals that are regulated under national law and exist with the only purpose of granting their members the use of a primary residence in the property securing the loan;’;

Added:(ii) the following subparagraphs are added:

Added:‘Exposures fulfilling all the conditions laid down in points (a)(iii), (b), (c), (d) shall be assigned to the exposure class ‘retail exposures secured by residential property’ as referred to in paragraph 2, point (d)(ii).

Added:By way of derogation from the third subparagraph, competent authorities may exclude from the exposure class ‘retail exposures secured by residential property’ as referred to in paragraph 2, point (d)(ii), loans to natural persons who have mortgaged more than four properties or housing units and assign those loans to the corporate exposure class.’;

Added:(iii) the following paragraph 5a is inserted:

Added:‘5a. Retail exposures belonging to a type of exposures meeting all the following conditions shall be assigned to the QRRE exposure class:

Added:(a) the exposures of that type of exposures are to one or more natural persons;

Added:(b) the exposures of that type of exposures are revolving, unsecured, and to the extent they are not drawn immediately and unconditionally, cancellable by the institution;

Added:(c) the maximum exposure of that type of exposure to a natural person is EUR 100 000▌;

Added:(d) that type of exposures has exhibited low volatility of loss rates, relative to its average level of loss rates, especially within the low PD bands;

Added:(e) the treatment of exposures assigned to that type of exposures as a qualifying revolving retail exposure is consistent with the underlying risk characteristics of that type of exposures▌.

Added:By way of derogation from point (b), the requirement to be unsecured shall not apply in respect of collateralised credit facilities linked to a wage account. In that case, amounts recovered from the collateral shall not be taken into account in the LGD estimate.

Added:Institutions shall identify within the QRRE exposure class transactor exposures (‘QRRE transactors’), as defined in Article 4(1), point (152), and exposures that are not transactor exposures (‘QRRE revolvers’). In particular, QRREs with less than 12 months of repayment history shall be identified as QRRE revolvers.’;

Added:(f) paragraphs 6 and 7 are replaced by the following:

Added:‘6. Unless they are assigned to the exposure class laid down in paragraph 2, point (e1), the exposures referred to in Article 133, paragraph 1 shall be assigned to the equity exposure class laid down in paragraph 2, point (e).

Added:7. Any credit obligation not assigned to the exposure classes laid down in paragraph 2, points (a), (a1), (b), (d), (e) and (f), shall be assigned to one of the exposure classes referred to in point (c) of that paragraph.’;

Added:(g) in paragraph 8, the following subparagraphs are added:

Added:‘Those exposures shall be assigned to the exposure class referred to in paragraph 2, point (c)(ii), and shall be distributed into the following categories: ‘project finance’ (PF), ‘object finance’ (OF), ‘commodity finance’ (CF) and ‘income producing real estate’ (IPRE).

Added:EBA shall develop draft regulatory technical standards to specify the following:

Added:(a) the categorisation to PF, OF and CF, consistently with the definitions of Chapter 2;

Added:(b) the determination of the IPRE category, in particular providing which ADC exposures and exposures secured by immovable property, may or shall be categorised as IPRE, where those exposures do not materially depend on cash flows generated by the property for their repayment.

Added:EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2025.

Added: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.’;

Added:(h) a new paragraph 11 is added:

Added:‘11. EBA shall develop draft regulatory technical standards specifying further the exposure classes referred to in paragraph 2 where necessary▌.

Added:EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2026.

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

Added:(62) Article 148 is amended as follows:

Added:(a) paragraphs 1 and 2 are replaced by the following:

Added:‘1. An institution that is permitted to apply the IRB Approach in accordance with Article 107(1), shall, together with any parent undertaking and its subsidiaries, implement the IRB Approach for at least one of the exposure classes referred to in points (a), (a1)(i), (a1)(ii), (b), (c)(i), (c)(ii), (c)(iii), (d)(i), (d)(ii), d(iii), (d)(iv), (e1), ▌and (g) of Article 147(2). Once an institution has implemented the IRB Approach for a certain exposure class, it shall do so for all the exposures within that exposure class, unless it has received the permission of the competent authorities to use the Standardised Approach permanently in accordance with Article 150.

Added:Subject to the prior permission of the competent authorities, implementation of the IRB Approach may be carried out sequentially across the different types of exposures within a certain exposure class or business unit, or across different business units in the same group, or for the use of own estimates of LGDs or the use of IRB-CCFs.

Added:2. Competent authorities shall determine the time period over which an institution and any parent undertaking and its subsidiaries shall be required to implement the IRB Approach for all exposures within a certain exposure class across different types of exposures within the same business unit, across different business units in the same group or for the use of own estimates of LGDs or the use of IRB-CCF as applicable. That time period shall be one that competent authorities consider to be appropriate on the basis of the nature and scale of the activities of the institution concerned, or any parent undertaking and its subsidiaries, and the number and nature of rating systems to be implemented.’;

Added:(aa) paragraph 3 is replaced by the following:

Added:‘3. Institutions shall carry out implementation of the IRB Approach in accordance with conditions determined by the competent authorities. The competent authority shall design those conditions in a way that they ensure that the flexibility under paragraph 1 is not used selectively for the purpose of achieving reduced own funds requirements in respect of those types of exposures or business units that are yet to be included in the IRB Approach or in the use of own estimates of LGDs or the use of IRB-CCF.’;

Added:(b) paragraphs 4, 5 and 6 are deleted;

Added:(63) Article 150 is amended as follows:

Added:(a) paragraph 1 is replaced by the following:

Added:‘1. Institutions shall apply the Standardised Approach for all the following exposures:

Added:(a) exposures assigned to the equity exposure class referred to in Article 147(2), point (e);

Added:▌