AI Summary of Article 74 Holdings of capital instruments issued by regulated financial sector entities that do not qualify as regulatory capital
This provision stipulates that regulated financial institutions are prohibited from deducting any direct, indirect, or synthetic holdings of capital instruments issued by other regulated entities from their own funds, provided these instruments do not qualify as regulatory capital.
Further, institutions are mandated to apply risk weights to such holdings, adhering to the criteria outlined in Part Three, Title II, Chapter 2. This approach ensures that the assessment of risk and capital adequacy remains consistent and aligned with regulatory expectations in the financial sector.
Article 74 Holdings of capital instruments issued by regulated financial sector entities that do not qualify as regulatory capital
Institutions shall not deduct from any element of own funds direct, indirect or synthetic holdings of capital instruments issued by a regulated financial sector entity that do not qualify as regulatory capital of that entity. Institutions shall apply risk weights to such holdings in accordance with Part Three, Title II, Chapter 2.