AI Summary of Article 72c Amortisation of eligible liabilities instruments
This document outlines the criteria for classifying eligible liabilities instruments based on their residual maturity. Instruments with a residual maturity of at least one year are deemed fully eligible, whereas those with less than one year do not qualify.
Additionally, the determination of maturity is nuanced; if an instrument grants the holder or issuer redemption options prior to maturity, the earliest exercise date defines its maturity. Conversely, if redemption options exist solely at the issuer's discretion without any incentivisation to redeem early, the original stated maturity prevails.
Article 72c Amortisation of eligible liabilities instruments
1. Eligible liabilities instruments with a residual maturity of at least one year shall fully qualify as eligible liabilities items.
Eligible liabilities instruments with a residual maturity of less than one year shall not qualify as eligible liabilities items.
2. For the purposes of paragraph 1, where a eligible liabilities instrument includes a holder redemption option exercisable prior to the original stated maturity of the instrument, the maturity of the instrument shall be defined as the earliest possible date on which the holder can exercise the redemption option and request redemption or repayment of the instrument.
3. For the purposes of paragraph 1, where an eligible liabilities instrument includes an incentive for the issuer to call, redeem, repay or repurchase the instrument prior to the original stated maturity of the instrument, the maturity of the instrument shall be defined as the earliest possible date on which the issuer can exercise that option and request redemption or repayment of the instrument.