AI Summary of Article 72j Trading book exception from deductions from eligible liabilities items
This provision outlines the conditions under which institutions may opt not to deduct certain eligible liabilities instruments from their Common Equity Tier 1 items. Specifically, if the aggregate holdings, measured on a gross long basis, are equal to or less than 5% of the Common Equity Tier 1 items, and the holdings are confined to the trading book for a maximum of 30 business days, institutions can retain these amounts.
Furthermore, amounts not deducted will still be subject to the own funds requirements relevant to trading book items. Should the specified conditions no longer apply, the holdings must be deducted in line with Article 72g, with no exceptions permitted from Articles 72h and 72i.
Article 72j Trading book exception from deductions from eligible liabilities items
1. Institutions may decide not to deduct a designated part of their direct, indirect and synthetic holdings of eligible liabilities instruments, that in aggregate and measured on a gross long basis is equal to or less than 5 % of the Common Equity Tier 1 items of the institution after applying Articles 32 to 36, provided that all the following conditions are met:
(a) the holdings are in the trading book;
(b) the eligible liabilities instruments are held for no longer than 30 business days.
2. The amounts of the items that are not deducted pursuant to paragraph 1 shall be subject to own funds requirements for items in the trading book.
3. Where, in the case of holdings not deducted in accordance with paragraph 1, the conditions set out in that paragraph cease to be met, the holdings shall be deducted in accordance with Article 72g without applying the exceptions laid down in Articles 72h and 72i.