Attachment

THE EEA JOINT COMMITTEE,

Having regard to the Agreement on the European Economic Area (‘the EEA Agreement’), and in particular Article 98 thereof,

Whereas:

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012^f1, as corrected by OJ L 208, 2.8.2013, p. 68, OJ L 321, 30.11.2013, p. 6 and OJ L 20, 25.1.2017, p. 2, is to be incorporated into the EEA Agreement.

Regulation (EU) 2017/2395 of the European Parliament and of the Council of 12 December 2017 amending Regulation (EU) No 575/2013 as regards transitional arrangements for mitigating the impact of the introduction of IFRS 9 on own funds and for the large exposures treatment of certain public sector exposures denominated in the domestic currency of any Member State^f2, is to be incorporated into the EEA Agreement.

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC^f3, as corrected by OJ L 208, 2.8.2013, p. 73 and OJ L 20, 25.1.2017, p. 1, is to be incorporated into the EEA Agreement.

Regulation (EU) No 575/2013 and Directive 2013/36/EU refer to ‘EU parent institutions’, ‘EU parent financial holding companies’ and ‘EU parent mixed financial holding companies’, which in the context of the EEA Agreement are understood as referring to entities fulfilling the relevant definitions set out in the Regulation that are established in an EEA Contracting Party and which are not subsidiaries of any other institution set up in any other EEA Contracting Party.

Directive 2013/36/EU repeals Directives 2006/48/EC^f4 and 2006/49/EC^f5 of the European Parliament and of the Council, which are incorporated into the EEA Agreement and which are consequently to be repealed under the EEA Agreement.

The potential for unwarranted reductions in own funds requirements from the use of internal models has, inter alia, been limited by national legislation implementing Article 152 of Directive 2006/48/EC, which, by the end of 2017 was replaced by Article 500 of Regulation (EU) 575/2013. There are, however, still several other provisions in Regulation (EU) 575/2013 and Directive 2013/36/EU which allow competent authorities to address the same issue, including the possibility for measures to counterbalance unwarranted reductions in the riskweighted exposure amounts, see for instance Article 104 of Directive 2013/36/EU, and to impose prudent margins of conservatism in the calibration of internal models, see for instance Article 144 of Regulation (EU) 575/2013 and Article 101 of Directive 2013/36/EU.

Annex IX to the EEA Agreement should therefore be amended accordingly,

HAS ADOPTED THIS DECISION: