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Disclosure on asset encumbrance based on consistent definition and formats increases market discipline of institutions and allows the provision of transparent and harmonised information on the topic across EU Member States so as to enable market participants to compare the institutions in a clear and consistent manner.
These draft Regulatory Technical Standards (RTS) set out the data that is required to be disclosed on encumbered and unencumbered assets, the format, as well as the timing of the publication. The proposed requirements will disclose part of the data already reported through COREP on a continuous basis.
Since the ITS arising from this requirement entered into force in December 2014, the European Banking Authority (EBA) has gathered and analysed the reported data and in September 2015, issued an inaugural report on asset encumbrance where the need for the enhancements proposed through these RTS were identified.
These draft RTS are addressed to institutions and provide three disclosure templates to be completed and published, along with line-by-line instructions for completing them. Institutions will have to disclose information in accordance with these disclosure templates, and provide some additional information on the importance of encumbrance in their individual funding model.
Comments can be sent to the EBA by 25 July 2016. A public hearing will take place at the EBA premises on 1 June 2016 from 09:00 to 10:00 UK time.