Eligible Instruments

For third-country branches to fulfil the minimum capital endowment requirement referred to in Article 48e of Directive 2013/36/EU, the instruments referred to in paragraph 2 point (c) of that Article should at least comply with paragraphs 12 to 16.

The instruments referred to in paragraph 11 should have one of the following forms:

• a) Debt securities guaranteed by central governments of the European Union or the ESCB central banks;
• b) Debt securities issued or guaranteed by regional governments or local authorities of Member States provided that the conditions laid down in Article 115(2) of Reg-ulation (EU) No 575/2013 are met;
• c) Debt securities issued or guaranteed by central, regional or local governments or central banks of third countries which apply supervisory and regulatory arrange-ments at least equivalent to those applied in the European Union and that would receive a 0% risk weight under the standardised approach as a result of the appli-cation of Articles 114(7) and 115(4) of Regulation (EU) No 575/2013;
• d) Debt securities issued or guaranteed by public sector entities that would receive a 0% risk weight under the standardised approach as a result of the application of Article 116(4) of Regulation (EU) No 575/2013;
• e) Debt securities issued or guaranteed by the multilateral development banks listed in Article 117(2) of Regulation (EU) No 575/2013;
• f) Debt securities issued or guaranteed by international organisations listed in Arti-cle 118 of Regulation (EU) No 575/2013.

For the purposes of the instruments referred to in paragraph 12, point c), third-country branches should consider the currency of their own funding to determine if the capital endow-ment assets are denominated and funded in the domestic currency in accordance with Arti-cle 114(7) of the CRR, first subparagraph of Regulation (EU) No 575/2013.

The instruments referred to in paragraph 12 should be listed on a recognised exchange and be easily monetised at any time. 11

They should not be issued by the head undertaking of the third-country branch, by any of its subsidiaries or by a securitisation special purpose entity with which the head undertaking of the third-country branch has close links.

For the purposes of determining whether the minimum capital endowment requirement re-ferred to in Article 48e(1) of Directive 2013/36/EU is met, third-country branches should use the market value of the capital endowment assets. Third-country branches should be able to determine the market value of the instruments referred to in paragraph 12 on the basis of widely disseminated and easily available market prices, or, in the absence of such prices, on the basis of an easy-to-calculate formula that uses publicly available inputs and is not significantly dependent upon strong assumptions.