4.4 Ensuring compliance with the large exposure limits of Article 395(1) of Regulation (EU) No 575/2013

Institutions should ensure that the use of the alternative treatment does not lead to a breach of the large exposure limits set out in Article 395(1) of Regulation (EU) No 575/2013.

Where a breach of the specified limits has occurred, the tri-party agent should inform the institution immediately of:

• a) the name of the collateral issuer in relation with which the breach has occurred;
• b) the ISIN or security code of the securities received as collateral; WITH REGARD TO ‘TRI-PARTY REPURCHASE TRANSACTIONS’ AS SPECIFIED IN ARTICLE 403(3) CRR
• c) the market value of the collateral received;
• d) the date when the breach occurred;
• e) the remedial action adopted by the tri-party agent; and
• f) the timeframe within which the breach has been or is expected to be remedied.

The institution’s management body should be informed without undue delay of any breaches of the specified limits on the securities by a collateral issuer and its likely impact on compliance with the large exposure limits of Article 395(1) of Regulation (EU) No 575/2013 with respect to the same collateral issuer.

Without prejudice to the actions by the tri-party agent to remedy any breach of the specified limits, institutions should also have in place appropriate action plans to deal with breaches of the specified limits to ensure that the large exposure limit of Article 395(1) of Regulation (EU) No 575/2013 to a given collateral issuer is complied with at all times.