QA2018-127 - Maturity T01.00; T03.01 - T08.00

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Feb 01, 2024
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QA2018-127

Question


How shall the maturity be reported for instruments where there is no right for the holder to request an anticipated reimbursement, yet the possibility of early reimbursement exists and it is based on external events (e.g. a stock index exceeds a predetermined value)?


Response


In line with the principle of MREL that eligible liabilities should have a remaining maturity of at least one year, a liability that has early redemption clauses which could lead to a remaining maturity of less than one year should not qualify. Where such clauses cannot be influenced by the institution and depend on external factors as indicated in the example, the earliest redemption date should be indicated as overnight/next business day.