QA2017-71 - Guidance T04.00
Atribute | Detail |
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Resolution Reporting Subject Matter | Guidance |
Guidance Documents | - |
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Unique Identifier |
QA2017-71 |
Question
What should be the correct interpretation of the early reimbursement date for securities:
a. Minimum of (call option date, put option date, Legal maturity date);
b. Minimum of (put option date, Legal maturity date)
Taking into consideration that call option date is the bank´s right to reimburse this should not be taken into consideration in definition of the early reimbursement date?
According to BRRD: “where a liability confers upon its OWNER a right to early reimbursement, the maturity of that liability shall be the first date where such a right arises”
According to Guidance on the Liability Data Report: “If an option exists for the HOLDERS of the instrument to request early reimbursement, or conditions for early reimbursement are contractually foreseen, the earliest occurrence date should be completed”
Which interpretation is correct?
Response
A call option for the reporting and issuing entity shall not be taken into consideration for determining the earliest redemption date. Only where the instrument holders can exercise the right are such options to be considered. However, if contractually fixed conditions are foreseen that cannot be controlled by the insitution, such early redemption dates need to be considered as well to determine the earliest redemption date.
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