Question ID: 2289
Regulation Reference: Guidelines on classification of own funds
Topic: Own Funds (OF)
Article: Article 308b(9)(10) of SII Directive
Status: Final
Date of submission: 11 May 2021
Question
How will a change from one interbank lending rate (IBOR) to an alternate reference rate affect an own-fund item classified under transitional measures (Article 308b (9) and (10) in the SII Directive)? In particular, given the Guideline 27 of the Guidelines on classification of own funds, should such change from STIBOR into SWESTR in the terms and conditions for subordinated debts be considered as a major change with the consequence that the subordinated debt has to comply with the requirements for classification in accordance with SII?
EIOPA answer
The following refers to basic own-fund items that have been included in Tier 1 respectively Tier 2 basic own funds based on Article 308b(9) and (10) Solvency II.
Guideline 27 should be interpreted in such way that: changes in the terms and conditions of these items that are strictly necessary to incorporate the transition from an interbank lending rate (IBOR) to another reference rate where the transition results from the discontinuance of the former, should not lead to the loss of the transitional status.
This applies also for a change from STIBOR to SWESTR.