Explanatory Memorandum to COM(2018)94 - Issue of covered bonds and covered bond public supervision - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)94 - Issue of covered bonds and covered bond public supervision. |
|---|---|
| source | COM(2018)94  |
| date | 12-03-2018 |
1. CONTEXTOFTHEPROPOSAL
• Reasons for and objectives of the proposal
The Commission has today adopted a package of measures to deepen the Capital Markets Union, together with the Communication "Completing Capital Markets Union by 2019 – time to accelerate delivery". The package includes this proposal, as well as a proposal to facilitate the cross-border distribution of investment funds, a proposal on the law applicable to the third-party effects of assignments of claims and a Communication on the applicable law to the proprietary effects of transactions in securities.
Covered bonds are debt obligations issued by credit institutions and secured against a ring-fenced pool of assets to which bondholders have direct recourse as preferred creditors. At the same time, bondholders remain entitled to claim against the issuing entity as ordinary creditors. This double claim against the cover pool and the issuer is referred to as the ‘dual recourse’ mechanism.
Covered bonds are issued by credit institutions and are as such an important and efficient source of funding for European banks. They facilitate the financing of mortgage and public sector loans, thereby supporting lending more broadly. A significant advantage of covered bonds compared with other kinds of bank funding sources such as asset-backed securities is the fact that banks retain the risk on their balance sheets and investors have claims directly with the bank. Therefore, covered bonds allow banks to lend not only more, but also more safely. Not least for that reason, covered bonds fared well during the financial crisis compared with other funding instruments. They proved to be a reliable and stable funding source for European banks at a time when other funding channels were drying up.
An enabling framework for covered bonds at EU level would enhance their use as a stable and cost-effective source of funding for credit institutions, especially where markets are less developed, in order to help finance the real economy in line with the objectives of the Capital Markets Union (CMU). The enabling framework would also provide investors with a wider and safer range of investment opportunities and would help preserve financial stability. Member States will have to transpose these rules, ensuring that national covered bond frameworks comply with the principles-based requirements set out in this proposal. All covered bonds across Europe will therefore have to respect the minimum harmonisation requirements as set out in this proposal.
The enabling framework for covered bonds is featured in the Commission Work Programme for 20181. In the letter of intent following up his latest State of the Union speech, the President of the European Commission confirmed that an enabling framework for covered bonds should be launched or completed by end-2018 to ensure a deeper and fairer internal market.2 The Commission confirmed this intention in the Mid-Term Review of the CMU Action Plan of June 20173.
The development of covered bonds across the single market is uneven; they are very important in some Member States, less so in others. Furthermore, they are only partially addressed in Union law. While they benefit from preferential prudential and regulatory
1 COM(2017) 650.
2 European Commission (2017). "State of the Union 2017: Letter of intent to President Antonio Tajani
and to Prime Minister Jüri Ratas".
3
treatment in various respects in the light of the lower risks (e.g. banks investing in them do not have to set aside as much regulatory capital as when they invest in other assets), Union law does not comprehensively address what actually constitutes a covered bond. Rather, preferential treatments are granted to covered bonds as defined in Directive 2009/65/EC4. However, that definition was drafted with a specific purpose in mind – limiting what undertakings for collective investment in transferable securities (UCITS) could invest in – and is not fit for the broader policy objectives of the CMU.
A Union legislative framework on covered bonds should expand the capacity of credit institutions to provide financing to the real economy and contribute to the development of covered bonds across the Union, particularly in Member States where no market for them currently exists.
The framework would also increase cross-border flows of capital and investment. It would thus contribute to the CMU and in particular to the further leveraging of credit institution's capacity to support the wider economy. In particular, it would ensure that banks have a broad range of safe and efficient funding tools at their disposal.
The framework consists of a Directive and a Regulation – the two instruments should be seen as a single package.
This proposed Directive will specify the core elements of covered bonds and provide a common definition as a consistent and sufficiently detailed point of reference for prudential regulation purposes, applicable across financial sectors. It will establish the structural features of the instrument, a covered bond specific public supervision, rules allowing use of the ‘European Covered Bonds’ label and competent authorities’ publication obligations in the field of covered bonds.
The proposed Regulation will mainly amend Article 129 of Regulation (EU) No 575/2013 (Capital Requirements Regulation (CRR)). The amendments build on the current prudential treatment but add requirements on minimum overcollateralisation and substitution assets. They would strengthen the requirements for covered bonds being granted preferential capital treatment.
Consistency
with existing policy provisions in the policy area
The proposal is part of ongoing work to ensure that covered bonds are of sufficient quality to justify their continuing preferential treatment.
It builds on ongoing work by the European Banking Authority (EBA) to identify best practices as regards the issuance of covered bonds5. That work is a response to the European Systemic Risk Board (ESRB) recommendation that best practices be identified and monitored so as to ensure robust and consistent frameworks for covered bonds across the Union6.
coordination of laws, regulations and administrative provisions relating to undertakings for collective
investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).
Report on EU covered bond frameworks and capital treatment, EBA (2014);
Report on covered bonds — recommendations on harmonisation of covered bond frameworks in the
EU, EBA (2016).
4
5
6
• Consistency with other Union policies
One of the Commission’s most important objectives is to stimulate investment and create jobs. The Commission has launched a number of initiatives to ensure that the financial system contributes fully in that respect. First among those is the CMU, which involves a series of initiatives to unlock funding for Europe’s growth. Covered bonds should be seen in the context of the CMU, as bank financing is currently by far the most important funding channel in Europe and one of the CMU actions is to leverage banking capacity further in support of the wider economy. Covered bonds represent an efficient and stable funding tool for European banks. A legislative framework to harmonise covered bonds should be seen in this broader policy context.
Another important Commission objective in the realm of financial markets is to ensure that capital requirements for banks reflect the risks attached to the assets in their balance sheets. Accordingly, the CRR requirements ensure that covered bonds granted the most preferential treatment have a uniformly high level of investor protection. However, because Union law does not comprehensively address what actually constitutes a covered bond (see above), harmonisation is needed to ensure that covered bonds have similar structural characteristics across the Union that make them coherent with the relevant prudential requirements. The harmonisation of covered bonds is therefore in line with the Commission’s aim of financial stability, as pursued in its regulation of financial markets.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
The Treaty on the Functioning of the European Union (TFEU) authorises the European institutions to lay down appropriate provisions that have as their objective the establishment and functioning of the internal market (Article 114 TFEU). This extends to legislation dealing with the functioning of covered bond markets as part of the general legislation on the functioning of financial markets.
Subsidiarity (for non-exclusive competence)
non-exclusive
Because the structural features of covered bonds are currently determined mainly at national level, their preferential treatment under Union law is effectively granted to different types of product. EU action is needed to establish a common framework for covered bonds across the Union, ensuring that their structural characteristics are aligned with the risk features justifying Union preferential treatment. EU action to establish a common framework is also necessary to develop covered bond markets across the Union and support cross-border investments in the light of the objectives of the CMU.
• Proportionality
As outlined in the accompanying impact assessment, the preferred option (minimum harmonisation based on national regimes) should make it possible to achieve most of the objectives of this initiative at reasonable cost. The option balances the flexibility necessary to accommodate Member States’ specificities with the uniformity necessary for coherence at Union level. It will be effective in achieving the objectives, while at the same time minimising disruption and transition costs. A fundamental aim of the approach in this package is to avoid disrupting well-functioning and mature national markets while incentivising a wider use of covered bonds. The proposal includes provisions on the grandfathering of existing covered
bonds in order to smooth costs for their issuers and for markets. As the impact assessment shows, expected costs can be deemed proportionate in relation to expected benefits.
Choice
of instrument
A directive is an appropriate instrument to establish a harmonised legal framework for covered bonds at EU level. This Directive is principles-based, keeping detailed provisions to the minimum required to ensure that a set of common basic structural rules applies across the single market. Member States will have a degree of freedom in formulating their own laws to transpose the principles set out in the Directive.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
Contents
- CONSULTATIONS
- Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the
- Recommendation of 20 December 2012 on the funding of credit institutions, European Systemic Risk
- iii) two meetings of the Expert Group on Banking, Payments and Insurance (EGBPI) and
- 9 10
- 11 12
- Recommendation of 20 December 2012 on funding of credit institutions, European Systemic Risk
- The impact assessment has been amended accordingly, also addressing additional suggest ions
- iii) a more thorough analysis of the impact of regulatory harmonisation on cross-border
- literature; and
- 13 14
- Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement
ANDIMPACTASSESSMENTS
Ex-post evaluations/fitness
checks of existing legislation
This initiative on covered bonds relates to an area which is largely not addressed by Union legislation currently.
Stakeholder consultations
The Commission consulted stakeholders at several points in the preparation of this proposal, in particular by means of:
i) an open public consultation on covered bonds (September 2015 to 6 January 2016);
ii) publication of an inception impact assessment (9 June 2017);
one meeting of the Financial Services Committee (FSC).
Under the CMU action plan, the purpose of the public consultation was to evaluate weaknesses and vulnerabilities in national covered bond markets and to assess the merits of a European framework. While respondents were concerned that harmonisation based on a ‘one size fits all’ approach could impair well-functioning markets and reduce flexibility and the range of products on offer, they also expressed cautious support for targeted EU action, provided that harmonisation is principles-based, builds on existing frameworks and takes account of the specificities of national markets. The results of the consultation were discussed at a public hearing on 1 February 20167.
The Commission received four responses on the inception impact assessment, all of which supported the EU legislative initiative. The respondents addressed specific aspects of national frameworks (e.g. liquidity) and confirmed the general view in favour of harmonisation while not jeopardising well-functioning national systems.
At the first EGBPI meeting (9 June 2017), the majority of Member States expressed support for a Union covered bond framework based on the EBA’s 2016 advice, provided it remains principles-based. At the second meeting (28 September 2017), the discussion was more detailed, but in general Member States still supported a principles-based approach. Member States expressed similar views at the FSC meeting in July 2017.
The results of the public consultation can be found here:
The proposal also builds on further meetings with stakeholders and EU institutions. In general (while tending to focus on the aspect most relevant for their situation), stakeholders concentrated on balancing the need to change the existing framework so as to address prudential concerns with the wish to avoid disrupting well-functioning national systems. Input focusing on prudential concerns relating to the preferential treatment of covered bonds came mainly from the ESRB, the EBA and the European Central Bank, and to some extent from the competent authorities in the Member States with well-developed covered bond markets and from rating agencies, while the focus on well-functioning national markets came mainly from Member States with well-developed covered bond markets, from issuers and from investors.
The European Parliament has also expressed support for action, calling for a European legislative framework on covered bonds8.
Collection
and use of expertise
On 1 July 2014, the EBA issued a report identifying best practices with a view to ensuring robust and consistent frameworks for covered bonds across the Union9. The report was in response to a December 2012 ESRB recommendation on the funding of credit institutions10. It also set out the EBA’s opinion on the adequacy of the current prudential treatment of covered bonds, following the Commission’s call for advice in December 2013 on the basis of Article 503 CRR11.
As a follow-up, the ESRB recommended that the EBA monitor the functioning of the covered bonds market by reference to the best practices it had identified and called on the EBA to recommend further action if necessary.
In response, the EBA issued a Report on covered bonds — recommendations on the harmonisation of covered bond frameworks in the EU in December 2016. This includes a comprehensive analysis of regulatory developments in covered bond frameworks in individual Member States, with a particular focus on the level of alignment with the best practices identified in the previous report. Building on the results of the analysis, the EBA called for legislative action to harmonise covered bonds at Union level.
This proposal builds on the EBA’s analysis and advice. It deviates only in minor areas, e.g. as regards the level of detail concerning derivatives belonging to the cover pool; in the cover pool monitor not being mandatory; and, in the level of overcollateralisation.
In August 2016, the Commission had commissioned a study from ICF12 to assess the performance of current covered bond markets and the costs and benefits of potential EU action. The study, which was published in May 2017, looked at the potential benefits and costs of the EBA’s recommendations. Overall, it concluded that the potential benefits of a legislative initiative outweighed the potential costs and there was therefore a case for legislative action.
Resolution of 4 July 2017 on the report Towards a pan-European covered bonds framework
(2017/2005(INI)).
Report on EU covered bond frameworks and capital treatment, EBA (2014).
Board (ESRB/2012/2) (2013/C 119/01).
Call to EBA for advice on covered bonds capital requirements, ref. Ares(2013) 3780921 (20.12.2013).
Covered bonds in the European Union: harmonisation of legal frameworks and market behaviours, ICF
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In December 2017, the Basel Committee on Banking Supervision (BCBS) finalised the outstanding post-crisis regulatory reforms of the Basel III international regulatory framework for banks13. As part of the reforms, the BCBS revised the standardised approach on credit risk by including, inter alia, new standards on exposures to covered bonds. For the first time, the new standards largely replicate at international level the EU’s approach in the CRR, allowing covered bond exposures to benefit from lower risk weights subject to certain conditions. It is thus recognised that the EU’s treatment of covered bonds is prudentially viable and justified by the underlying characteristics of the instrument.
Impact
assessment
This proposal is accompanied by an impact assessment, which was submitted to the Regulatory Scrutiny Board (RSB) on 6 October 2017 and approved on 17 Nove m b er 201714.
The RSB commended the comprehensive and well-structured nature of the impact assessment and acknowledged that it applies its intervention logic systematically and contains a high degree of quantification to substantiate its findings. The RSB recommended that the report be improved in some limited respects:
a) the reasons for considering a ‘29th regime’ unattractive; and
b) greater clarity on the main elements of the ‘minimum harmonisation’ approach, and
whether (and how) they deviate from the EBA advice (Annex 6 has been added for this purpose).
of the RSB:
i) a more detailed explanation concerning the European secured note (ESN);
ii) a more detailed reasoning of the advantages of issuing covered bonds;
trade (issuance, investing) in covered bonds;
iv) a discarded option restricted to adjusting the prudential treatment of covered bonds;
v) a more comprehensive explanation of the ‘pass through effect’ assessed in financial
vi) a table showing the links between monitoring activity and the benchmark benefits.
The Commission considered a number of policy options for developing covered bond markets and addressing prudential concerns. These differ in terms of the degree of harmonisation, ranging from a non-regulatory option to options involving full harmonisation, as follows
• Baseline: Do nothing;
• option 1: Non-regulatory option;
• option 2: Minimum harmonisation based on national regimes;
• option 3: Full harmonisation replacing national regimes; and
• option 4: ‘29th regime’ operating in parallel with national regimes.
Basel III: finalising post-crisis reforms, Basel Committee on Banking Supervision (7.12.2017).
Option 1 (non-regulatory) was considered ineffective in achieving the objectives, as there is no guarantee that Member States would follow the best practices. Option 3 (full harmonisation) would probably achieve the objectives, but could disrupt existing well-functioning markets. Option 4 (‘29th regime’ meaning a fully integrated regime for issuers on a voluntary basis as an alternative to national laws on covered bonds, not requiring amendments to existing national laws) depends on industry take-up to be effective. Consultations suggest that such take-up is unlikely; this would undermine the chances of achieving the stated objectives. Also, a parallel regime would contribute to further fragmentation and duplication of costs.
The retained option is option 2 (minimum harmonisation based on national regimes). It builds on the recommendations in the 2016 EBA report, except for some limited deviations (in line with strong calls from stakeholders during the consultations, some provisions are less detailed than suggested in the report to leave more scope for protecting existing well-functioning national systems). The deviations do not affect the core structural features of covered bonds nor their supervision. The retained option achieves most of the objectives of the initiative at reasonable cost. It also balances the flexibility necessary to accommodate Member States’ specificities with the uniformity necessary for coherence at Union level. It is likely to be the most effective in achieving the objectives, while at the same time being efficient and minimising disruption and transition costs. It is also one of the more ambitious options in regulatory terms, while enjoying the most support from stakeholders.
Implementing this option would stimulate the development of covered bond markets where they do not exist or are underdeveloped. It would also lower issuers’ funding costs, help to diversify the investor base, facilitate cross-border investments and attract non-EU investors. Overall, it would reduce borrowing costs.
The option would address prudential concerns, including in relation to market innovation, and secure the prudential benefit of aligning the structural characteristics of the product with preferential prudential treatment at Union level. It would strengthen the protection of investors and its credit-enhancing features would reduce their due diligence costs.
One-off and recurrent direct administrative costs under the preferred option are expected to increase for issuers in low-cost jurisdictions (see impact assessment). Costs would also increase for supervisors. At the same time, issuers would benefit from lower funding costs and in turn citizens would enjoy lower borrowing costs. Costs would not increase for investors, given the lower due diligence costs.
Regulatory
fitness and simplification
The package on covered bonds, in particular this Directive, aims at harmonising an area currently regulated mainly at national level. The minimum harmonisation in the Directive will bring simplification in terms of basic alignment of core elements of national regimes.
Fundamental
rights
The EU is committed to high standards of protection of fundamental rights. In this context, the proposal is not likely to have a direct impact on those rights, as listed in the Charter of Fundamental Rights of the European Union.
4. BUDGETARYIMPLICATIONS
The proposal will have no implications for the budget of the Union.
5. OTHERELEMENTS
Implementation
plans and monitoring, evaluation and reporting arrangements
Five years after the transposition deadline and in close cooperation with the EBA, the Commission is to carry out an evaluation of the Directive and report to the European Parliament, the Council and the European Economic and Social Committee on its main findings. The evaluation is to be conducted in line with the Commission’s Better Regulation Guidelines.
Member States would regularly monitor application of the Directive on the basis of a number of indicators (e.g. type of issuer, number of permissions, type of eligible assets, level of overcollateralisation; issuance with extendable maturity structures).
• Detailed explanation of the specific provisions of the proposal
Subject matter, scope and definitions
The Directive defines covered bonds as debt obligations issued by credit institutions and secured against a ring-fenced pool of assets to which bondholders have direct recourse as preferred creditors. Covered bonds are traditionally issued by credit institutions. The Directive, in continuity with this tradition, only allows credit institutions to issue covered bonds. This is coherent with the inherent nature of the instrument which is to provide funding for loans, and granting loans on a large scale is a credit institution's business. In addition, credit institutions have the necessary knowledge and management capability of credit risk in relation to the loans in the cover pool and they are subject to sound capital requirements which contribute to underpin the investor protection as laid down in the dual recourse mechanism.
Issuers complying with this Directive may use the ‘European covered bonds’ label, which can be used together with specific national labels.
Structural features of
covered bonds
This section envisages a more articulated series of structural requirements than those in the UCITS Directive and should help to improve the quality of EU covered bonds. More specifically:
– dual recourse gives investors a double claim on both the issuer of covered bonds and
the assets in the cover pool;
– bankruptcy remoteness means that covered bonds’ maturity cannot be shortened
automatically upon the issuer’s insolvency or resolution. It is important to ensure that investors are repaid in line with the contractual schedule even in the event of default. Bankruptcy remoteness is directly linked to the dual recourse mechanism and is a core feature of the covered bond framework;
– the Directive contains provisions to ensure the quality of the cover pool, in particular
ensuring that only high-quality assets are used as collateral. There are related provisions on the segregation and location of cover assets, the uniformity of assets,
ensuring that assets located outside the EU present the same quality characteristics as those in the EU, ensuring that derivative contracts are used only for hedging purposes in relation to the cover pool, and the functioning of a cover pool monitor. Lastly, covered bond liabilities must be covered by cover assets at all times;
as covered bonds are issued mainly by large banks, their benefits are often beyond the reach of smaller institutions. The Directive allows issuers to pool cover assets by several credit institutions under certain conditions. This is intended to encourage issuance by smaller institutions and give them access to covered bonds funding;
market developments in the area of covered bonds include new liquidity structures to address liquidity and maturity mismatches. In view of the increased use of covered bonds allowing for extensions of the maturity and the fact that such structures mitigate default risk, the Directive regulates the structures to ensure they are not unnecessarily complex or opaque and do not change the structural characteristics of covered bonds, exposing investors to increased risks;
to address liquidity risk, the Directive lays down requirements for a liquidity buffer specifically related to the cover pool, complementing the prudential liquidity requirements in other relevant pieces of EU financial legislation;
the Directive frames the possibility for Member States to require a cover pool monitor. The existence of a cover pool monitor should be without prejudice of the responsibilities of the competent authorities as regards the performance of the specific public supervision set forth by this Directive; and
the Directive contains transparency requirements that build on initiatives by national legislators and market participants to disclose information to covered bond investors. These will ensure a uniform level of disclosure and allow investors to assess the risk of covered bonds.
Covered bond public
supervision
Covered bond public supervision is a core feature of many national covered bond frameworks and is specifically meant to protect investors. This Directive harmonises the components of such supervision and specifies the tasks and responsibilities of the national competent authorities performing it. Given the scope of this directive and considering that this specific covered bond supervision is a product supervision distinct from general supervision of e.g. prudential nature, Member States should be able to appoint different competent authorities. In such cases, the Directive requires that the competent authorities cooperate closely.
In order to guarantee compliance with the Directive, Member States are required to provide for administrative penalties and other administrative measures that are effective, proportionate and dissuasive, and enforced by competent authorities. The penalties and measures are subject to basic requirements as regards addressees, criteria to be taken into account in their application, publication, key powers to impose penalties, and penalty levels.
Labelling
Covered bonds are often marketed in the Union under national denominations and labels. This Directive allows credit institutions to use the specific European Covered Bonds label when issuing covered bonds. The use of the label would make it easier for investors to assess the quality of the covered bonds. It should however be facultative and Member States should be able to keep their own national denominations and labelling framework in place in parallel to
the European Covered Bonds label, provided that these comply with the requirements set out in this Directive.
Relationship with the resolution framework
This Directive is not intended to harmonise national insolvency regimes nor change the treatment of covered bonds in cases of resolution under Directive 2014/59/EU (Bank Recovery and Resolution Directive (BRRD))15. Rather, it establishes general principles governing the administration of covered bond programmes in cases of insolvency/resolution of the issuer. In the resolution of a credit institution, the BRRD allows the resolution authority to exercise control over the institution, in particular by managing and disposing of its assets and property, including its covered bond programme. Such tasks may be exercised directly by the resolution authority or indirectly by a special manager or by another person appointed by the resolution authority. This Directive does not change the treatment of covered bonds under BRRD which excludes covered bonds from the application of the bail-in tool up to the level of the collateral in the cover pool as laid down in third subparagraph of Article 44(2) of BRRD. Derivative contracts included in the cover pool also serve as collateral and cannot be terminated upon the issuer’s insolvency or resolution in order to ensure that the cover pool remains unaffected, segregated and with enough funding. BRRD also includes safeguards to prevent the splitting of linked liabilities, rights and contracts and it restricts those practices that are related to contracts with the same counterparty covered by security arrangements, including covered bonds. Where the safeguard applies, resolution authorities should be bound to transfer all linked contracts within a protected arrangement, or leave them all with the residual failing institution.
Third-country regime
There is currently no general third-country regime for covered bonds in Union law. However, Commission Delegated Regulation (EU) 2015/61 (Delegated Regulation on Liquidity Coverage Requirement, LCR)16 allows for the preferential treatment of foreign covered bonds complying with specific equivalence rules for the purpose of determining the liquidity buffer. The scope of the equivalence is very restricted, as it concerns the calculation of only a limited part of the liquidity buffer.
This Directive provides for the Commission, in close cooperation with the EBA, to assess whether a general equivalence regime for third-country covered bond issuers and investors is necessary or appropriate.
Amendments of other Directives
This Directive will replace the definition of covered bonds in Article 52 i of the UCITS Directive and become the single point of reference for all Union legislation relating to covered bonds. The definition in the UCITS Directive should therefore be deleted and replaced with a reference to the definition in this Directive. Similarly, references in other
15
Directive 2014/59/EU of the European Parliament and of the Council of the 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190).
Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement
6
directives to the UCITS Directive’s definition should be replaced with a reference to this Directive.