Communication of the outcome of the SREP assessment
Competent authorities should communicate, in accordance with the SREP engagement model set out in section 2.4, the outcome of the SREP assessment to the institution in writing. The communication should be addressed to the management body of the institution.
The communication of the outcome of the SREP assessment to institutions, and, where relevant, to other competent or resolution authorities, should at least include the following elements:
the relevant level of application, the date and the date of the application of the SREP assessment, as well as the reference dates of the information used in its preparation in accordance with Article 10 of the Commission Implementing Regulation (EU) No 710/2014;
a description of the outcome of the SREP, including a summary of the assessment, material supervisory findings, and the overall SREP score. Where remedial action is required from the institution for specific SREP elements or sub-elements, competent authorities should consider including an appropriate timeframe for remediation and sharing the score for these elements and sub-elements, where appropriate;
the required level and quality of the P2R, in accordance with the process and criteria specified in Title 7, including the institution-specific justification for setting the requirements, separately for the risk of excessive leverage and for other types of risks. The justification should provide a clear indication of the material risk drivers contributing to the P2R. In case of relevant changes to the regulatory framework for determining the P1R applicable to an institution, communication should include the outcome of the assessment performed as per paragraph 294 of Title 7. In justifying P2R, competent authorities should:
identify the main deficiencies to be covered by these requirements until they are addressed line with paragraph 320.
in communicating the required level of capital and quality of the Pillar 2 requirements in accordance with the previous point, competent authorities should:
communicate the institution’s TSCR as a proportion (ratio) of the TREA, broken down in terms of the composition of the requirement. The TSCR should be expressed using the following formula:
communicate the institution’s TSLRR as a proportion (ratio) of the leverage ratio exposure (LRE), broken down in terms of the composition of the requirement. The TSLRR should be expressed using the following formula:
communicate the institution’s OCR and its component parts – the Pillar 1 own funds requirements, P2R and the buffer requirements – as a proportion (ratio) of the TREA, broken down in terms of the composition of the requirement;
communicate the institution’s OLRR and its component parts – the leverage ratio own funds requirement, P2R-LR and G-SII leverage ratio buffer requirement – as a proportion (ratio) of the LRE, broken down in terms of the composition of the requirement.
The expected level and quality of the P2G and P2G-LR in accordance with the process and criteria specified in section 7.6, where their determination results in a positive value, including:
all applicable own funds ratios affected by P2G (CET1, T1 and total own funds) and leverage ratio requirement affected by P2G-LR and that own funds held for the purposes of P2G cannot be used to meet any of the elements of OCR and that P2G-LR cannot be used to meet any of the elements of OLRR;
the relevant time limits for its establishment;
the institution-specific justification for setting the guidance and the main elements of the methodology used;
the potential supervisory reaction to situations where P2G and P2G-LR are not met.
a statement on the liquidity held and any specific liquidity requirements set by the competent authority other than those laid down in Article 4(2) Commission Delegated Regulation 2015/61 and 428b(2) of Regulation No 575/2013, including the institution-specific reasons for these requirements;
if applicable, a statement on other supervisory measures, whether qualitative or quantitative, including any early intervention measures that the competent authority intends to take.