Article 34 The type of assets that can relate to the operation of special purpose entities and meaning of minimal and insignificant regarding qualifying Additional Tier 1 and Tier 2 capital issued by special purpose entities for the purposes of Article 83(1) of Regulation (EU) No 575/2013

The assets of a special purpose entity shall be considered to be minimal and insignificant where both the following conditions are met:

1. (a)

   the assets of the special purpose entity which are not constituted by the investments in the own funds of the related subsidiary are limited to cash assets dedicated to payment of coupons and redemption of the own funds instruments that are due;

2. (b)

   the amount of assets of the special purpose entity other than the ones mentioned in point (a) are not higher than 0,5 % of the average total assets of the special purpose entity over the last three years.

For the purpose of point (b) of paragraph 1, the competent authority may permit an institution to use a higher percentage provided that both of the following conditions are met:

1. (a)

   the higher percentage is necessary to enable exclusively the coverage of the running costs of the special purpose entity;

2. (b)

   the corresponding nominal amount does not exceed EUR 500000.