Guidance concerning the treatment of equity exposures incurred under legislative programmes according to Article 133(5) of Regulation (EU) No 575/2013

(C/2026/854) The Commission has identified the promotion of competitiveness as a key priority, as outlined in the Competitiveness Compass (1). Fostering investments in the most innovative companies and in the most strategic sectors is crucial to ensure the future prosperity and security of the European Union. In response to the global financial crisis, the European Union embarked on a wide-ranging reform of the prudential framework to ensure the resilience of its banking system in line with the international standards issued by the Basel Committee on Banking Supervision. As a result of these reforming efforts, the EU banking system is now among the most stable and well-capitalised in the world. Given its strengths and stability, the EU banking system can play an important role to support the financing of innovative companies and strategic sectors, amongst others. Equity is often the only sustainable source of financing for a large number of the fastest growing EU companies as they often do not have the positive cash flows needed to service debt, they lack the assets to borrow via secured finance, or they are unable to get a rating, or lack the operational capacity to tap the public securities markets yet. In its 19 March 2025 Communication on the Savings and Investments Union (2), the Commission has committed to make use of all available instruments in order to foster and develop the financing ecosystem, including by better leveraging on public schemes to help mobilise private investments for fast-growing companies and address barriers that restrict the amount of European capital available to finance European innovation. Building on the positive experience of member jurisdictions and acknowledging the critical role played in advancing key public welfare objectives by public-private investments and the advantageous risk-return profile thereof, the standards of the Basel Committee on Banking Supervision foresee that equity exposures incurred under legislative programmes can be assigned a risk weight more favourable than that assigned to other equity exposures. Consistently with the standards of the Basel Committee on Banking Supervision, since 1 January 2025, Article 133(5) of Regulation (EU) No 575/2013 (CRR) (3) allows institutions to apply a favourable treatment for equity exposures incurred under legislative programmes to stimulate specific sectors of the economy. To be eligible, such legislative programmes must provide significant subsidies or guarantees for the investment of the institutions, involve some form of government oversight, and contain restrictions on the equity investment. Subject to the prior permission of competent authorities, institutions can apply the favourable treatment to equity exposures incurred under legislative programmes up to the part of such equity exposures that in aggregate does not exceed 10 % of the institutions’ own funds. A consistent application of this provision will ensure that the EU banking sector is not unduly hindered from contributing to the EU’s strategic priorities and the growth of the EU economy and that the stability and the level playing field of the single market is preserved. Furthermore, a common and transparent understanding of this provision will encourage cross-border investment and competition, thereby making it easier for companies to raise equity financing from investors throughout the EU. This integration strengthens the single market by connecting capital markets and promoting economic growth and innovation in line with the objectives of the Savings and Investments Union. In order to achieve these objectives, the Commission provides guidance on the use of the favourable prudential treatment for equity exposures incurred under EU, national, and regional legislative programmes in the Appendix to this Communication. The guidance is without prejudice to the rules and procedures applicable under the State aid framework. Legislative programmes which do not constitute State aid could still support the investing institution and thus be considered significant subsidies and guarantees for the purposes of Article 133(5) provided that they meet the conditions thereof as clarified by this Communication. As the application of the prudential treatment of Article 133(5) CRR can only be approved in presence of legislative programmes, the Communication clarifies their expected characteristics. Thus, legislative programmes are schemes governed by a common arrangement to stimulate specific sectors and based on acts of general application such as national statutes, EU regulations, and EU decisions, notably those related to the implementation of the EU budget. On the contrary, measures providing subsidies or guarantees to individual beneficiaries, labour benefits, and the statutes of national promotional banks and institutions do not meet the definition of legislative programme. In line with its prudential focus, the present Communication remains sector-neutral, acknowledging that the decision of which sectors should be targeted by legislative programmes pertains to EU, national and regional authorities. This allows for covering programmes that support financing strategic EU priorities, including the digital, green and social transitions, and the strengthening of EU defence and security. It could also include legislative programmes developed and financed by the EU and Member States which aim at fostering strategic investments in third countries. Legislative programmes developed and financed by third-country authorities are outside the scope of this Communication. Institutions can be granted the approval to apply the favourable treatment set forth in Article 133(5) of the CRR not only on equity exposures incurred under legislative programmes developed and financed by the EU or the Member State in which they are authorised, but also for those developed and financed by other Member States. Since legislative programmes must provide subsidies and guarantees, the present Communication clarifies that the requirement in Article 133(5) of the CRR would be met when the public sector provides equity financing, debt financing, grants, and/or guarantees resulting in minimum levels of co-investment and/or a minimum reduction of the exposure value of the co-investing institutions at the inception of each legislative programme. Institutions can apply the favourable prudential treatment to equity exposures incurred under legislative programmes which subsequently achieve lower levels of co-investment and exposure value reduction if the dilution of the participation of the public sector is due to their success in attracting private capital. As legislative programmes must involve government oversight implying executive powers, such schemes will be eligible to the extent that legislative programmes contain non-discriminatory and transparent screening procedures as well as arrangements to monitor that the public financial support is used according to the objectives thereof. In light of the differences between legal and institutional settings across the EU, the Communication does not envisage any specific arrangements to achieve such objectives. As the CRR requires that the legislative programmes must contain restrictions on equity investments, the Communication provides a non-exhaustive list of examples of restrictions. In light of the nature of their mandate, financing and funding arrangements, and robust governance, legislative programmes developed and supported by the EIB, the EIF, and/or financed and/or guaranteed by the EU budget are considered compliant with the present Communication. To enhance the transparency for market participants across the single market and help competent authorities to take timely decisions pursuant to Article 133(5) of the CRR, the Commission will maintain a register of the legislative programmes notified by Member States. The register will also list the legislative programmes financed and/or guaranteed by the EU budget, EIB, and/or the EIF which aim at fostering equity financing in EU companies. The final decision on whether individual institutions can apply the favourable treatment of Article 133(5) of the CRR rests with the competent authorities which have to consider the specific prudential situation of those institutions. Member States (for both national and regional legislative programmes, including those financed by their respective national promotional banks and institutions) should notify the Commission the title and legal basis of each legislative programme for which they seek the inclusion in the register, outline its main conditions, and include an explanation demonstrating how it complies with the requirements set forth in Article 133(5), as further elaborated in this Communication. The Commission will provide a standardised template for the notification. The interpretation of the criteria of Article 133(5) CRR set out in the present Communication should apply mutatis mutandis to insurance and reinsurance undertakings for the purposes of Article 173(1) of Commission Delegated Regulation (EU) 2015/35 as amended (4). This Guidance is intended to assist Member States, competent authorities and institutions in the application of Article 133(5) CRR. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07 · Text as adopted (Official Journal); later amendments are not incorporated in this text.