On March 24, 2016, Regulation ((EU) 2016/445) of the European Central Bank (ECB) on the exercise of options and discretions (ODs) was published in the Official Journal of the EU (OJ). The ECB has also published a guide on the ODs available under Union law.

The Regulation details the legal obligations of the significant credit institutions within the scope of the single supervisory mechanism (SSM) regarding the prudential treatment of certain “general” ODs available to competent authorities under EU banking law (that is, the CRD IV Directive (2013/36/EU), the Capital Requirements Regulation (Regulation 575/2013) (CRR) and delegated acts).

The guide sets out the ECB’s approach concerning the exercise of the ODs. It aims to provide coherence, effectiveness and transparency regarding the supervisory policies that will be applied in supervisory processes within the SSM as far as the significant credit institutions are concerned. In particular, it is designed to assist the joint supervisory teams (JSTs) in the performance of their tasks regarding the principles the ECB intends to follow in supervising significant credit institutions.

A related ECB press release advises that, soon, the ECB will launch a consultation on how to harmonise a second, smaller group of identified ODs. Regulation. Guide.