On May 13, 2016, a Commission Delegated Regulation containing Regulatory Technical Standards specifying the conditions for the application of derogations, concerning currencies with constraints on the availability of liquid assets, under the Capital Requirements Regulation was published in the Official Journal of the European Union. The CRR sets out a Liquidity Coverage Requirement which requires firms to hold liquid assets to maintain adequate levels of liquidity buffers to cope with any possible imbalances between liquidity inflows and outflows. Firms may derogate from the LCR where the requirement exceeds the availability of those assets in a particular currency.

The RTS sets out the conditions for a firm to apply the CRR's provisions on derogation of currency constrains and the availability of liquid assets. A firm must notify its regulator of its intention to apply one or both of the derogations in writing 30 days before the application of the first derogation or if it wants to materially amend the application of a derogation. To be eligible for the derogations, a firm must satisfy the conditions that determine whether the derogation is justified - the firm must have reduced the need for liquid assets in the full range of business conducted by the firm and the firm's holding of liquid assets must be consistent with the availability of those assets in the relevant currency. In December 2016, an EU Regulation was published which identified the Norwegian Krone as a currency with constraints on the availability of liquid assets.

The RTS enter into force on June 2, 2016 and will apply directly across the EU.

The Delegated Regulation can be viewed at: http://eur-lex.europa.eu/legal-ontent/EN/TXT/?uri=uriserv:OJ.L_.2016.125.01.0001.01.ENG&toc=OJ:L:2016:125:TOC