The Committee of European Banking Supervisors (CEBS) has published a consultation paper on implementation guidelines regarding hybrid capital instruments.

Following the CEBS proposal for a common definition of Tier I hybrids, published in April 2008, the Capital Requirements Directive (CRD) was amended to contain explicit rules for the treatment of hybrid capital instruments. The amendments will need to be transposed into Member States’ national law by 31 October 2010 and come into force by 31 December 2010.

The consultation paper produced by CEBS responds to a requirement of the amended CRD for CEBS to "elaborate guidelines for the convergence of supervisory practices with regard to the instruments referred to in Article 63a (1) and in Article 57(a) and monitor their application".

The draft guidelines presented in the consultation paper also cover permanence, flexibility of payments, loss absorbency, limits and hybrid instruments issued through an SPV.

A public hearing will take place on 8 September 2009 at CEBS’s premises in London and the deadline for written responses to the consultation paper is 23 September 2009.

View Consultation paper on implementation guidelines regarding hybrid capital instruments, 22 June 2009