Question
If an institution has unsecured deposits from a Sovereign Wealth Fund, are those deposits from financial customers or deposits from non-financial customers?
Background on the question
Article 422(5) of Regulation (EU) No 575/2013 (CRR) states that deposits from non-financial customers that do not fulfil the criteria of paragraphs 3 and 4 should be treated with a 40% outflow rate. However there is no definition of what a non-financial customer is. It is clear that non-financial corporations are included here and that banks and financial corporations are not included. But it is unclear if a Sovereign Wealth Fund is treated like a financial customer or like a Government/Sovereign (meaning it is a non-financial customer).
Answer
For liquidity coverage and stable funding purposes, in the absence of a specific provision on unsecured deposits from a Sovereign Wealth Fund under Regulation (EU) No 575/2013 (CRR) or the Delegated Regulation (EU) 2015/61, unsecured deposits from a Sovereign Wealth Fund should be considered as deposits from financial customers under Article 422(5) of the CRR 31a(1) of the Delegated Regulation (EU) 2015/61 unless the Sovereign Wealth Fund is 100% owned by the sovereign and managed by a public sector entity as per Article 4(1)(8) of the CRR, in which case they should be considered as deposits from a public sector entity, or is managed by a central bank as per Article 4 (1)(46) of the CRR, in which case they should be considered as deposits from a central bank.