Version status: Amended | Document consolidation status: Updated to reflect all known changes
Version date: 27 June 2020 - onwards
  Version 6 of 6    

Article 501 Capital requirements deduction for credit risk on exposures to SMEs

1.Institutions shall adjust the risk-weighted exposure amounts for non-defaulted exposures to an SME (RWEA), which are calculated in accordance with Chapter 2 or 3 of Title II of Part Three, as applicable, in accordance with the following formula:

2. For the purposes of this Article:

(a)the exposure to an SME shall be included either in the retail or in the corporates or secured by mortgages on immovable property classes;

(b)an SME is defined in accordance with Commission Recommendation 2003/361/EC [Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).]; among the criteria listed in Article 2 of the Annex to that Recommendation only the annual turnover shall be taken into account;

(c)institutions shall take reasonable steps to correctly determine E* and obtain the information required under point (b).