P
Prepaym
ment Fe
eatures with Ne
egative Compe
ensation
n
(propo
osed Am
mendme
ents to IFRS
I
9) AG’s initial outreach o
revvealed that prepaymen
nt features with w
negativve compenssation EFRA
exist in different types of loa
ans in variouus jurisdictio
ons across Eu
urope. Do yoou agree tha
at the issuee is widespre
ead enough tthat the IAS B should am
mend IFRS 9 so close to iits effective date? Why or why not?? Please explain and proovide examples where po
ossible. We are not aw
ware that in i our jurissdiction the
ese prepaym
ment optionns with neggative comp
pensation are widespread. In additioon, CNC has not received
d any questioons related tto this type of instrumen
nts. e
off financial assets with
h prepayme
ent featurees with neggative Do yyou have evidence comp
pensation th
hat would no
ot qualify ass SPPI based
d on the elig
gibility criterria as propossed in the A
Amendmentss? If so, do you consideer this outco
ome to be appropriate oor inappropriate? Pleasse explain an
nd provide examples whhere possible
e. No. nd eligibility
y criterion rresult in a more Woulld EFRAG’s suggestion to removee the secon
appro
opriate meaasurement of financiall assets witth prepaym
ment featurees with neggative comp
pensation? P
Please explaiin and provi de exampless where possible. We u
understand that t
these conditions arre more resttrictive than those that are applicable to prepaayment opttions alreadyy in the sccope of IFR
RS 9 and th
hat they m
may result in the amen
ndments bein
ng applicable
e only to a veery narrow p
population of instrumentts. Howeever, we beelieve that the t second condition (ffair value of the prepaayment feature is insign
nificant) is neeeded to kee
ep this amenndment applicable to a narrowly defi ned populattion of instru
uments and to prevent tthe inclusionn in the scope instruments with poteential variability of cash flows associated with the existence oof such negaative prepaym
ment optionss. on, 17th May 2017 Lisbo