Overall, the EBA has observed convergence and standardisation in terms of drafting of the terms and conditions of the instruments and issuance programmes, also as a result of the implementation of previous EBA recommendations. The EBA expects that forthcoming issuances will continue to retain a high level of standardisation in their terms and limit complexity.

In light of the results of the continuous monitoring activities, a few new recommendations have been added. In particular, TLAC/MREL disqualification events clauses in own funds issuances are deemed acceptable; risk-adjusted capital Tier 2 instruments (RAC Tier 2) are discouraged; alignment event clauses are allowed under certain conditions; institutions should be able to demonstrate that interest rate reset mechanisms do not entail incentives to redeem; a certain degree of supervisory flexibility has been introduced on tap issuances from small issuers, in particular in case of episodes of market volatility. Finally, the report explains some investigations that the EBA is conducting on the prudential valuation of non-CET1 instruments.