Transitional Equity Risk

Overview

Article 173 and Article 308b(13) define the legacy transitional measure for standard equity risk.^[1][2]

Status warning:

this treatment is soon deprecated. Commission Delegated Regulation (EU) 2026/269 replaces Article 173 from 30 January 2027 with a different treatment for investments in equity under legislative programmes. This page is limited to legacy or current transitional-equity calculations until the new Article 173 treatment is modelled separately.^[3]

Article 308b(13) says the transitional standard-equity parameter is a weighted average of the duration-based equity parameter and the standard equity parameter without the Article 304 option. The weight on the standard parameter increases from 0% during 2016 to 100% on 1 January 2023.^[2]

Article 173 limits the eligible exposure to equities purchased on or before 1 January 2016 that are not subject to the duration-based equity risk sub-module. For fund holdings where look-through is not possible, the transitional measure applies only to the relevant target equity allocation at 1 January 2016, reduced annually for asset turnover and never increased for a later higher target allocation.^[1]

EIOPA Q&A 2161 confirms that the symmetric adjustment belongs inside the standard-equity leg of the weighted average, rather than being added after the weighted average is calculated.^[4]

This page does not test whether an equity holding is eligible for the transitional measure, does not perform Article 84 look-through, does not calculate fund turnover reductions, and does not model liability-side responses. It assumes the Type 1 and Type 2 transitional exposures have already been identified and evidenced outside the calculator.

Input Terms

• Transitional Type 1 Equity Exposure: Type 1 equity exposure eligible for the legacy transitional standard-equity treatment.^[1][2]
• Transitional Type 2 Equity Exposure: Type 2 equity exposure eligible for the legacy transitional standard-equity treatment.^[1][2]
• Reporting Year: The selector used to set the standard-parameter weight. 2016 maps to 0%, 2017 to one seventh, and so on until 2023 and later maps to 100%.^[2]
• Type 1 Base Shock Factor: The base Type 1 equity shock before adding the symmetric adjustment.^[5]
• Type 2 Base Shock Factor: The base Type 2 equity shock before adding the symmetric adjustment.^[5]
• Symmetric Adjustment: The Article 172 symmetric adjustment in percentage points, supported by official EIOPA technical information for the reporting date.^[6]

Technical Rationale

Article 308b made transitional equity relief temporary by moving the weighting fully to the standard parameter by 2023.^[2] The reporting-year weight is therefore the governance anchor for whether any legacy relief remains available.

The Type 1 transitional shock blends the 22% duration-based parameter with the Type 1 standard shock after symmetric-adjustment placement.

The Type 2 transitional shock applies the same Article 308b weighting pattern to the Type 2 standard shock.

The standalone capital combines the shocked Type 1 and Type 2 transitional exposures.

Important Notes

• Soon deprecated: Article 173 is replaced from 30 January 2027. This page intentionally marks the treatment as legacy.
• Eligibility not modelled here: The page assumes the undertaking has separately evidenced Article 173 eligibility, including the purchase-date condition, the exclusion from duration-based equity risk, and any fund-target-allocation or turnover reduction logic.
• Symmetric adjustment placement: The symmetric adjustment is applied inside the standard Type 1 or Type 2 leg of the weighted average, consistent with EIOPA Q&A 2161.^[4]
• Branch boundary: This page does not model any liability-side response and is not a complete equity SCR calculation by itself. The output is a standalone branch amount before Equity Risk and before Market Risk / BSCR diversification.
• Reporting: The displayed result is intended to support the corresponding equity-risk component for the S.25.01.01 standard-formula reporting view.^[7]