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S.I. No. 522/2015 - European Union (Bank Recovery and Resolution) Resolution Fund Levy Regulations 2015.

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the making

this Statutory Instrument was published in “Iris Oifigiúil”

24th November, 2015. I, PATRICK HONOHAN, Governor

the Central Bank

Ireland (the “Bank”), in the exercise

the powers conferred on the Bank, as designated resolution authority, by Regulation 166

the European Union (Bank Recovery and Resolution) Regulations 2015 (No. 289

2015) (the “Bank Recovery and Resolution Regulations”), hereby make, after having consulted with the Minister for Finance in accordance with Regulation 199 thereof, the following Regulations: Citation

  1. These Regulations may be cited as the European Union (Bank Recovery and Resolution) Resolution Fund Levy Regulations
  2. Interpretation 2.

(1)In these Regulations- “Act

1942” means Central Bank Act 1942 (No. 22

1942); “Bank and Investment Firm Resolution Fund” means the fund established pursuant to Regulation 163

(1)

the Bank Recovery and Resolution Regulations; “Commission Delegated Regulation” means Commission Delegated Regulation (EU) 2015/63

21 October 2014 supplementing Directive 2014/59/EU

the European Parliament and

the Council with regard to ex ante contributions to resolution financing arrangements1 ; “IFRS Regulation” means Regulation (EC) No 1606/2002

the European Parliament and

the Council

19 July 2002 on the application

international accounting standards2 ; “Levy period” means the calendar year 2015; “Limited Activity Investment Firms” means investment firms authorised in the State which fall within the definition

Article 96

(1)(a) or (b)

Regulation (EU) No 575/2013

the European Parliament and

the Council3 or investment firms authorised in the State which carry out activity 8

Annex I Section A

Directive 2004/39/EC

the European Parliament and

the Council4 but which do not carry out activities 3 or 6

Annex I Section A

that Directive; “OTC Regulation” means Regulation (EU) No 648/2012

the European Parliament and

the Council

4 July 2012 on OTC derivatives, central counterparties and trade repositories5 .

(2)In these Regulations, unless otherwise specified, the definitions contained in the Bank Recovery and Resolution Regulations and the Commission Delegated Regulation shall apply.
(3)These Regulations shall be read together with the Commission Delegated Regulation. Applicability 3. Every person who on 30 November 2015 is an institution within the meaning

Regulation 166

the Bank Recovery and Resolution Regulations shall pay a levy in respect

the levy period to the Central Bank for the account

the Bank and Investment Firm Resolution Fund. Basis for contributions from all institutions 4. For the purposes

the Bank Recovery and Resolution Regulations and the Commission Delegated Regulation, the following shall apply: (

  1. a)The annual target level for contributions to the Bank and Investment Firm Resolution Fund, for the levy period, is EUR 76,425,616; (
  2. b)The aggregate liabilities, excluding own funds and covered deposits,

all institutions authorised in the State, for the levy period, is EUR 695,962,526,843. Determination

additional risk indicators for institutions to which the Commission Delegated Regulation applies 5. The additional risk indicators specified in Article 6

(5)(a) to (c)

the Commission Delegated Regulation shall be determined by the resolution authority in accordance with the Schedule. Risk adjustment

contributions in respect

Union branches and Limited Activity Investment Firms 6.

(1)Each Union branch and Limited Activity Investment Firm shall pay EUR 1,000 for each EUR 9,000,000

its total liabilities, less own funds and covered deposits.

(2)For the purposes

calculating the total liabilities

each Union branch and Limited Activity Investment Firm, the following liabilities shall be excluded: (a) the intragroup liabilities arising from transactions entered into by a Union branch or Limited Activity Investment Firm with an institution which is part

the same group, provided that all the following conditions are met: (

  1. i)each institution is established in the Union; (
  2. ii)each institution is included in the same consolidated supervision in accordance with Articles 6 to 17

Regulation (EU) No 575/2013 on a full basis and is subject to an appropriate centralised risk evaluation, measurement and control procedures; and (iii) there is no current or foreseen material practical or legal impediment to the prompt repayment

the liability when due; (b) the liabilities created by a Union branch or Limited Activity Investment Firm, which is member

an IPS as referred to in point

(8)

Article 2

(1)

Directive 2014/59/EU

the European Parliament and

the Council6 and which has been allowed by the competent authority to apply Article 113

(7)

Regulation (EU) No 575/2013, through an agreement entered into with another institution which is member

the same IPS; (c) in the case

a central counterparty established in a Member State having availed itself

the option in Article 14

(5)

the OTC Regulation, liabilities related to clearing activities as defined in Article 2

(3)

the OTC Regulation, including those arising from any measures the central counterparty takes to meet margin requirements, to set up a default fund and to maintain sufficient pre-funded financial resources to cover potential losses as part

the default waterfall in accordance with the OTC Regulation, as well as to invest its financial resources in accordance with Article 47

the OTC Regulation; (d) in the case

a central securities depository, the liabilities related to the activities

a central securities depository, including liabilities to participants or service providers

the central securities depository with a maturity

less than seven days arising from activities for which it has obtained an authorisation to provide banking-type ancillary services in accordance with Title IV

Regulation (EU) No 909/2014

the European Parliament and

the Council7 , but excluding other liabilities arising from such banking-type activities; (e) in the case

investment firms, the liabilities that arise by virtue

holding client assets or client money including client assets or client money held on behalf

UCITS as defined in Article 1

(2)

Directive 2009/65/EC

the European Parliament and

the Council8 or

AIFs as defined in point (a)

Article 4

(1)

Directive 2011/61/EU

the European Parliament and

the Council9 , provided that such a client is protected under the applicable insolvency law; (f) in case

a Union branch or Limited Activity Investment Firm operating promotional loans, the liabilities

the intermediary institution towards the originating or another promotional bank or another intermediary institution and the liabilities

the original promotional bank towards its funding parties in so far as the amount

these liabilities is matched by the promotional loans

that institution.

(3)The liabilities referred to in paragraph
(2)(
  1. a)and (
  2. b)shall be evenly deducted on a transaction by transaction basis from the amount

total liabilities

the institutions which are parties

the transactions or agreements referred to in paragraph

(2)(a) and (b).
(4)For the purpose

this Regulation, the yearly average amount, calculated on a quarterly basis,

liabilities referred to in paragraph

(1)arising from derivative contracts shall be valued in accordance with Article 429
(6)and
(7)

Regulation (EU) No 575/2013.

(5)The value assigned to liabilities arising from derivative contracts may not be less than 75 %

the value

the same liabilities resulting from the application

the accounting provisions applicable to the institution concerned for the purposes

financial reporting.

(6)If, under national accounting standards applying to a Union branch or Limited Activity Investment Firm, there is no accounting measure

exposure for certain derivative instruments because they are held

f-balance sheet, the Union branch or Limited Activity Investment Firm concerned shall report to the resolution authority the sum

positive fair values

those derivatives as the replacement cost and add them to its on-balance sheet accounting values.

(7)For the purpose

this Regulation, the total liabilities referred to in paragraph

(1)shall exclude the accounting value

liabilities arising from derivative contracts and include the corresponding value determined in accordance with paragraphs

(4)to
(6).
(8)For verifying whether all conditions and requirements referred to in paragraphs
(2)to
(7)are met, the resolution authority shall be based on the relevant assessments conducted by competent authorities that are made available in accordance with Article 90

Directive 2014/59/EU. Process for raising contributions in respect

Union branches and Limited Activity Investment Firms 7.

(1)The date by which the resolution authority shall notify each Union branch and Limited Activity Investment Firm

its decision determining the annual contribution to be paid by them for the levy period shall be the 30 November 2015.

(2)The resolution authority shall notify the decision made in respect

each Union branch and Limited Activity Investment Firm in any

the following ways: (a) electronically or by other comparable means

communication allowing for an acknowledgment

receipt; (b) by registered mail with a form

acknowledgment

receipt;

(3)The decision made in respect

each Union branch and Limited Activity Investment Firm shall specify: (

  1. a)the condition and the means by which the annual contribution shall be paid; and (
  2. b)the share

irrevocable payment commitments referred to in Article 103

Directive 2014/59/EU that each Union branch or Limited Activity Investment Firm can use.

(4)For the purposes

paragraph

(3), the resolution authority shall accept collateral only

the kind and under conditions that allow for swift realisability, including in the event

a resolution decision over the weekend, and the collateral should be conservatively valued to reflect significantly deteriorated market conditions.

(5)The date by which each Limited Activity Investment Firm and Union branch is liable to pay the levy for the levy period shall be 31 December 2015.
(6)Without prejudice to any other remedy available to the resolution authority, in the event

partial payment, non-payment or non-compliance with the requirement set out in the decision made in respect

each Union branch and Limited Activity Investment Firm, the Union branch or Limited Activity Firm concerned shall incur a daily penalty on the outstanding amount

the instalment.

(7)The daily penalty interest shall accrue on a daily basis on the amount due at an interest rate applied by the European Central Bank to its principal refinancing operations, as published in the C series

the

ficial Journal

the European Union, in force on the first calendar day

the month in which the payment deadline falls increased by 8 percentage points from the date on which the instalment was due. Service

notice on all institutions 8. Regulation 195

the Bank Recovery and Resolution Regulations shall apply in respect

service

a notice or other document by the resolution authority for the purposes

these Regulations and the Commission Delegated Regulation. Newly supervised Union branches and Limited Activity Investment Firms 9.

(1)Where a Union branch or Limited Activity Investment Firm is a newly supervised institution for only part

the levy period, the partial contribution shall be determined by applying the methodology set out in Regulation 6

(1)to the amount

its annual contribution calculated during the subsequent levy period, by reference to the number

full months

the levy period for which that Limited Activity Investment Firm or Union branch is supervised.

(2)Where a Union branch or Limited Activity Investment Firm is a newly supervised institution for only part

the levy period, its partial annual contribution shall be collected together with the annual contribution due for the subsequent levy period. Provision

evidence concerning lump sum amounts by institutions to which the Commission Delegated Regulation applies 10. Where an institution to which the Commission Delegated Regulation applies intends to provide evidence that the lump sum amount referred to in paragraphs

(1)to
(6)

Article 10

the Commission Delegated Regulation is higher than the contribution calculated in accordance with Article 5

the Commission Delegated Regulation, the institution shall provide such evidence to the resolution authority within 21 days

receipt

the levy notice. SCHEDULE Calculation

“Trading activities,

f-balance sheet exposures, derivatives, complexity and resolvability” For the purposes

determining the risk indicator specified in Article 6

(5)(a)

the Commission Delegated Regulation, the following sub-indicators shall be determined: (

  1. a)Trading Ratio; (
  2. b)Derivatives Ratio. The sub-indicator “Trading Ratio” shall consist

the following calculation: Where, for the purposes

this sub-indicator: Financial assets held for trading shall mean financial assets held for trading as defined in accordance with the International Financial Reporting Standards referred to in the IFRS Regulation. Financial liabilities held for trading shall mean financial liabilities held for trading as defined in accordance with the International Financial Reporting Standards referred to in the IFRS Regulation. The sub-indicator “Derivatives Ratio” shall consist

the following calculation: Where, for the purposes

this sub-indicator: Derivatives exposures shall mean the yearly average amount, calculated on a quarterly basis,

liabilities arising from derivatives contracts valued in accordance with Article 429

(6)and
(7)

Regulation (EU) No 575/2013. Derivatives cleared with a Qualifying Central Counterparty shall mean the yearly average amount, calculated on a quarterly basis,

liabilities arising from derivatives contracts valued in accordance with Article 429

(6)and
(7)

Regulation (EU) No 575/2013, cleared through a CCP as defined in Article 2

(1)

the OTC Regulation. The resolution authority shall apply the following signs to the sub-indicators: Trading Ratio: “+” Derivatives Ratio: “+” Each sub-indicator shall have an equal weight. Calculation

“Membership in an Institutional Protection Scheme” For the purposes

determining the risk indicator specified in Article 6

(5)(b)

the Commission Delegated Regulation, it shall be determined whether the institution is a member

an Institutional Protection Scheme. The maximum value

the range referred to in Step 3

Annex I

the Commission Delegated Regulation shall be taken for any institution that is a member

an Institutional Protection Scheme. The minimum value

the range referred to in Step 3

Annex I

the Commission Delegated Regulation shall be taken for all other institutions. Calculation

“Extent

previous extraordinary public financial support” For the purposes

determining the risk indicator specified in Article 6

(5)(c)

the Commission Delegated Regulation, the methodology specified in Article 6

(8)shall apply. Signed for and on behalf

the CENTRAL BANK

IRELAND, 20 November 2015. PATRICK HONOHAN, Governor

the Central Bank

Ireland. 1 OJ L 11, 17.1.2015, p.

  1. 2 OJ L 243, 11.9.2002, p.
  2. 3 OJ L 176, 27.6.2013, p.
  3. 4 OJ L 145, 30.4.2004, p.
  4. 5 OJ L 201, 27.7.2012, p.
  5. 6 OJ L 173, 12.6.2014, p.
  6. 7 OJ L 257, 28.8.2014, p.
  7. 8 OJ L 302, 17.11.2009, p.
  8. 9 OJ L 174, 1.7.2011, p.
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