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S.I. No. 713/2020 - European Union (Bank Recovery and Resolution) (Amendment) Regulations 2020

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the making

this Statutory Instrument was published in “Iris Oifigiúil”

5th January,

  1. CONTENTS Regulation
  2. Citation and commencement
  3. Definition
  4. Amendment

Regulation 3

Regulations

2015 (interpretation) 4. Amendment

Regulation 13

Regulations

2015 (assessment

recovery plans) 5. Amendment

Regulation 17

Regulations

2015 (resolution plans) 6. Amendment

Regulation 18

Regulations

2015 (contents

resolution plan) 7. Amendment

Regulation 21

Regulations

2015 (resolution plans for institutions that are part

a group) 8. Amendment

Regulation 24

Regulations

2015 (assessment

group resolution plan) 9. Amendment

Regulation 27

Regulations

2015 (assessment

resolvability for groups)

  1. Power to prohibit certain distributions
  2. Amendment

Regulation 28

Regulations

2015 (powers to address or remove impediments to resolvability) 12. Amendment

Regulation 29

Regulations

2015 (powers to address or remove impediments to resolvability: group treatment) 13. Amendment

Regulation 62

Regulations

2015 (conditions for resolution)

  1. Conditions for resolution with regard to a central body and credit institutions permanently affiliated to a central body
  2. Insolvency proceedings in respect

institutions and entities that are not subject to resolution action 16. Amendment

Regulation 63

Regulations

2015 (conditions for resolution with regard to financial institutions and holding companies) 17. Power to suspend certain obligations 18. Amendment

Regulation 65

Regulations

2015 (valuation for the purposes

resolution) 19. Amendment

Regulation 68

Regulations

2015 (general principles

resolution tools) 20. Amendment

Regulation 80

Regulations

2015 (scope

bail-in tool) 21. Selling

subordinated eligible liabilities to retail clients

  1. New provisions in relation to own funds and eligible liabilities
  2. Amendment

Regulation 84A

Regulations

2015 24. Amendment

Regulation 85

Regulations

2015 (assessment

amount

bail-in) 25. Amendment

Regulation 86

Regulations

2015 (treatment

shareholders in bail-in or write-down or conversion

capital instruments) 26. Amendment

Regulation 87

Regulations

2015 (sequence

write-down and conversion) 27. Contractual recognition

bail-in 28. Amendment

title to Chapter 4

Part 4

Regulations

2015 29. Amendment

Regulation 95

Regulations

2015 (requirement to write-down or convert capital instruments) 30. Amendment

Regulation 96

Regulations

2015 (provisions governing write-down or conversion

capital instruments) 31. Amendment

Regulation 97

Regulations

2015 (authorities responsible for determination) 32. Amendment

Regulation 98

Regulations

2015 (consolidated application: procedure for determination) 33. Amendment

Regulation 111

Regulations

2015 (powers

Court in making resolution order — general) 34. Amendment

Regulation 126

Regulations

2015 (power

another Member State to enforce crisis management measures or crisis prevention measures) 35. Amendment

Regulation 128

Regulations

2015 (exclusion

certain contractual terms in early intervention and resolution) 36. Amendment

Regulation 129

Regulations

2015 (power to suspend certain obligations) 37. Amendment

Regulation 130

Regulations

2015 (power to restrict enforcement

security interests) 38. Amendment

Regulation 131

Regulations

2015 (power to temporarily suspend termination rights) 39. Contractual recognition

resolution stay powers 40. Amendment

Regulation 152

Regulations

2015 (resolution colleges) 41. Amendment

Regulation 153

Regulations

2015 (European resolution colleges) 42. Amendment

Regulation 174

Regulations

2015 (penalties: specific provisions) 43. Amendment

Schedule to Regulations

2015

  1. Revocation
  2. Amendment

Regulation 2

European Communities (Settlement Finality) Regulations 2010 46. Amendment

Companies Act 2014 I, PASCHAL DONOHOE, Minister for Finance, in exercise

the powers conferred on me by section 3

the European Communities Act 1972 (No. 27

1972) and for the purpose

giving effect to Directive (EU) 2019/879

the European Parliament and

the Council

20 May 20191 amending Directive 2014/59/EU2 as regards the loss-absorbing and recapitalisation capacity

credit institutions and investment firms and Directive 98/26/EC3 , hereby make the following regulations: Citation and commencement 1.

(1)These Regulations may be cited as the European Union (Bank Recovery and Resolution) (Amendment) Regulations 2020.
(2)These Regulations come into operation on 28 December
  1. Definition
  2. In these Regulations “Regulations

2015” means the European Union (Bank Recovery and Resolution) Regulations 2015 ( S.I. No. 289

2015 ). Amendment

Regulation 3

Regulations

2015 (interpretation) 3. Regulation 3

the Regulations

2015 is amended in paragraph

(1)— (a) in the definition

“aggregate amount”, by the substitution

“bail-inable liabilities” for “eligible securities”, (b) by the substitution

the following definition for the definition

“Bank Recovery and Resolution Directive”: “ ‘Bank Recovery and Resolution Directive’ means Directive 2014/59/EU

the European Parliament and

the Council

15 May 20144 establishing a framework for the recovery and resolution

credit institutions and investment firms, as amended by Directive (EU) 2017/2399

the European Parliament and

the Council

12 December 20175 and Directive (EU) 2019/879

the European Parliament and

the Council

20 May 20196 ;”, (c) by the substitution

the following definition for the definition

“eligible liabilities”: “ ‘eligible liabilities’ means bail-inable liabilities that satisfy, as applicable, the conditions

Regulation 80D or 80H

(6)(a) and Tier 2 instruments that meet the conditions

point (b)

Article 72a

(1)

the Union Capital Requirements Regulation;”, (d) by the substitution

the following for the definition

“subsidiary”: “ ‘subsidiary’ means a subsidiary as defined in point

(16)

Article 4

(1)

the Union Capital Requirements Regulation, and for the purpose

applying Regulations 14, 21, 28, 29, 80B to 80O, 95 to 98, 155 and 156 to resolution groups referred to in subparagraph (b)

the definition in this paragraph

‘resolution group’, includes, where and as appropriate, credit institutions that are permanently affiliated to a central body, the central body itself, and their respective subsidiaries, taking into account the way in which such resolution groups comply with Regulation 80G

(3);”, and (e) by the insertion

the following definitions: “ ‘bail-inable liabilities’ means the liabilities and capital instruments that do not qualify as Common Equity Tier 1, Additional Tier 1 instruments or Tier 2 instruments

an institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)that are not excluded from the scope

the bail-in tool by virtue

Regulation 80

(2); ‘combined buffer requirement’ has the meaning assigned to it in Regulation 115(g)

the Capital Requirements Regulations; ‘Common Equity Tier 1 capital’ means Common Equity Tier 1 capital as calculated in accordance with Article 50

the Union Capital Requirements Regulation; ‘ESMA’ means the European Securities and Markets Authority (established by Regulation (EU) No 1095/20107 ); ‘global systemically important institution’ or ‘G-SII’ means a G-SII as defined in point

(133)

Article 4

(1)

the Union Capital Requirements Regulation; ‘material subsidiary’ means a material subsidiary as defined in point

(135)

Article 4

(1)

the Union Capital Requirements Regulation; ‘resolution entity’ means — (a) a legal person established in the Union, which, in accordance with Regulation 21, is identified by the resolution authority as an entity in respect

which the resolution plan provides for resolution action, or (b) an institution that is not part

a group that is subject to consolidated supervision pursuant to Articles 111 and 112

the Capital Requirements Directive, in respect

which the resolution plan drawn up pursuant to Article 10

the Bank Recovery and Resolution Directive provides for resolution action; ‘resolution group’ means — (

  1. a)a resolution entity and its subsidiaries that are not — (
  2. i)resolution entities themselves, (
  3. ii)subsidiaries

other resolution entities, or (iii) entities established in a third country that are not included in the resolution group in accordance with the resolution plan and their subsidiaries, or (b) credit institutions permanently affiliated to a central body and the central body itself when at least one

those credit institutions or the central body is a resolution entity, and their respective subsidiaries; ‘subordinated eligible instruments’ means instruments that meet all

the conditions referred to in Article 72a

the Union Capital Requirements Regulation other than paragraphs

(3)to
(5)

Article 72b

that Regulation;”. Amendment

Regulation 13

Regulations

2015 (assessment

recovery plans) 4. Regulation 13

the Regulations

2015 is amended in paragraph

(4)by the substitution

“may examine” for “shall examine”. Amendment

Regulation 17

Regulations

2015 (resolution plans) 5. Regulation 17

the Regulations

2015 is amended — (a) by the insertion

the following paragraph after paragraph

(7): “(7A) The review

resolution plans referred to in paragraphs

(6)and
(7)shall be carried out after the implementation

resolution actions or the exercise

powers referred to in Regulation 95.”, and (b) by the insertion

the following paragraph after paragraph

(11): “
(12)When setting the deadline referred to in Regulation 18
(2)(o) and the timeline referred to in Regulation 18
(2)(p) in the circumstances referred to in paragraph (7A), the resolution authority shall take into account any deadline that may be set to comply with the requirement referred to in Regulation 92B

the Capital Requirements Regulations.”. Amendment

Regulation 18

Regulations

2015 (contents

resolution plan) 6. Regulation 18

(2)

the Regulations

2015 is amended by the substitution

the following subparagraphs for subparagraphs (

  1. o)and (p): “(
  2. o)the requirements referred to in Regulations 80G and 80H and a deadline to reach that level in accordance with Regulation 80O; (
  3. p)where the resolution authority applies paragraphs

(7)to
(11), paragraphs
(12)and
(13), or Regulation 80D
(16), a timeline for compliance by the resolution entity in accordance with Regulation 80O;”. Amendment

Regulation 21

Regulations

2015 (resolution plans for institutions that are part

a group) 7. The following Regulation is substituted for Regulation 21

the Regulations

2015: “21.

(1)Where the resolution authority is the group-level resolution authority it shall — (a) together with the Union resolution authorities

subsidiaries

the group outside the State, and (b) having consulted with the Union resolution authorities

significant branches

the group outside the State in so far as is relevant to the significant branch, prepare the group resolution plan on the basis

information provided to it in accordance with Regulation 20.

(2)A group resolution plan shall identify measures to be taken in respect

— (

  1. a)the Union parent undertaking, (
  2. b)subsidiaries

the group established in the Union, (c) entities referred to in Regulation 2

(1)(
  1. c)to (i), and (
  2. d)subject to Part 6, subsidiaries

the group established outside the Union.

(3)The group resolution plan shall, in accordance with the measures referred to in paragraph
(2), identify in respect

the group — (

  1. a)the resolution entities, and (
  2. b)the resolution groups.

(4)In addition to the matters set out in Regulation 18, a group resolution plan shall - (
  1. a)set out — (
  2. i)the resolution actions that are to be taken for resolution entities in the scenarios referred to in Regulation 17
(9), and (ii) the implications

the resolution actions referred to in clause (i) in respect

— (I) other group entities referred to in Regulation 2

(1)(
  1. b)to (i), (II) the parent undertaking, and (III) subsidiary institutions, (
  2. b)where a group comprises more than one resolution group, set out the resolution actions that are to be taken for the resolution entities

each resolution group and the implications

those actions on both

the following: (

  1. i)other group entities that belong to the same resolution group; (
  2. ii)other resolution groups, (
  3. c)examine the extent to which the resolution tools could be applied, and the resolution powers exercised, with respect to resolution entities established in the Union in a coordinated manner, including measures to facilitate the purchase by a third party

the group as a whole,

separate business lines or activities that are provided by a number

group entities, or

particular group entities or resolution groups, and identify any potential impediments to a coordinated resolution, (

  1. d)where a group includes entities incorporated in third countries, identify — (
  2. i)the implications for the resolution

group entities within the Union, and (

  1. ii)appropriate arrangements for cooperation and coordination with the relevant authorities in those third countries, (
  2. e)identify measures, including the legal and economic separation

particular functions or business lines, that are necessary to facilitate group resolution when the conditions for resolution are met, (

  1. f)set out any additional actions, not referred to in these Regulations, which the relevant resolution authorities intend to take in relation to the entities within each resolution group, and (
  2. g)identify how the group resolution actions could be financed and, where the financing arrangement would be required, set out principles, in accordance with paragraph

(5), for sharing responsibility for that financing between sources

funding in different Member States.

(5)The principles referred to in paragraph
(4)(
  1. g)shall be based on equitable and balanced criteria and shall take into account in particular — (
  2. a)Regulation 172
(5), and (b) the impact on financial stability in all Member States concerned.
(6)In preparing and assessing a group resolution plan and assessing the resolvability

the group, the resolution authority shall not assume any

the following: (a) any extraordinary public financial support, other than through the use

the Fund; (

  1. b)any emergency liquidity assistance provided by the Bank or by another central bank; (
  2. c)any liquidity assistance provided by the Bank or by another central bank under non-standard collateralisation, duration and interest rate terms.

(7)When drawing up and updating a group resolution plan, the resolution authority shall also carry out an assessment

the resolvability

the group pursuant to Regulation 27 and shall include a detailed description

this assessment

resolvability in the group resolution plan.

(8)When preparing a group resolution plan, the resolution authority shall, together with Union resolution authorities

subsidiaries outside the State, have regard to the need to ensure that the group resolution plan does not have a disproportionate impact on any Member State.”. Amendment

Regulation 24

Regulations

2015 (assessment

group resolution plan) 8. Regulation 24

the Regulations

2015 is amended — (a) by the insertion

the following paragraph after paragraph

(1): “(1A) Where a group is composed

more than one resolution group, the planning

the resolution actions referred to in subparagraph (b)

Regulation 21

(4)shall be included in a joint decision referred to in paragraph
(1).”, (b) by the substitution

the following paragraph for paragraph

(9): “
(9)Where the Union resolution authorities and the resolution authority have not made a joint decision within four months under paragraph
(8), the resolution authority, where it is responsible for a subsidiary and disagrees with the group resolution plan, shall make its own decision and, where appropriate, identify the resolution entity and draw up and maintain a resolution plan for the resolution group composed

entities under its jurisdiction.”, and (c) by the substitution

the following paragraph for paragraph

(10): “
(10)A decision under paragraph
(9)shall — (
  1. a)be fully substantiated, (
  2. b)set out the reasons for the disagreement with the proposed group resolution plan, (
  3. c)take into account the views and reservations

the other resolution authorities and competent authorities, and (d) be notified to the other members

the resolution college by the resolution authority.”. Amendment

Regulation 27

Regulations

2015 (assessment

resolvability for groups) 9. Regulation 27

the Regulations

2015 is amended — (a) by the substitution

the following paragraph for paragraph

(3): “
(3)A group shall be considered resolvable if the resolution authority, together with the relevant Union resolution authorities

subsidiaries

the group, assesses that it is feasible and credible that the resolution authorities would be capable

— (

  1. a)either — (
  2. i)winding up group entities under normal insolvency proceedings, or (
  3. ii)taking resolution action in respect

that group by applying resolution tools to, and exercising resolution powers with respect to, resolution entities

that group, (b) avoiding to the maximum extent possible any significant adverse consequences for the financial system

the State or other Member State or the Union, including broader financial instability or system-wide events, and (c) ensuring the continuity

any critical functions carried out by those group entities, where they can easily be separated in a timely manner, or by other means.”, and (b) by the insertion

the following paragraph after paragraph

(7): “
(8)(a) Where a group is composed

more than one resolution group, the resolution authority shall assess the resolvability

each resolution group in accordance with this Regulation. (

  1. b)The resolution authority shall carry out the assessment referred to in subparagraph (
  2. a)– (
  3. i)in addition to the assessment

the resolvability

the entire group, and (ii) in compliance with the decision-making procedure set out in Regulations 22 to 24.”. Power to prohibit certain distributions 10. The following Regulation is inserted after Regulation 27

the Regulations

2015: “27A.

(1)(a) This paragraph applies where an entity referred to in Regulation 2
(1)meets the combined buffer requirement when considered in addition to each

the requirements referred to in Regulation 129A

(1)(a), (b) and (c)

the Capital Requirements Regulations, but fails to meet the combined buffer requirement when considered in addition to the requirements referred to in Regulations 80E and 80F, when calculated in accordance with Regulation 80B

(2)(a). (b) Where this paragraph applies, the resolution authority, where it is the resolution authority

the entity concerned, may, in accordance with paragraphs

(2)and
(3), prohibit an entity from distributing more than the Maximum Distributable Amount related to the minimum requirement for own funds and eligible liabilities (in this Regulation referred to as ‘M-MDA’), calculated in accordance with paragraph
(4), through any

the following actions: (

  1. i)making a distribution in connection with Common Equity Tier 1 capital; (
  2. ii)creating an obligation to pay variable remuneration or discretionary pension benefits, or to pay variable remuneration if the obligation to pay was created at a time when the entity failed to meet the combined buffer requirement; (iii) making payments on Additional Tier 1 instruments. (
  3. c)Where this paragraph applies in respect

an entity, the entity shall immediately notify the resolution authority that this paragraph so applies.

(2)(a) Where paragraph
(1)applies in respect

an entity, the resolution authority

the entity, after consulting with the competent authority, shall, without unnecessary delay, assess whether to exercise the power referred to in paragraph

(1), taking into account all

the following elements: (i) the reason, duration and magnitude

the failure and its impact on the resolvability

the entity; (ii) the development

the entity’s financial situation and the likelihood

it satisfying, in the foreseeable future, the condition referred to in Regulation 62

(1)(a); (iii) the prospect that the entity will be able to ensure compliance with the requirements referred to in paragraph
(1)within a reasonable timeframe; (iv) where the entity is unable to replace liabilities that no longer meet the eligibility or maturity criteria laid down in Articles 72b and 72c

the Union Capital Requirements Regulation, or in Regulation 80D or 80H

(6), if that inability is entity-specific or is due to market-wide disturbance; (v) whether the exercise

the power referred to in paragraph

(1)is the most adequate and proportionate means

addressing the situation

the entity, taking into account its potential impact on both the financing conditions and resolvability

the entity concerned. (b) The resolution authority shall repeat its assessment

whether to exercise the power referred to in paragraph

(1)at least every month for as long as paragraph
(1)applies in respect

the entity concerned.

(3)(a) If the resolution authority finds that paragraph
(1)continues to apply in respect

an entity 9 months after the entity has notified the resolution authority in accordance with paragraph

(1)(c), the resolution authority, after consulting with the competent authority, shall exercise the power referred to in paragraph
(1), except where the resolution authority finds, following an assessment, that at least two

the following conditions are satisfied: (i) the failure referred to in paragraph

(1)(a) is due to a serious disturbance to the functioning

financial markets which leads to broad-based financial market stress across several segments

financial markets; (

  1. ii)the disturbance referred to in clause (
  2. i)not only results in the increased price volatility

the own funds instruments and eligible liabilities instruments

the entity or increased costs for the entity, but also leads to a full or partial closure

markets which prevents the entity from issuing own funds instruments and eligible liabilities instruments on those markets; (iii) the market closure referred to in clause (

  1. ii)is observed not only for the concerned entity, but also for several other entities; (
  2. iv)the disturbance referred to in clause (
  3. i)prevents the concerned entity from issuing own funds instruments and eligible liabilities instruments sufficient to remedy the failure; (
  4. v)an exercise

the power referred to in paragraph

(1)leads to negative spill-over effects for part

the banking sector, thereby potentially undermining financial stability. (

  1. b)Where the exception referred to in subparagraph (
  2. a)applies, the resolution authority shall notify the competent authority

its decision and shall explain its assessment in writing. (c) The resolution authority shall, every month, repeat its assessment

whether the exception referred to in subparagraph (a) applies.

(4)(a) The M-MDA shall be calculated by multiplying the sum calculated in accordance with paragraph
(5)by the factor determined in accordance with paragraph
(6). (b) The M-MDA shall be reduced by any amount resulting from any

the actions referred to in clause (i), (ii) or (iii)

paragraph

(1)(b).
(5)The sum to be multiplied in accordance with paragraph
(4)shall consist

— (a) any interim profits not included in Common Equity Tier 1 capital pursuant to Article 26

(2)

the Union Capital Requirements Regulation, net

any distribution

profits or any payment resulting from the actions referred to in clause (i), (ii) or (iii)

paragraph

(1)(b), plus (b) any year-end profits not included in Common Equity Tier 1 capital pursuant to Article 26
(2)

the Union Capital Requirements Regulation, net

any distribution

profits or any payment resulting from the actions referred to in clause (i), (ii) or (iii)

paragraph

(1)(b), minus (
  1. c)amounts which would be payable by tax if the items specified in subparagraphs (
  2. a)and (
  3. b)were to be retained.
(6)(a) The factor referred to in paragraph
(4)shall be determined as follows: (i) where the Common Equity Tier 1 capital maintained by the entity which is not used to meet any

the requirements set out in Article 92a

the Union Capital Requirements Regulation and in Regulations 80E and 80F, expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation, is within the first (that is, the lowest) quartile

the combined buffer requirement, the factor shall be 0; (ii) where the Common Equity Tier 1 capital maintained by the entity which is not used to meet any

the requirements set out in Article 92a

the Union Capital Requirements Regulation and in Regulations 80E and 80F, expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation, is within the second quartile

the combined buffer requirement, the factor shall be 0.2; (iii) where the Common Equity Tier 1 capital maintained by the entity which is not used to meet the requirements set out in Article 92a

the Union Capital Requirements Regulation and in Regulations 80E and 80F, expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation, is within the third quartile

the combined buffer requirement, the factor shall be 0.4; (iv) where the Common Equity Tier 1 capital maintained by the entity which is not used to meet the requirements set out in Article 92a

the Union Capital Requirements Regulation and in Regulations 80E and 80F, expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation, is within the fourth (that is, the highest) quartile

the combined buffer requirement, the factor shall be 0.6. (b) The lower and upper bounds

each quartile

the combined buffer requirement shall be calculated as follows: where “Qn” = the ordinal number

the quartile concerned.”. Amendment

Regulation 28

Regulations

2015 (powers to address or remove impediments to resolvability) 11. The following Regulation is substituted for Regulation 28

the Regulations

2015: “28.

(1)When, pursuant to an assessment

resolvability for an entity carried out in accordance with Regulations 26 and 27, the resolution authority, after consulting with the competent authority, determines that there are substantive impediments to the resolvability

that entity, that resolution authority shall notify, in writing, that determination to the entity concerned, to the competent authority and to the resolution authorities

the jurisdictions in which significant branches are located.

(2)The entity shall, within four months

the date

receipt

a notification made in accordance with paragraph

(1), propose to the resolution authority possible measures to address or remove the substantive impediments identified in the notification.
(3)(a) The entity shall, within 2 weeks

the date

receipt

a notification made in accordance with paragraph

(1), propose to the resolution authority possible measures and the timeline for their implementation to ensure that the entity complies with Regulation 80G or 80H and the combined buffer requirement, where a substantive impediment to resolvability is due to either

the following situations: (i) the entity meets the combined buffer requirement when considered in addition to each

the requirements referred to in Regulation 129A

(1)(a), (b) and (c)

the Capital Requirements Regulations, but it does not meet the combined buffer requirement when considered in addition to the requirements referred to in Regulation 80E and 80F when calculated in accordance with Regulation 80B

(2)(a); (ii) the entity does not meet the requirements referred to in Articles 92a and 494

the Union Capital Requirements Regulation or the requirements referred to in Regulations 80E and 80F. (b) The timeline for the implementation

measures proposed by the entity under subparagraph (a) shall take into account the reasons for the substantive impediment.

(4)The resolution authority, after consulting with the competent authority, shall assess whether the measures proposed under paragraph
(2)or
(3)(a), as the case may be, effectively address or remove the substantive impediment concerned.
(5)(a) Where the resolution authority finds that the measures proposed by an entity in accordance with paragraph
(2)or
(3)(a), as the case may be, do not effectively reduce or remove the impediments concerned, it shall, either directly or indirectly through the competent authority, direct the entity to take alternative measures that may achieve that objective, and notify, in writing, those alternative measures to the entity. (b) On receipt

a notification under subparagraph (a), the entity shall propose, within one month

the date

such receipt, a plan in writing to comply with the alternative measures.

(6)(a) In identifying the alternative measures referred to in paragraph
(5), the resolution authority shall demonstrate — (i) how the measures proposed by the entity under paragraph
(2)or
(3)(a), as the case may be, would not be sufficient to remove the impediments to resolvability, and (
  1. ii)how the alternative measures proposed are proportionate in removing those impediments. (
  2. b)The resolution authority shall take into account — (
  3. i)any threat the impediments to resolvability pose to financial stability, and (
  4. ii)the effect

the alternative measures proposed on the business

the entity, its stability and its ability to contribute to the economy.

(7)Before identifying any alternative measure referred to in paragraph
(5), the resolution authority, after consulting with the competent authority and, where appropriate, the national macro-prudential authority, shall duly consider the potential effect

those measures on the particular entity, on the internal market for financial services, and on the financial stability in other Member States and in the Union as a whole.

(8)Any determination under paragraph
(1)or direction under paragraph
(5)shall be supported by reasons for the determination or direction, as the case may be, and, in the case

a direction under paragraph

(5), shall indicate how the decision complies with the requirement for proportionate application set out in paragraph
(6).
(9)The requirement for the resolution authority to prepare resolution plans and reach a joint decision on group resolution plans in Regulations 17
(1)to
(4)and 24
(1)to
(3)shall be suspended following a notification referred to in paragraph
(1)until either — (a) the measures proposed by the entity pursuant to paragraph
(2)or
(3)(a), as the case may be, are accepted by the resolution authority, or (b) the resolution authority directs, pursuant to paragraph
(5), the entity to take alternative measures.
(10)For the purposes

paragraph

(5), the resolution authority may give a direction requiring the taking

one or more than one

the following measures: (

  1. a)that the entity revise any intra-group financing agreement or review the absence thereof; (
  2. b)that the entity put in place service agreements, whether with other group entities or third parties, to cover the provision

critical functions; (

  1. c)that the entity limit its maximum individual or aggregate exposures; (
  2. d)that the entity provide additional information relevant for resolution purposes, including through regular reporting requirements; (
  3. e)that the entity divest specific assets; (
  4. f)that the entity limit or cease specific existing or proposed activities; (
  5. g)that the entity restrict or prevent the development

new or existing business lines or sale

new or existing products; (h) that the entity make changes to legal or operational structures

the entity or any group entity, either directly or indirectly under its control, in order to reduce complexity and ensure that critical functions can be legally and operationally separated from other functions through the application

the resolution tools; (

  1. i)that an entity or a parent undertaking establish a parent financial holding company in a Member State or a Union parent financial holding company; (
  2. j)that an institution or an entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)submit a plan to restore compliance with the requirements

Regulation 80G or 80H, expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation and, where applicable, with the combined buffer requirement and with the requirements referred to in Regulations 80G and 80H expressed as a percentage

the total exposure measure referred to in Articles 429 and 429a

the Union Capital Requirements Regulation; (k) that an institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)issue eligible liabilities to meet the requirements

Regulation 80G or 80H; (l) that an institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)take other steps to meet the minimum requirement for own funds and eligible liabilities under Regulation 80G or 80H, including in particular to attempt to renegotiate any eligible liability, Additional Tier 1 instrument or Tier 2 instrument it has issued, with a view to ensuring that any decision

the resolution authority to write down or convert that liability or instrument would be effected under the law

the jurisdiction governing that liability or instrument; (m) for the purpose

ensuring ongoing compliance with Regulation 80G or 80H, that an institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)change the maturity profile

— (i) own funds instruments, after having obtained the agreement

the competent authority, and (ii) eligible liabilities referred to in Regulations 80D and 80H

(6)(a); (n) where an entity is the subsidiary

a mixed-activity holding company, that the mixed-activity holding company set up a separate financial holding company to control the entity, if necessary in order to facilitate the resolution

the entity and to avoid the application

the resolution tools and the exercise

the powers referred to in Part 4 having an adverse effect on the non-financial part

the group.

(11)Each

the following is an appealable decision for the purposes

Part VII

A

the Act

1942: (a) a determination under paragraph

(1); (b) an assessment under paragraph
(4); (c) a direction under paragraph
(5).”. Amendment

Regulation 29

Regulations

2015 (powers to address or remove impediments to resolvability: group treatment) 12. The following Regulation is substituted for Regulation 29

the Regulations

2015: “29.

(1)Where the resolution authority is the group-level resolution authority it shall, together with the relevant Union resolution authorities

subsidiaries, consider the assessment under Regulation 27 within the resolution college and shall take all reasonable steps to reach a joint decision on the application

measures identified in accordance with Regulation 28

(5)and
(6)in relation to all resolution entities and their subsidiaries that are entities referred to in Regulation 2
(1)(
  1. b)to (
  2. i)and are part

the group.

(2)Before considering the assessment

resolvability under paragraph

(1), the resolution authority shall, together with the relevant Union resolution authorities, consult with the supervisory college and the Union resolution authorities

any jurisdictions in which significant branches are located in so far as is relevant to the significant branch.

(3)(
  1. a)Where the resolution authority is the group-level resolution authority, it shall, subject to subparagraph (
  2. b)and paragraph
(13), prepare a report analysing — (i) the substantive impediments to the effective application

the resolution tools, and (ii) the exercise

the resolution powers in relation to the group and also in relation to resolution groups where a group is composed

more than one resolution group. (b) Where an impediment to the resolvability

the group is due to a situation

a group entity referred to in Regulation 28

(3), the resolution authority shall notify its assessment

that impediment to the parent undertaking after consulting with the resolution authority

the resolution entity and the resolution authorities

its subsidiary institutions.

(4)The report referred to in paragraph
(3)shall consider the impact on the group’s business model and recommend any proportionate and targeted measures that, in the resolution authority’s opinion, are necessary or appropriate to remove those impediments.
(5)The resolution authority shall prepare the report referred to in paragraph
(3)in cooperation with the consolidating supervisor and the European Banking Authority in accordance with Article 25
(1)

Regulation (EU) No 1093/2010, after consulting the Union competent authorities concerned.

(6)The resolution authority shall submit the report referred to in paragraph
(3)to — (a) the parent undertaking

the group concerned, (b) the Union resolution authorities

subsidiaries to be provided by them to the subsidiaries under their remit, and (c) the Union resolution authorities

any jurisdictions in which significant branches are located.

(7)Where the resolution authority is the resolution authority

a subsidiary for the purposes

the Bank Recovery and Resolution Directive, and a group-level resolution authority submits a report to the resolution authority in accordance with Article 18

(2)

the Bank Recovery and Resolution Directive, the resolution authority shall transmit that report to the subsidiary.

(8)Within four months

the date

receipt

the report referred to in paragraph

(3), the parent undertaking may — (
  1. a)submit observations, and (
  2. b)propose alternative measures to remedy the impediments identified in the report, to the resolution authority.
(9)Where the impediments identified in the report are due to a situation

a group entity referred to in Regulation 28

(3), the parent undertaking shall, within 2 weeks

the date

receipt

a notification under paragraph

(3)(b), propose to the resolution authority possible measures and the timeline for their implementation to ensure that the group entity complies — (a) with the requirements referred to in Article 45e or 45f

the Bank Recovery and Resolution Directive expressed as a percentage

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation, and (b) where applicable, with the combined buffer requirement, and with the requirements referred to in Article 45e and 45f

the Bank Recovery and Resolution Directive expressed as a percentage

the total exposure measure referred to in Articles 429 and 429a

the Union Capital Requirements Regulation.

(10)(a) The timeline for the implementation

measures proposed under paragraph

(9)shall take into account the reasons for the substantive impediment. (b) The resolution authority, after consulting with the competent authority, shall assess whether the measures proposed under paragraph
(9)effectively address or remove the substantive impediment.
(11)The resolution authority shall communicate any measure proposed by the parent undertaking under paragraph
(8)(b) or
(9), as the case may be, to — (
  1. a)the competent authority, (
  2. b)the European Banking Authority, (
  3. c)the Union resolution authorities

subsidiaries

the group, and (d) the Union resolution authorities

any jurisdictions in which significant branches are located in so far as is relevant to the significant branch.

(12)Following consultation with the Union competent authorities

subsidiaries and the Union resolution authorities

any jurisdictions in which significant branches are located, in so far as is relevant to the significant branch, the resolution authority shall, subject to paragraph

(13), do everything within its power to reach a joint decision with the Union resolution authorities

the subsidiaries within the resolution college regarding the identification

substantive impediments and, if necessary, the assessment

the measures proposed by the parent undertaking and the measures required by the authorities to address or remove the impediments, which shall take into account the potential impact

the measures in all Member States where the group operates.

(13)(a) The joint decision referred to in paragraph
(12)shall be reached within four months

the submission

any observations by the parent undertaking in accordance with paragraph

(8)(a). (b) Where the parent undertaking has not submitted any observations, the joint decision shall be reached within one month from the expiry

the period referred to in paragraph

(8). (c) The joint decision referred to in paragraph
(12)concerning the impediment to resolvability due to a situation referred to in Regulation 28
(3)shall be reached within 2 weeks

the submission

any observations by the parent undertaking in accordance with paragraph

(8)(a).
(14)Where a joint decision referred to in paragraph
(12)is reached, the resolution authority shall provide the decision and reasons for the decision, in writing, to the parent undertaking.
(15)The resolution authority, whether in its role as — (
  1. a)a group-level resolution authority, or (
  2. b)a resolution authority for a subsidiary for the purposes

the Bank Recovery and Resolution Directive, may request the European Banking Authority to assist — (i) in reaching a joint decision referred to in paragraph

(12)in accordance with point (c)

the second paragraph

Article 31

Regulation (EU) No 1093/2010, or (

  1. ii)where the joint decision referred to in subparagraph (
  2. a)concerns any measure referred to in subparagraph (h), (
  3. i)or (l)

Regulation 28

(10), under Article 19

Regulation (EU) No 1093/2010.

(16)Where the resolution authority is the group-level resolution authority and it has not reached a joint decision referred to in paragraph
(12)within the period referred to in paragraph
(13)(a), (b) or (c), as the case may be, it shall make its own decision on the appropriate measures to be taken under Regulation 28
(5)at the group level.
(17)The resolution authority’s decision under paragraph
(16)shall — (a) be fully reasoned and take into account the views and reservations

the relevant Union resolution authorities, and (b) be provided by the resolution authority to the Union parent undertaking.

(18)Where, at the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, a matter referred to in Article 18
(9)

the Bank Recovery and Resolution Directive has been referred to the European Banking Authority in accordance with Article 19

Regulation (EU) No 1093/2010, then, where the resolution authority is the group-level resolution authority, it shall defer its decision and await any decision that the European Banking Authority may take in accordance with Article 19

(3)

that Regulation, and shall take its decision in accordance with the decision

the European Banking Authority.

(19)(a) The period referred to in paragraph
(13)(a), (b) or (c), as the case may be, shall be deemed to be the conciliation period within the meaning

Regulation (EU) No 1093/2010. (b) The resolution authority shall not refer a matter to the European Banking Authority, under paragraph

(15), after the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, or after a joint decision referred to in paragraph
(12)has been reached. (c) In the absence

a decision from the European Banking Authority, the decision

the resolution authority shall apply.

(20)Where the resolution authority is the resolution authority

the relevant resolution entity and it has not reached a joint decision referred to in paragraph

(12)within the period referred to in paragraph
(13)(a), (b) or (c), as the case may be, it shall make its own decision on the appropriate measures to be taken under Regulation 28
(5)at the resolution group level.
(21)The resolution authority’s decision under paragraph
(20)shall — (a) be fully reasoned and take into account the views and reservations

the relevant resolution authorities

other entities

the same resolution group and the group-level resolution authority, and (b) be provided by the resolution authority to the resolution entity.

(22)Where, at the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, a matter referred to in Article 18
(9)

the Bank Recovery and Resolution Directive has been referred to the European Banking Authority in accordance with Article 19

Regulation (EU) No 1093/2010, then, where the resolution authority is the resolution authority

the resolution entity, it shall defer its decision and await any decision that the European Banking Authority may take in accordance with Article 19

(3)

that Regulation, and shall take its decision in accordance with the decision

the European Banking Authority.

(23)(a) The period referred to in paragraph
(13)(a), (b) or (c), as the case may be, shall be deemed to be the conciliation period within the meaning

Regulation (EU) No 1093/2010. (b) The resolution authority shall not refer a matter to the European Banking Authority, under paragraph

(15), after the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, or after a joint decision referred to in paragraph
(12)has been reached. (c) In the absence

a decision from the European Banking Authority, the decision

the resolution authority

the resolution entity shall apply.

(24)Where the resolution authority is the resolution authority

a subsidiary that is not a resolution entity and it has not reached a joint decision referred to in paragraph

(12), it shall make its own decision on the appropriate measures to be taken by subsidiaries under Regulation 28
(5)at individual level.
(25)The resolution authority’s decision under paragraph
(24)shall — (a) be fully reasoned and take into account the views and reservations

the relevant resolution authorities, and (b) be provided by the resolution authority to the relevant subsidiary, the resolution entity

the same resolution group, the resolution authority

that resolution entity and, where different, the group-level resolution authority.

(26)Where, at the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, a matter referred to in Article 18
(9)

the Bank Recovery and Resolution Directive has been referred to the European Banking Authority in accordance with Article 19

Regulation (EU) No 1093/2010, then, where the resolution authority is the resolution authority

a subsidiary that is not a resolution entity, it shall defer its decision and await any decision that the European Banking Authority may take in accordance with Article 19

(3)

that Regulation, and shall take its decision in accordance with the decision

the European Banking Authority.

(27)(a) The period referred to in paragraph
(13)(a), (b) or (c), as the case may be, shall be deemed to be the conciliation period within the meaning

Regulation (EU) No 1093/2010. (b) The resolution authority shall not refer a matter to the European Banking Authority, under paragraph

(15), after the end

the period referred to in paragraph

(13)(a), (b) or (c), as the case may be, or after a joint decision referred to in paragraph
(12)has been reached. (c) In the absence

a decision from the European Banking Authority, the decision

the resolution authority shall apply.

(28)Any joint decision referred to in paragraph
(12)or decision taken by a Union resolution authority in the absence

a joint decision shall be recognised as conclusive and applied by the resolution authority.

(29)A decision by the resolution authority under paragraph
(16),
(20)or
(24)is an appealable decision for the purposes

Part VII

A

the Act

1942.”. Amendment

Regulation 62

Regulations

2015 (conditions for resolution) 13. Regulation 62

(1)

the Regulations

2015 is amended in subparagraph (b) by the insertion

“and eligible liabilities” after “relevant capital instruments”. Conditions for resolution with regard to a central body and credit institutions permanently affiliated to a central body 14. The following Regulation is inserted after Regulation 62

the Regulations

2015: “62A. The resolution authority may make a proposed resolution order in relation to a central body and all credit institutions permanently affiliated to it that are part

the same resolution group when that resolution group complies as a whole with the conditions set out in Regulation 62

(1)(a), (b) and (c).”. Insolvency proceedings in respect

institutions and entities that are not subject to resolution action 15. The following Regulation is inserted after Regulation 62A (inserted by Regulation 14)

the Regulations

2015: “62B. Where, in relation to an institution or entity referred to in Regulation 2

(1)(b) to (i), the resolution authority considers that the conditions in Regulation 62
(1)(
  1. a)and (
  2. b)are met, but that a resolution action would not be in the public interest in accordance with Regulation 62
(1)(c), the institution or entity, as the case may be, shall be wound up in an orderly manner under normal insolvency proceedings.”. Amendment

Regulation 63

Regulations

2015 (conditions for resolution with regard to financial institutions and holding companies) 16. Regulation 63

the Regulations

2015 is amended — (a) by the substitution

the following paragraphs for paragraphs

(2)to
(4): “
(2)The resolution authority shall, subject to Regulation 9
(2), make a proposed resolution order in relation to an entity referred to in Regulation 2
(1)(
  1. c)to (
  2. i)where the conditions set out in Regulation 62
(1)(a), (
  1. b)and (
  2. c)are met with regard to that entity.
(3)Where any subsidiary institutions

a mixed-activity holding company are held directly or indirectly by an intermediate financial holding company – (

  1. a)the resolution plan shall provide that the intermediate financial holding company is identified as a resolution entity, and (
  2. b)the resolution authority — (
  3. i)shall only make a proposed resolution order for the purposes

group resolution in relation to the intermediate financial holding company, and (ii) shall not make a proposed resolution order for the purposes

group resolution in relation to the mixed-activity holding company.

(4)Subject to paragraph
(3)and notwithstanding the fact that an entity referred to in Regulation 2
(1)(
  1. c)to (
  2. i)does not meet the conditions set out in Regulation 62
(1)(a), (
  1. b)and (c), the resolution authority may make a proposed resolution order in relation to the entity concerned where — (
  2. a)the entity is a resolution entity, (
  3. b)one or more

the subsidiaries

the entity that are institutions, but not resolution entities, comply with the conditions laid down in Regulation 62

(1)(a), (
  1. b)and (c), and (
  2. c)the assets and liabilities

the subsidiaries referred to in subparagraph (b) are such that the failure

those subsidiaries threatens the resolution group as a whole, and resolution action with regard to the entity is necessary either for the resolution

such subsidiaries which are institutions or for the resolution

the relevant resolution group as a whole.”, and (b) by the deletion

paragraph

(5). Power to suspend certain obligations 17. The following Regulation is inserted after Regulation 63

the Regulations

2015: “63A.

(1)The resolution authority, after consulting with the competent authority which shall reply in a timely manner, may suspend any payment or delivery obligations pursuant to any contract to which an institution or an entity referred to in Regulation 2
(1)(
  1. b)to (
  2. i)is a party, where all

the following conditions are met: (a) a determination that the institution or entity is failing or likely to fail has been made under Regulation 62

(1)(a); (b) there is no immediately available private sector measure referred to in Regulation 62
(1)(b) that would prevent the failure

the institution or entity; (c) the exercise

the power to suspend is deemed necessary to avoid the further deterioration

the financial conditions

the institution or entity; (d) the exercise

the power to suspend is either — (i) necessary to reach the determination provided for in Regulation 62

(1)(c), or (ii) necessary to choose the appropriate resolution actions or to ensure the effective application

one or more resolution tools.

(2)(a) The power referred to in paragraph
(1)shall not apply to payment or delivery obligations to the following: (i) systems and operators

systems designated in accordance with Directive 98/26/EC; (ii) central counterparties (in these Regulations referred to as ‘CCPs’) authorised in the Union pursuant to Article 14

Regulation (EU) No 648/2012 and third-country CCPs recognised by the ESMA pursuant to Article 25

that Regulation; (iii) central banks. (

  1. b)The resolution authority shall — (
  2. i)exercise the power referred to in paragraph

(1)having regard to the circumstances

each case, and (ii) in particular, carefully assess the appropriateness

extending the suspension to eligible deposits, especially to covered deposits held by natural persons and micro, small and medium-sized enterprises.

(3)Where the power to suspend payment or delivery obligations pursuant to paragraph
(1)is exercised in respect

eligible deposits, the resolution authority shall direct any institution or entity in respect

whom that power is exercised to ensure that the depositors concerned have access to an appropriate daily amount (in this Regulation referred to as the ‘appropriate daily amount’) from those deposits determined by the resolution authority in accordance with paragraphs

(4)and
(5).
(4)For the purposes

paragraph

(3), the resolution authority — (a) shall determine the appropriate daily amount having regard to all or any

the factors set out in paragraph

(5), and (b) may direct the entity to provide the resolution authority with such information as the resolution authority considers reasonably necessary for the purpose

determining the appropriate daily amount.

(5)The factors referred to in paragraph
(4)are as follows: (a) the balance sheet position

the institution or entity concerned, including its liquidity position; (b) the total amount

eligible deposits held by the institution or entity concerned; (c) the total number

depositors

the institution or entity concerned; (d) the period

the suspension pursuant to paragraph

(1); (e) the amount which is likely to be required by different classes

depositors to meet reasonable daily expenses under the economic conditions prevailing in the State when the power

suspension pursuant to paragraph

(1)is exercised; (f) such further information as may be provided to the resolution authority pursuant to a direction under paragraph
(4)(b).
(6)(a) The period

the suspension pursuant to paragraph

(1)— (
  1. i)shall be as short as possible, (
  2. ii)shall not exceed the minimum period that the resolution authority considers necessary for the purposes indicated in paragraph
(1)(c) and (d), and (iii) in any event shall not last longer than the period from the publication

a notice

suspension pursuant to paragraph

(11)to midnight at the end

the business day next following that publication. (b) On the expiry

the period

suspension referred to in subparagraph (a), the suspension shall cease to have effect.

(7)(a) When exercising the power referred to in paragraph
(1), the resolution authority shall — (i) have regard to the impact the exercise

that power might have on the orderly functioning

financial markets, and (ii) consider the existing rules, and supervisory and judicial powers, to safeguard creditors’ rights and equal treatment

creditors in normal insolvency proceedings. (b) The resolution authority shall, in particular, have regard to the potential application

normal insolvency proceedings to the institution or entity as a result

the determination in Regulation 62

(1)(c) and shall make the arrangements it deems appropriate to ensure adequate coordination with the administrative authorities

the State or with the Court, as the case may be. (c) For the purposes

subparagraph (b), ‘administrative authorities’ means – (

  1. i)the Minister, (
  2. ii)the Investor Compensation Company DAC (otherwise known as the Investor Compensation Company Limited), and (iii) the Insurance Compensation Fund.

(8)When payment or delivery obligations under a contract are suspended pursuant to paragraph
(1), the payment or delivery obligations

any counterparties to that contract shall be suspended for the same period as provided for under paragraph

(6)(a).
(9)A payment or delivery obligation under a contract that would have been due during the period

the suspension provided for under paragraph

(6)(a) shall be due immediately upon expiry

that period.

(10)The resolution authority shall notify the institution or the entity referred to in Regulation 2
(1)(
  1. c)to (
  2. i)and the authorities referred to in Regulation 145
(1)(
  1. a)to (
  2. f)without delay when exercising the power referred to in paragraph
(1)after a determination has been made that the institution is failing or likely to fail pursuant to Regulation 62
(1)(a) and before the resolution decision is taken.
(11)The resolution authority shall publish or ensure the publication

such direction or other instrument by which obligations are suspended under this Regulation and the terms and period

suspension, by the means referred to in Regulation 145

(4).
(12)(a) This Regulation is without prejudice to any powers under any enactment (other than these Regulations) to suspend payment or delivery obligations — (i)

– (I) the institutions and entities referred to in paragraph

(1)before a determination is made that those institutions or entities are failing or likely to fail under Regulation 62
(1)(a), or (II) institutions or entities which are to be wound up under normal insolvency proceedings, and (
  1. ii)that exceed the scope and duration provided for in this Regulation. (
  2. b)The conditions provided for in this Regulation shall be without prejudice to the conditions related to the exercise

any such powers to suspend payment or delivery obligations referred to in subparagraph (a).

(13)When the resolution authority exercises the power to suspend payment or delivery obligations pursuant to paragraph
(1)with respect to an institution or an entity referred to in Regulation 2
(1)(b) to (i), the resolution authority may also, for the duration

that suspension, exercise the power to — (a) restrict secured creditors

the institution or entity from enforcing security interests in relation to any

the assets

that institution or entity for the same duration, in which case Regulations 124

(2)(d) and 130
(2)and
(3)shall apply, and (b) suspend the termination rights

any party to a contract with that institution or entity for the same duration, in which case Regulations 124

(2)(e) and
(3)and 131 shall apply.
(14)Where, after making a determination that an institution or entity is failing or likely to fail pursuant to Regulation 62
(1)(a), the resolution authority has exercised the power to suspend payment or delivery obligations in the circumstances set out in paragraph
(1)or
(13), and resolution action is subsequently taken with respect to that institution or entity, the resolution authority shall not exercise its powers, with respect to that institution or entity, under — (a) Regulation 129
(1), and (b) in the case

the exercise

its powers pursuant to paragraph

(13)(
  1. a)and (
  2. b)or Regulation 130
(1)or 131
(1).”. Amendment

Regulation 65

Regulations

2015 (valuation for the purposes

resolution) 18. Regulation 65

the Regulations

2015 is amended — (a) in paragraphs

(1), by the substitution

“capital instruments and eligible liabilities in accordance with Regulation 95” for “capital instruments, under these Regulations”, (b) in paragraphs

(5)(a),
(5)(c),
(5)(g),
(6)(b),
(11)and
(12)(a), by the substitution

“capital instruments and eligible liabilities in accordance with Regulation 95” for “capital instruments” in each place, and (c) in paragraph

(5)(d), by the substitution

“bail-inable liabilities” for “eligible liabilities”. Amendment

Regulation 68

Regulations

2015 (general principles

resolution tools) 19. Regulation 68

the Regulations

2015 is amended in paragraph

(1)by the substitution

“capital instruments and eligible liabilities” for “capital instruments”. Amendment

regulation 80

Regulations

2015 (scope

bail-in tool) 20. Regulation 80

the Regulations

2015 is amended — (a) in paragraph

(2)— (i) by the substitution

the following for subparagraph (g): “(g) liabilities with a remaining maturity

less than 7 days, owed to — (i) systems or operators

systems designated in accordance with Directive 98/26/EC or their participants and arising from the participation in such a system, or (ii) CCPs authorised in the Union pursuant to Article 14

Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25

that Regulation;”, (ii) in subparagraph (k), by the substitution

“Directive 2014/49/EU;” for “Directive 2014/49/EU.”, and (iii) by the insertion

the following subparagraph after subparagraph (k): “(l) liabilities to institutions or entities referred to in Regulation 2

(1)(
  1. b)to (
  2. i)that are part

the same resolution group without being themselves resolution entities, regardless

their maturities, except where those liabilities rank below ordinary unsecured liabilities as provided for in section 1428A

the Act

2014.”, (b) by the insertion

the following paragraph after paragraph

(3): “(3A) In cases where the exception set out in paragraph
(2)(l) applies, the resolution authority, where it is the resolution authority

the relevant subsidiary that is not a resolution entity, shall assess whether the number

items complying with Regulation 80H

(6)is sufficient to support the implementation

the preferred resolution strategy.”, (c) in paragraph

(8), by the substitution

“bail-inable liabilities” for “eligible liabilities”, (d) by the substitution

the following paragraph for paragraph

(10): “
(10)(a) The resolution authority shall carefully assess whether liabilities to institutions or entities referred to in Regulation 2
(1)(
  1. b)to (
  2. i)that are part

the same resolution group without being themselves resolution entities and that are not excluded from the application

the write-down and conversion powers under paragraph

(2)(l) should be excluded or partially excluded under paragraph
(9)to ensure the effective implementation

the resolution strategy. (b) Where the resolution authority decides to exclude or partially exclude a bail-inable liability or class

bail-inable liabilities under paragraph

(9), the level

write-down or conversion applied to other bail-inable liabilities may be increased to take account

such exclusions, provided that the level

write-down and conversion applied to other bail-inable liabilities complies with the principle set out in Regulation 64

(1)(g).”, (e) in paragraph
(11)— (i) by the substitution

“bail-inable liability” for “eligible liability”, and (ii) by the substitution

“bail-inable liabilities” for “eligible liabilities” in each place, and (f) in paragraph

(12)(a), by the substitution

“bail-inable liabilities” for “eligible liabilities”. Selling

subordinated eligible liabilities to retail clients 21. The following Regulation is inserted after Regulation 80

the Regulations

2015: “80A.

(1)In this Regulation ‘relevant instrument’, subject to paragraph
(4), means an instrument issued on or after 28 December 2020 that is — (a) an eligible liability which meets all

the conditions referred to in Article 72a

the Union Capital Requirements Regulation except for point (b)

Article 72a

(1)and paragraphs 3 to 5

Article 72b

that Regulation, (

  1. b)an Additional Tier 1 instrument, or (
  2. c)a Tier 2 instrument.

(2)A relevant instrument shall not be issued with a denomination

less than €100,000.

(3)A relevant instrument with a denomination

less than €100,000 shall not be sold to a retail client (within the meaning

point 11

Article 4

(1)

Directive 2014/65/EU8 ) in the State.

(4)For the purposes

this Regulation, a reference to a relevant instrument shall not include ordinary shares regardless

whether such shares are recognised in Common Equity Tier 1, Additional Tier 1 or Tier 2 capital.”. New provisions in relation to own funds and eligible liabilities 22. The following Regulations are inserted after Regulation 80A (inserted by Regulation 21)

the Regulations

2015: “Application and calculation

the minimum requirement for own funds and eligible liabilities. 80B.

(1)Institutions and entities referred to in Regulation 2
(1)(
  1. b)to (
  2. i)shall, at all times, meet the requirements for own funds and eligible liabilities where required by and in accordance with this Regulation and Regulations 80C to 80K.
(2)The requirement referred to in paragraph
(1)shall be calculated in accordance with Regulation 80E
(3)to
(11), 80E
(12)or 80E
(14)to
(22), as applicable, as the amount

own funds and eligible liabilities and expressed as percentages

— (a) the total risk exposure amount

the institution or entity referred to in paragraph

(1), calculated in accordance with Article 92
(3)

the Union Capital Requirements Regulation, and (b) the total exposure measure

the institution or entity referred to in paragraph

(1), calculated in accordance with Articles 429 and 429a

the Union Capital Requirements Regulation. Exemption from the minimum requirement for own funds and eligible liabilities. 80C.

(1)Notwithstanding Regulation 80B, the resolution authority shall exempt from the requirement referred to in Regulation 80B
(1)mortgage credit institutions financed by covered bonds which, under the law

the State, are not allowed to receive deposits, provided that — (

  1. a)those institutions will be wound up under normal insolvency proceedings or in proceedings implemented in accordance with Regulation 69, 71 or 74, and (
  2. b)the proceedings referred to in subparagraph (
  3. a)ensure that creditors

those institutions, including holders

covered bonds, where relevant, bear losses in a way that meets the resolution objectives.

(2)Institutions exempted in accordance with this Regulation from the requirement referred to in Regulation 80B
(1)shall not be part

the consolidation referred to in Regulation 80G

(1). Eligible liabilities for resolution entities. 80D.
(1)Liabilities shall be included in the amount

own funds and eligible liabilities

resolution entities only where they satisfy the conditions referred to in the following Articles

the Union Capital Requirements Regulation: (

  1. a)Article 72a; (
  2. b)Article 72b, other than point (d)

paragraph 2; (c) Article 72c.

(2)Notwithstanding paragraph
(1), where these Regulations refer to the requirements in Article 92a or 92b

the Union Capital Requirements Regulation, for the purpose

those Articles, eligible liabilities shall consist

those eligible liabilities which are defined in Article 72k

the Union Capital Requirements Regulation and determined in accordance with Chapter 5a

Title I

Part Two

that Regulation.

(3)Liabilities that arise from debt instruments with embedded derivatives, such as structured notes, that meet the conditions referred to in paragraph
(1), except for point (l)

Article 72a

(2)

the Union Capital Requirements Regulation, shall be included in the amount

own funds and eligible liabilities where only one

the following conditions is met: (a) the principal amount

the liability arising from the debt instrument is — (i) known at the time

issue, (ii) fixed or increasing, and (iii) not affected by an embedded derivative feature, and the total amount

the liability arising from the debt instrument, including the embedded derivative, can be valued on a daily basis by reference to an active and liquid two-way market for an equivalent instrument without credit risk, in accordance with Articles 104 and 105

the Union Capital Requirements Regulation; (b) the debt instrument includes a contractual term that specifies that the value

the claim in cases

the insolvency and

the resolution

the issuer is fixed or increasing, and does not exceed the initially paid-up amount

the liability.

(4)Debt instruments referred to in paragraph
(3), including their embedded derivatives, shall not be subject to any netting agreement and the valuation

such instruments shall not be subject to Regulation 88

(4).
(5)The liabilities referred to in paragraph
(3)shall only be included in the amount

own funds and eligible liabilities with respect to the part

the liability that corresponds to the principal amount referred to in paragraph

(3)(a) or to the fixed or increasing amount referred to in paragraph
(3)(b).
(6)Where liabilities are issued by a subsidiary established in the Union to an existing shareholder that is not part

the same resolution group, and that subsidiary is part

the same resolution group as the resolution entity, those liabilities shall be included in the amount

own funds and eligible liabilities

that resolution entity, provided that the following conditions are met: (a) the liabilities are issued in accordance with Regulation 80H

(6)(a); (b) the exercise

the write-down or conversion power in relation to those liabilities in accordance with Regulation 95 or 98 does not affect the control

the subsidiary by the resolution entity; (

  1. c)the liabilities do not exceed an amount determined by subtracting: (
  2. i)the sum

— (I) the liabilities issued to and bought by the resolution entity either directly or indirectly through other entities in the same resolution group, and (II) the amount

own funds issued in accordance with Regulation 80H

(6)(b), from (ii) the amount required in accordance with Regulation 80H
(1)to
(5).
(7)In the case

resolution entities that are G-SIIs or that are subject to Regulation 80E

(12)or
(13), as the case may be, subject to paragraph
(8)and without prejudice to the minimum requirement in Regulation 80E
(12)or referred to in 80F
(1)(a), the resolution authority shall ensure that a part

the requirement referred to in Regulation 80G equal to 8 per cent

the total liabilities, including own funds, shall be met by such resolution entities using own funds, subordinated eligible instruments, or liabilities as referred to in paragraph

(6).
(8)The resolution authority may permit that a level lower than 8 per cent

the total liabilities, including own funds, but greater than the amount resulting from the application

the formula — shall be met by resolution entities referred to in paragraph

(7)using own funds, subordinated eligible instruments, or liabilities as referred to in paragraph
(6), provided that all the conditions set out in Article 72b
(3)

the Union Capital Requirements Regulation are met, where, in light

the reduction that is possible under the said Article 72b

(3): X1 equals 3.5 per cent

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation; and X2 equals the sum

18 per cent

the total risk exposure amount calculated in accordance with Article 92

(3)

the Union Capital Requirements Regulation and the amount

the combined buffer requirement.

(9)For resolution entities that are subject to Regulation 80E
(12), where the application

paragraphs

(7)and
(8)leads to a requirement greater than 27 per cent

the total risk exposure amount for the resolution entity concerned, the resolution authority shall limit the part

the requirement referred to in Regulation 80G which is to be met using own funds, subordinated eligible instruments, or liabilities as referred to in paragraph

(6), to an amount equal to 27 per cent

the total risk exposure amount

that resolution entity if the resolution authority has assessed that — (

  1. a)access to the resolution financing arrangement is not considered to be an option for resolving that resolution entity in the resolution plan, and (
  2. b)where subparagraph (
  3. a)does not apply, the requirement referred to in Regulation 80G allows that resolution entity to meet the requirements referred to in Regulation 80

(12).
(10)In carrying out the assessment referred to in paragraph
(9), the resolution authority shall also take into account the risk

disproportionate impact on the business model

the resolution entity concerned.

(11)Paragraph
(9)shall not apply to resolution entities that are subject to Regulation 80E
(13).
(12)For resolution entities other than those referred to in paragraph
(7), the resolution authority may decide that a part

the requirement referred to in Regulation 80G up to the greater

8 per cent

the total liabilities, including own funds,

the resolution entity and the formula referred to in paragraph

(16), shall be met using own funds, subordinated eligible instruments, or liabilities as referred to in paragraph
(6), provided that the following conditions are met: (a) non-subordinated liabilities referred to in paragraphs
(1)and
(3)have the same priority ranking as provided for in section 1428A

the Act

2014 as certain liabilities that are excluded from the application

write-down and conversion powers in accordance with Regulation 80

(2)to
(8)or Regulation 80
(9)and
(10); (b) there is a risk that, as a result

a planned application

write-down and conversion powers to non-subordinated liabilities that are not excluded from the application

write-down and conversion powers in accordance with Regulation 80

(2)to
(8)or Regulation 80
(9)and
(10), creditors whose claims arise from those liabilities incur greater losses than they would incur in a winding up under normal insolvency proceedings; (c) the amount

own funds and other subordinated liabilities does not exceed the amount necessary to ensure that the creditors referred to in subparagraph (b) do not incur losses above the level

losses that they would otherwise have incurred in the winding-up

the resolution entity under normal insolvency proceedings.

(13)Where the resolution authority determines that, within a class

liabilities which includes eligible liabilities, the amount

the liabilities that are excluded or reasonably likely to be excluded from the application

write-down or conversion powers in accordance with Regulation 80

(2)to
(8)or Regulation 80
(9)and
(10)totals more than 10 per cent

that class, the resolution authority shall assess the risk referred to in paragraph

(12)(b).
(14)For the purposes

paragraphs

(7)to
(13)and
(16), derivative liabilities shall be included in total liabilities on the basis that full recognition is given to counterparty netting rights.
(15)The own funds

a resolution entity that are used to comply with the combined buffer requirement shall be eligible to comply with the requirements referred to in paragraphs

(7)to
(13)and
(16).
(16)Notwithstanding paragraphs
(7)to
(11)and subject to paragraphs
(17)to
(21), the resolution authority may decide that the requirement referred to in Regulation 80G shall be met by resolution entities referred to in paragraph
(7)using own funds, subordinated eligible instruments, or liabilities as referred to in paragraph
(6), to the extent that, due to the obligation

the resolution entity to comply with the combined buffer requirement and the requirements referred to in Article 92a

the Union Capital Requirements Regulation and Regulations 80E

(12)and 80G, the sum

those own funds, instruments and liabilities does not exceed the greater

— (a) 8 per cent

total liabilities, including own funds,

the entity, or (b) the amount resulting from the application

the formula — where – A is the amount resulting from the requirement referred to in Article 92

(1)(c)

the Union Capital Requirements Regulation, B is the amount resulting from the requirement referred to in Regulation 92A

the Capital Requirements Regulations, and C is the amount resulting from the combined buffer requirement.

(17)(a) The resolution authority may exercise the power referred to in paragraph
(16)with respect to resolution entities that are G-SIIs or that are subject to Regulation 80E
(12)or
(13), and that meet one

the conditions specified in paragraph

(18), up to a limit

100 per cent

the total number

all resolution entities that are G-SIIs or that are subject to Regulation 80E

(12)or
(13)for which the resolution authority determines the requirement referred to in Regulation 80G. (b) Subject to section 33AK(1A)

the Act

1942, if the Minister is

the opinion that such information is relevant to the exercise

the power referred to in paragraph

(16)as provided for in subparagraph (a), the resolution authority shall provide such information as the Minister may from time to time require on the total number

resolution entities that are G-SIIs or that are subject to Regulation 80E

(12)or
(13).
(18)The following are the conditions referred to in paragraph
(17): (
  1. a)substantive impediments to resolvability have been identified in the preceding resolvability assessment and either: (
  2. i)no remedial action has been taken following the application

the measures referred to in Regulation 28

(10)in the timeline required by the resolution authority, or (ii) the identified substantive impediments cannot be addressed using any

the measures referred to in Regulation 28

(10), and the exercise

the power referred to in paragraph

(16)would partially or fully compensate for the negative impact

the substantive impediments on resolvability; (b) the resolution authority considers that the feasibility and credibility

the resolution entity’s preferred resolution strategy is limited, taking into account the entity’s size, its interconnectedness, the nature, scope, risk and complexity

its activities, its legal status and its shareholding structure; (c) the requirement referred to in Regulation 92A

the Capital Requirements Regulations reflects the fact that the resolution entity that is a G-SII or that is subject to Regulation 80E

(12)or
(13)is, in terms

risk, among the top 20 per cent

institutions for which the resolution authority determines the requirement referred to in Regulation 80B

(1).
(19)For the purposes

the percentages referred to in paragraphs

(17)and
(18), the resolution authority shall round the number resulting from the calculation up to the closest whole number.
(20)The resolution authority shall only take a decision referred to in paragraph
(12)or
(16), as the case may be, after consulting the competent authority.
(21)When taking a decision referred to in paragraph
(12)or
(16), as the case may be, the resolution authority shall also take into account — (a) the depth

the market for the resolution entity’s own funds instruments and subordinated eligible instruments, the pricing

such instruments, where they exist, and the time needed to execute any transactions necessary for the purpose

complying with the decision, (b) the amount

eligible liabilities instruments that meet all

the conditions referred to in Article 72a

the Union Capital Requirements Regulation that have a residual maturity below one year as

the date

the decision, with a view to making quantitative adjustments to the requirements referred to in paragraphs

(12)and
(16), (c) the availability and the amount

instruments that meet all

the conditions referred to in Article 72a

the Union Capital Requirements Regulation other than point (d)

Article 72b

(2)

that Regulation, (d) subject to paragraph

(22), whether the amount

liabilities that are excluded from the application

write-down and conversion powers in accordance with Regulation 80

(2)to
(8)or Regulation 80
(9)and
(10)and that, in normal insolvency proceedings, rank equally with or below the highest ranking eligible liabilities is significant in comparison to the own funds and eligible liabilities

the resolution entity, (

  1. e)the resolution entity’s business model, funding model, and risk profile, and its stability and ability to contribute to the economy, and (
  2. f)the impact

possible restructuring costs on the resolution entity’s recapitalisation.

(22)For the purposes

paragraph

(21)(d): (a) where the amount

excluded liabilities does not exceed 5 per cent

the amount

the own funds and eligible liabilities

the resolution entity, the excluded amount shall be considered as not being significant; (b) above the threshold referred to in subparagraph (a), the significance

the excluded liabilities shall be assessed by the resolution authority. Determination

minimum requirement for own funds and eligible liabilities. 80E.

(1)The requirement referred to in Regulation 80B
(1)shall be determined by the resolution authority, after consulting the competent authority, on the basis

the following criteria: (a) the need to ensure that the resolution group can be resolved by the application

the resolution tools to the resolution entity, including, where appropriate, the bail-in tool, in a way that meets the resolution objectives; (b) the need to ensure, where appropriate, that the resolution entity and its subsidiaries that are institutions or entities referred to in Regulation 2

(1)(
  1. b)to (
  2. i)but are not resolution entities have sufficient own funds and eligible liabilities to ensure that, if the bail-in tool or write-down and conversion powers, respectively, were to be applied to them, losses could be absorbed and that it is possible to restore the total capital ratio and, as applicable, the leverage ratio,

the relevant entities to a level necessary to enable them to continue to comply with the conditions for authorisation and to carry on the activities for which they are authorised under the Capital Requirements Regulations or Directive 2014/65/EU; (c) the need to ensure, if the resolution plan anticipates the possibility for certain classes

eligible liabilities to be excluded from bail-in pursuant to Regulation 80

(9)and
(10)or to be transferred in full to a recipient under a partial transfer, that the resolution entity has sufficient own funds and eligible liabilities to absorb losses and to restore its total capital ratio and, as applicable, its leverage ratio, to the level necessary to enable it to continue to comply with the conditions for authorisation and to carry on the activities for which it is authorised under the Capital Requirements Regulations or Directive 2014/65/EU; (d) the size, the business model, the funding model and the risk profile

the entity; (e) the extent to which the failure

the entity would have an adverse effect on financial stability, including through contagion to other institutions or entities, due to the interconnectedness

the entity with those other institutions or entities or with the rest

the financial system.

(2)(a) Where the resolution plan provides that resolution action is to be taken or that the power to write-down and convert relevant capital instruments and eligible liabilities in accordance with Regulation 95 is to be exercised in accordance with the relevant scenario referred to in Regulation 17
(9)and
(10)the requirement referred to in Regulation 80B
(1)shall equal an amount sufficient to ensure that — (
  1. i)the losses that are expected to be incurred by the entity are fully absorbed (‘loss absorption’), and (
  2. ii)the resolution entity and its subsidiaries that are institutions or entities referred to in Regulation 2
(1)(
  1. b)to (
  2. i)but are not resolution entities are recapitalised to a level necessary to enable them to continue to comply with the conditions for authorisation, and to carry on the activities for which they are authorised under the Capital Requirements Regulations or Directive 2014/65/EU or an equivalent legislative act for an appropriate period not longer than one year (in this Regulation referred to as ‘recapitalisation’). (
  3. b)Where the resolution plan provides that the entity is to be wound up under normal insolvency proceedings, the resolution authority shall assess whether it is justified to limit the requirement referred to in Regulation 80B
(1)for that entity, so that it does not exceed an amount sufficient to absorb losses in accordance with subparagraph (a)(i). (
  1. c)The assessment by the resolution authority shall, in particular, evaluate the limit referred to in subparagraph (
  2. b)as regards any possible impact on financial stability and on the risk

contagion to the financial system.

(3)For resolution entities, the amount referred to in paragraph
(2)(
  1. a)shall be the following: (
  2. a)for the purpose

calculating the requirement referred to in Regulation 80B

(1), in accordance with Regulation 80B
(2)(a), the sum

— (i) the amount

the losses to be absorbed in resolution that corresponds to the requirements referred to in point (c)

Article 92

(1)

the Union Capital Requirements Regulation and Regulation 92A

the Capital Requirements Regulations

the resolution entity at the consolidated resolution group level, and (ii) a recapitalisation amount that allows the resolution group resulting from resolution to restore compliance with its total capital ratio requirement referred to in point (c)

Article 92

(1)

the Union Capital Requirements Regulation and its requirement referred to in Regulation 92A

the Capital Requirements Regulations at the consolidated resolution group level after the implementation

the preferred resolution strategy, and (b) for the purpose

calculating the requirement referred to in Regulation 80B

(1), in accordance with Regulation 80B
(2)(b), the sum

— (i) the amount

the losses to be absorbed in resolution that corresponds to the resolution entity’s leverage ratio requirement referred to in point (d)

Article 92

(1)

the Union Capital Requirements Regulation at the consolidated resolution group level, and (ii) a recapitalisation amount that allows the resolution group resulting from resolution to restore compliance with the leverage ratio requirement referred to in subparagraph (d)

Article 92

(1)

the Union Capital Requirements Regulation at the consolidated resolution group level after the implementation

the preferred resolution strategy.

(4)For the purposes

Regulation 80B

(2)(a), the requirement referred to in Regulation 80B
(1)shall be expressed in percentage terms as the amount calculated in accordance with paragraph
(3)(a), divided by the total risk exposure amount.
(5)For the purposes

Regulation 80B

(2)(b), the requirement referred to in Regulation 80B
(1)shall be expressed in percentage terms as the amount calculated in accordance with paragraph
(3)(b), divided by the total exposure measure.
(6)When setting the individual requirement provided in paragraph
(3)(b), the resolution authority shall take into account the requirements referred to in Regulation 80
(12).
(7)When setting the recapitalisation amounts referred to in subparagraphs (a)(ii) and (b)(ii)

paragraph

(3), the resolution authority shall — (
  1. a)use the most recently reported values for the relevant total risk exposure amount or total exposure measure, adjusted for any changes resulting from resolution actions set out in the resolution plan, and (
  2. b)after consulting with the competent authority, adjust the amount corresponding to the current requirement referred to in Regulation 92A

the Capital Requirements Regulations downwards or upwards to determine the requirement that is to apply to the resolution entity after the implementation

the preferred resolution strategy.

(8)The resolution authority may increase the requirement provided in paragraph
(3)(a)(ii) by an appropriate amount necessary to ensure that, following resolution, the entity is able to sustain sufficient market confidence for an appropriate period, which shall not exceed one year.
(9)Where paragraph
(8)applies, the amount referred to in that paragraph shall be equal to the combined buffer requirement applicable after the application

the resolution tools, less the amount referred to in Regulation 115(g)(i)

the Capital Requirements Regulations.

(10)The amount referred to in paragraph
(8)shall be adjusted downwards if, after consulting the competent authority, the resolution authority determines that it would be feasible and credible for a lower amount to be sufficient to sustain market confidence and to ensure both the continued provision

critical economic functions by the institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)and its access to funding without recourse to extraordinary public financial support other than contributions from resolution financing arrangements, in accordance with Regulation 80
(12)and Regulation 164
(2)and
(3), after implementation

the resolution strategy.

(11)The amount referred to in paragraph
(8)shall be adjusted upwards if, after consulting with the competent authority, the resolution authority determines that a higher amount is necessary to sustain sufficient market confidence and to ensure both the continued provision

critical economic functions by the institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)and its access to funding without recourse to extraordinary public financial support other than contributions from resolution financing arrangements, in accordance with Regulation 80
(12)and Regulation 164
(2)and
(3), for an appropriate period which shall not exceed one year.
(12)(a) For resolution entities that are not subject to Article 92a

the Union Capital Requirements Regulation and that are part

a resolution group the total assets

which exceed €100 billion, the level

the requirement referred to in paragraph

(3)shall be at least equal to — (i) 13.5 per cent when calculated in accordance with Regulation 80B
(2)(a), and (ii) 5 per cent when calculated in accordance with Regulation 80B
(2)(b). (
  1. b)Notwithstanding Regulation 80D, the resolution entities referred to in subparagraph (
  2. a)shall meet a level

the requirement referred to in that subparagraph that is equal to - (i) 13.5 per cent when calculated in accordance with Regulation 80B

(2)(a), and (ii) 5 per cent when calculated in accordance with Regulation 80B
(2)(b), using own funds, subordinated eligible instruments, or liabilities as referred to in Regulation 80D
(6).
(13)(a) A resolution authority may, after consulting the competent authority, decide to apply the requirements laid down in paragraph
(12)to a resolution entity which is not subject to Article 92a

the Union Capital Requirements Regulation and which is part

a resolution group the total assets

which are lower than €100 billion and which the resolution authority has assessed as reasonably likely to pose a systemic risk in the event

its failure. (

  1. b)When making a decision referred to in subparagraph (a), the resolution authority shall take the following into account: (
  2. i)the prevalence

deposits, and the absence

debt instruments in the funding model; (

  1. ii)the extent to which access to the capital markets for eligible liabilities is limited; (iii) the extent to which the resolution entity relies on Common Equity Tier 1 capital to meet the requirement referred to in Regulation 80G. (
  2. c)The absence

a decision pursuant to subparagraph (a) is without prejudice to any decision under Regulation 80D

(12).
(14)For entities that are not themselves resolution entities, the amount referred to in paragraph
(2)(
  1. a)shall be the following: (
  2. a)for the purpose

calculating the requirement referred to in Regulation 80B

(1), in accordance with Regulation 80B
(2)(a), the sum

— (i) the amount

the losses to be absorbed that corresponds to the requirements referred to in point (c)

Article 92

(1)

the Union Capital Requirements Regulation and Regulation 92A

the Capital Requirements Regulations

the entity, and (ii) a recapitalisation amount that allows the entity to restore compliance with its total capital ratio requirement referred in point (c)

Article 92

(1)

the Union Capital Requirements Regulation and its requirement referred to in Regulation 92A

the Capital Requirements Regulations after the exercise

the power to write-down or convert relevant capital instruments and eligible liabilities in accordance with Regulation 95 or after the resolution

the resolution group; (b) for the purpose

calculating the requirement referred to in Regulation 80B

(1), in accordance with Regulation 80B
(2)(b), the sum

— (i) the amount

the losses to be absorbed that corresponds to the entity’s leverage ratio requirement referred to in point (d)

Article 92

(1)

the Union Capital Requirements Regulation, and (ii) a recapitalisation amount that allows the entity to restore compliance with its leverage ratio requirement referred to in point (d)

Article 92

(1)

the Union Capital Requirements Regulation after the exercise

the power to write-down or convert relevant capital instruments and eligible liabilities in accordance with Regulation 95 or after the resolution

the resolution group.

(15)For the purposes

Regulation 80B

(2)(a), the requirement referred to in Regulation 80B
(1)shall be expressed in percentage terms as the amount calculated in accordance with paragraph
(14)(a), divided by the total risk exposure amount.
(16)For the purposes

Regulation 80B

(2)(b), the requirement referred to in Regulation 80B
(1)shall be expressed in percentage terms as the amount calculated in accordance with paragraph
(14)(b), divided by the total exposure measure.
(17)When setting the individual requirement provided in paragraph
(14)(b), the resolution authority shall take into account the requirements referred to in Regulation 80
(12).
(18)When setting the recapitalisation amounts referred to in paragraph
(14)(a)(
  1. ii)and (b)(ii), the resolution authority shall — (
  2. a)use the most recently reported values for the relevant total risk exposure amount or total exposure measure, adjusted for any changes resulting from actions set out in the resolution plan, and (
  3. b)after consulting with the competent authority, adjust the amount corresponding to the current requirement referred to in Regulation 92A

the Capital Requirements Regulations downwards or upwards to determine the requirement that is to apply to the relevant entity after the exercise

the power to write-down or convert relevant capital instruments and eligible liabilities in accordance with Regulation 95 or after the resolution

the resolution group.

(19)The resolution authority may increase the requirement provided in paragraph
(14)(a)(ii) by an appropriate amount necessary to ensure that, following the exercise

the power to write-down or convert relevant capital instruments and eligible liabilities in accordance with Regulation 95, the entity is able to sustain sufficient market confidence for an appropriate period which shall not exceed one year.

(20)Where paragraph
(19)applies, the amount referred to in that paragraph shall be equal to the combined buffer requirement applicable after the exercise

the power referred to in Regulation 95 or after the resolution

the resolution group, less the amount referred to in Regulation 115(g)(i)

the Capital Requirements Regulations.

(21)The amount referred to in paragraph
(19)shall be adjusted downwards if, after consulting with the competent authority, the resolution authority determines that it would be feasible and credible for a lower amount to be sufficient to ensure market confidence and to ensure both the continued provision

critical economic functions by the institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)and its access to funding without recourse to extraordinary public financial support other than contributions from resolution financing arrangements, in accordance with Regulation 80
(12)and Regulation 164
(2)and
(3), after the exercise

the power referred to in Regulation 95 or after the resolution

the resolution group.

(22)The amount referred to in paragraph
(19)shall be adjusted upwards if, after consulting with the competent authority, the resolution authority determines that a higher amount is necessary to sustain sufficient market confidence and to ensure both the continued provision

critical economic functions by the institution or entity referred to in Regulation 2

(1)(
  1. b)to (
  2. i)and its access to funding without recourse to extraordinary public financial support other than contributions from resolution financing arrangements, in accordance with Regulation 80
(12)and Regulation 164
(2)and
(3), for an appropriate period which shall not exceed one year.
(23)Where the resolution authority expects that certain classes

eligible liabilities are reasonably likely to be fully or partially excluded from bail-in pursuant to Regulation 80

(9)and
(10)or might be transferred in full to a recipient under a partial transfer, the requirement referred to in Regulation 80B
(1)shall be met using own funds or other eligible liabilities that are sufficient to — (a) cover the amount

excluded liabilities identified in accordance with Regulation 80

(9)and
(10), and (b) ensure that the conditions referred to in paragraph
(2)are satisfied.
(24)Any decision by the resolution authority to impose a minimum requirement

own funds and eligible liabilities under this Regulation shall contain the reasons for that decision, including a full assessment

the elements referred to in paragraphs

(2)to
(23)and shall be reviewed by the resolution authority without undue delay to reflect any changes in the level

the requirement referred to in Regulation 92A

the Capital Requirements Regulations.

(25)For the purposes

paragraphs

(3)to
(11)and
(14)to
(22), capital requirements shall be interpreted in accordance with the competent authority’s application

the transitional provisions laid down in Chapters 1, 2 and 4

Title I

Part Ten

the Union Capital Requirements Regulation. Determination

minimum requirement for own funds and eligible liabilities for resolution entities

G-SIIs and Union material subsidiaries

non-EU G-SIIs. 80F.

(1)The requirement referred to in Regulation 80B
(1)for a resolution entity that is a G-SII or part

a G-SII shall consist

— (a) the requirements referred to in Articles 92a and 494

the Union Capital Requirements Regulation, and (b) any additional requirement for own funds and eligible liabilities that has been determined by the resolution authority specifically in relation to that entity in accordance with paragraph

(3).
(2)The requirement referred to in Regulation 80B
(1)for a Union material subsidiary

a non-EU G-SII shall consist

— (a) the requirements referred to in Articles 92b and 494

the Union Capital Requirements Regulation, and (b) any additional requirement for own funds and eligible liabilities that has been determined by the resolution authority specifically in relation to that material subsidiary in accordance with paragraph

(3), which is to be met using own funds and liabilities that meet the conditions

Regulation 80H and Regulation 153

(2)to
(5).
(3)The resolution authority shall impose an additional requirement for own funds and eligible liabilities referred to in paragraphs
(1)(b) and
(2)(
  1. b)only — (
  2. a)where the requirement referred to in paragraph
(1)(a) or
(2)(
  1. a)is not sufficient to satisfy the conditions set out in Regulation 80E, and (
  2. b)to an extent that ensures that the conditions set out in Regulation 80E are satisfied.
(4)For the purposes

Regulation 80J

(4)to
(6),where more than one G-SII entity (within the meaning

point 136

Article 4

(1)

the Union Capital Requirements Regulation) belonging to the same G-SII are resolution entities, the resolution authority shall calculate the amount referred to in paragraph

(3): (
  1. a)for each resolution entity; (
  2. b)for the Union parent undertaking as if it was the only resolution entity

the G-SII.

(5)Any decision by the resolution authority to impose an additional requirement for own funds and eligible liabilities under paragraph
(1)(b) or
(2)(b) shall contain the reasons for that decision, including a full assessment

the elements referred to in paragraph

(3), and shall be reviewed by the resolution authority without undue delay to reflect any changes in the level

the requirement referred to in Regulation 92A

the Capital Requirements Regulations that applies to the resolution group or the Union material subsidiary

a non-EU G-SII. Application

the minimum requirement for own funds and eligible liabilities to resolution entities. 80G.

(1)Resolution entities shall comply with the requirements laid down in Regulations 80D to 80F on a consolidated basis at the level

the resolution group.

(2)The resolution authority shall determine the requirement referred to in Regulation 80B
(1)for a resolution entity at the consolidated resolution group level in accordance with Regulation 80J, on the basis

the requirements laid down in Regulations 80D to 80F and on the basis

whether the third-country subsidiaries

the group are to be resolved separately under the resolution plan.

(3)For a resolution group within the meaning

subparagraph (b)

the definition in Regulation 3

(1)

‘resolution group’, where the resolution authority is the resolution authority for such a resolution group it shall decide, depending on the features

the solidarity mechanism and

the preferred resolution strategy, which entities in the resolution group are to be required to comply with Regulation 80E

(3)to
(12)and Regulation 80F
(1), in order to ensure that the resolution group as a whole complies with paragraphs
(1)and
(2), and how such entities are to do so in conformity with the resolution plan. Application

the minimum requirement for own funds and eligible liabilities to entities that are not themselves resolution entities. 80H.

(1)Subject to paragraph
(3), institutions that are subsidiaries

a resolution entity or

a third-country entity, but are not themselves resolution entities, shall comply with the requirements laid down in Regulation 80E on an individual basis.

(2)The resolution authority, after consulting with the competent authority, may decide to apply the requirement laid down in this Regulation to an entity referred to in Regulation 2
(1)(
  1. b)to (
  2. i)that is a subsidiary

a resolution entity but is not itself a resolution entity.

(3)Notwithstanding paragraph
(1), Union parent undertakings that are not themselves resolution entities, but are subsidiaries

third-country entities, shall comply with the requirements laid down in Regulations 80E and 80F, as applicable, on a consolidated basis.

(4)In the case

a resolution group referred to in subparagraph (b)

the definition in Regulation 3

(1)

‘resolution group’, the following shall comply with Regulation 80E

(14)to
(22)on an individual basis: (
  1. a)credit institutions which are permanently affiliated to a central body, but are not themselves resolution entities; (
  2. b)a central body which is not itself a resolution entity; (
  3. c)any resolution entities that are not subject to a requirement under Regulation 80G
(3).
(5)The requirement referred to in Regulation 80B
(1)for an entity referred to in paragraphs
(1)to
(4)shall be determined in accordance with Regulations 80J and 153, where applicable, and on the basis

the requirements set out in in Regulation 80E.

(6)The requirement referred to in Regulation 80B
(1)for entities referred to in paragraphs
(1)to
(4)shall be met using one or more

the following: (

  1. a)liabilities — (
  2. i)that are issued to and bought by the resolution entity, either directly or indirectly through other entities in the same resolution group that bought the liabilities from the entity that is subject to this Regulation, or are issued to and bought by an existing shareholder that is not part

the same resolution group as long as the exercise

write-down or conversion powers in accordance with Regulations 95 to 98 does not affect the control

the subsidiary by the resolution entity, (ii) that satisfy the eligibility criteria referred to in Article 72a

the Union Capital Requirements Regulation, except for points (b), (c), (k), (l) and (m)

Article 72b

(2)and Article 72b
(3)to
(5)

that Regulation; (iii) that rank, in normal insolvency proceedings, below liabilities that do not meet the condition referred to in clause (

  1. i)and that are not eligible for own funds requirements, (
  2. iv)that are subject to write-down or conversion powers in accordance with Regulations 95 to 98 in a manner that is consistent with the resolution strategy

the resolution group, in particular by not affecting the control

the subsidiary by the resolution entity, (v) the acquisition

ownership

which is not funded directly or indirectly by the entity that is subject to this Regulation, (vi) the provisions governing which do not indicate explicitly or implicitly that the liabilities would be called, redeemed, repaid or repurchased early, as applicable, by the entity that is subject to this Regulation, other than in the case

the insolvency or liquidation

that entity, and that entity does not otherwise provide such an indication, (vii) the provisions governing which do not give the holder the right to accelerate the future scheduled payment

interest or principal, other than in the case

the insolvency or liquidation

the entity that is subject to this Regulation, (viii) the level

interest or dividend payments, as applicable, due thereon is not amended on the basis

the credit standing

the entity that is subject to this Regulation or its parent undertaking; (

  1. b)own funds, as follows: (
  2. i)Common Equity Tier 1 capital, and (
  3. ii)other own funds that — (I) are issued to and bought by entities that are included in the same resolution group, or (II) are issued to and bought by entities that are not included in the same resolution group as long as the exercise

write-down or conversion powers in accordance with Regulations 95 to 98 does not affect the control

the subsidiary by the resolution entity.

(7)The resolution authority may waive the application

this Regulation to a subsidiary that is not a resolution entity where — (a) both the subsidiary and the resolution entity are established in the State and are part

the same resolution group, (

  1. b)the resolution entity complies with the requirement referred to in Regulation 80G, (
  2. c)there is no current or foreseen material practical or legal impediment to the prompt transfer

own funds or repayment

liabilities by the resolution entity to the subsidiary in respect

which a determination has been made in accordance with Regulation 95

(8), in particular where resolution action is taken in respect

the resolution entity, (d) the resolution entity satisfies the competent authority regarding the prudent management

the subsidiary and has declared, with the consent

the competent authority, that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiary are

no significance, (e) the risk evaluation, measurement and control procedures

the resolution entity cover the subsidiary, and (f) the resolution entity holds more than 50 per cent

the voting rights attached to shares in the capital

the subsidiary or has the right to appoint or remove a majority

the members

the management body

the subsidiary.

(8)The resolution authority may also waive the application

this Regulation to a subsidiary that is not a resolution entity where — (a) both the subsidiary and its parent undertaking are established in the State and are part

the same resolution group, (b) the parent undertaking complies on a consolidated basis with the requirement referred to in Regulation 80B

(1)in the State, (c) there is no current or foreseen material practical or legal impediment to the prompt transfer

own funds or repayment

liabilities by the parent undertaking to the subsidiary in respect

which a determination has been made in accordance with Regulation 95

(8), in particular where resolution action or powers referred to in Regulation 95
(1)to
(4)are taken in respect

the parent undertaking, (d) the parent undertaking satisfies the competent authority regarding the prudent management

the subsidiary and has declared, with the consent

the competent authority, that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiary are

no significance, (e) the risk evaluation, measurement and control procedures

the parent undertaking cover the subsidiary, and (f) the parent undertaking holds more than 50 per cent

the voting rights attached to shares in the capital

the subsidiary or has the right to appoint or remove a majority

the members

the management body

the subsidiary.

(9)Where the conditions laid down in subparagraphs (a) and (b)

paragraph

(7)are met, the resolution authority, where it is the resolution authority

a subsidiary, may permit the requirement referred to in Regulation 80B

(1)to be met in full or in part with a guarantee provided by the resolution entity, which satisfies the following conditions: (a) the guarantee is provided for at least an amount that is equivalent to the amount

the requirement for which it substitutes; (b) the guarantee is triggered on the occurrence

whichever

the following is the first to occur: (

  1. i)the subsidiary is unable to pay its debts or other liabilities as they fall due; (
  2. ii)a determination has been made in accordance with Regulation 95

(8)in respect

the subsidiary; (c) the guarantee is collateralised through a financial collateral arrangement as defined in point (a)

Article 2

(1)

Directive 2002/47/EC for at least 50 per cent

its amount; (d) the collateral backing the guarantee satisfies the requirements

Article 197

the Union Capital Requirements Regulation, which, following appropriately conservative haircuts, is sufficient to cover the amount collateralised as referred to in subparagraph (c); (

  1. e)the collateral backing the guarantee is unencumbered and, in particular, is not used as collateral to back any other guarantee; (
  2. f)the collateral has an effective maturity that satisfies the same maturity condition as that referred to in Article 72c

(1)

the Union Capital Requirements Regulation; (g) there are no legal, regulatory or operational barriers to the transfer

the collateral from the resolution entity to the relevant subsidiary, including where resolution action is taken in respect

the resolution entity.

(10)For the purposes

paragraph

(9)(g), at the request

the resolution authority, the resolution entity shall provide an independent written and reasoned legal opinion or shall otherwise satisfactorily demonstrate that there are no legal, regulatory or operational barriers to the transfer

collateral from the resolution entity to the relevant subsidiary. Waiver for a central body and credit institutions permanently affiliated to a central body. 80I. The resolution authority may partially or fully waive the application

Regulation 80H in respect

a central body or

a credit institution which is permanently affiliated to a central body, where all

the following conditions are met: (a) the credit institution and the central body are subject to supervision by the same competent authority, are established in the State and are part

the same resolution group; (b) the commitments

the central body and its permanently affiliated credit institutions are joint and several liabilities, or the commitments

its permanently affiliated credit institutions are entirely guaranteed by the central body; (c) the minimum requirement for own funds and eligible liabilities, and the solvency and liquidity

the central body and

all

the permanently affiliated credit institutions, are monitored as a whole on the basis

the consolidated accounts

those institutions; (d) in the case

a waiver for a credit institution which is permanently affiliated to a central body, the management

the central body is empowered to issue instructions to the management

the permanently affiliated institutions; (e) the relevant resolution group complies with the requirement referred to in Regulation 80G

(3); (f) there is no current or foreseen material practical or legal impediment to the prompt transfer

own funds or repayment

liabilities between the central body and the permanently affiliated credit institutions in the event

resolution. Procedure for determining the minimum requirement for own funds and eligible liabilities. 80J.

(1)The resolution authority, where it is the resolution authority

the resolution entity, shall endeavour to reach a joint decision, with the group-level resolution authority (where different from the first-mentioned resolution authority) and, where it is responsible for the subsidiaries

a resolution group that are subject to the requirement referred to in Regulation 80H on an individual basis, with other such relevant authorities, on — (a) the amount

the requirement applied at the consolidated resolution group level for each resolution entity, and (b) the amount

the requirement applied on an individual basis to each entity

a resolution group which is not a resolution entity.

(2)The joint decision referred to in paragraph
(1)shall ensure compliance with Regulations 80G and 80H and shall be fully reasoned and provided by the resolution authority to — (a) the resolution entity, where the resolution authority is the resolution authority

that entity, (b) any entity

a resolution group which is not a resolution entity, where the resolution authority is the resolution authority

that entity, and (c) the Union parent undertaking

the group, by the resolution authority

the resolution entity where that Union parent undertaking is not itself a resolution entity from the same resolution group.

(3)The joint decision taken in accordance with this Regulation may provide that, where consistent with the resolution strategy and sufficient instruments complying with Regulation 80H
(6)have not been bought directly or indirectly by the resolution entity, the requirements referred to in Regulation 80E
(15)to
(23)are partially met by the subsidiary in compliance with Regulation 80H
(6)with instruments issued to and bought by entities not belonging to the resolution group.
(4)Where more than one G-SII entity (within the meaning

point

(136)

Article 4

(1)

the Union Capital Requirements Regulation) belonging to the same G-SII are resolution entities, the resolution authority where it is the resolution authority

the resolution entity as referred to in paragraph

(1), shall discuss and, where appropriate and consistent with the G-SII’s resolution strategy, agree, with the other resolution authorities referred to in paragraph
(1), on the application

Article 72e

the Union Capital Requirements Regulation and any adjustment to minimise or eliminate the difference between — (a) the sum

the amounts referred to in Regulation 80F

(4)(a) and Article 12a

the Union Capital Requirements Regulation for individual resolution entities, and (b) the sum

the amounts referred to in Regulation 80F

(4)(b) and Article 12a

the Union Capital Requirements Regulation.

(5)Any adjustment referred to in paragraph
(4)may be applied subject to the following conditions: (a) the adjustment may be applied in respect

differences in the calculation

the total risk exposure amounts between the relevant Member States by adjusting the level

the requirement; (b) the adjustment shall not be applied to eliminate differences resulting from exposures between resolution groups.

(6)The sum

the amounts referred to in Regulation 80F

(4)(a) and Article 12a

the Union Capital Requirements Regulation for individual resolution entities shall not be lower than the sum

the amounts referred to in Regulation 80F

(4)(b) and Article 12a

the Union Capital Requirements Regulation.

(7)In the absence

the joint decision referred to in paragraph

(1)within four months (in this Regulation referred to as the ‘four month period’), a decision shall be taken in accordance with paragraphs
(8)to
(10).
(8)(a) Where the joint decision referred to in paragraph
(1)is not taken within the four month period because

a disagreement concerning a consolidated resolution group requirement referred to Regulation 80G, a decision shall be taken on that requirement by the resolution authority where it is the resolution authority

the resolution entity after having duly taken into account — (i) the assessment o

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AI explanation based on the official legal text. Indicative, not a substitute for legal advice.