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Article 273Article 76Article 5Article 7Article 14Article 43Article 15Article 8Article 10

PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM CHAPTER 547 PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLUTION MECHANISM ACT To authorise the Government

Malta to enter into the agreement on the transfer and mutualisation

contributions to the Single Resolution Fund during the transitional period as defined in the Act and to provide for the entering into financial or other agreements or arrangements with the participants

the Single Resolution Mechanism. Amended by: XXI. 2016.2. 29th November, 2015 ACT XXXIV

2015, as amended by Act XXI

2016. 1.

this Act is the Participation within the Single Resolution Fund and granting

financial support under the Single Resolution Mechanism Act. Short title and commencement.

this Act. 2. In this Act, unless the context otherwise requires: "Agreement" means the agreement on the transfer and mutualisation

contributions to the Single Resolution Fund between the Kingdom

Belgium, the Republic

Bulgaria, the Czech Republic, the Kingdom

Denmark, the Federal Republic

Germany, the Republic

Estonia, Ireland, the Hellenic Republic, the Kingdom

Spain, the French Republic, the Republic

Croatia, the Italian Republic, the Republic

Cyprus, the Republic

Latvia, the Republic

Lithuania, the Grand Duchy

Luxembourg, Hungary, the Republic

Malta, the Kingdom

the Netherlands, the Republic

Austria, the Republic

Poland, the Portuguese Republic, Romania, the Republic

Slovenia, the Slovak Republic and the Republic

Finland

the 21st May 2014, annexed in the Schedule to this Act; "Malta" has the meaning assigned to it by article 124

the Constitution

Malta; "Minister" means the Minister responsible for Finance; "Single Resolution Mechanism" means the mechanism established through Regulation (EU) No. 806/2014

the European Parliament and

the Council

15 July 2014 establishing uniform rules and a uniform procedure for the resolution

credit institutions and certain investment firms in the framework

a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010

the European Parliament and

the Council; "Single Resolution Fund" means the fund established according Interpretation. Amended by: XXI. 2016.3. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM to Regulation (EU) No. 806/2014

the European Parliament and

the Council

15 July 2014 establishing uniform rules and a uniform procedure for the resolution

credit institutions and certain investment firms in the framework

a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010

the European Parliament and

the Council; "Single Supervisory Mechanism" means the mechanism established through Council Regulation (EU) No. 1024/2013

15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision

credit institutions; Authority to participate in Single Resolution Fund. Amended by: XXI. 2016.4. "transitional period" means the period from the 1st January 2016 until the date when the Fund reaches the target level fixed in Article 69

the Single Resolution Mechanism Regulation or 1st January 2024, whichever is earlier. 3.

this Act, the Government

Malta shall participate in the Agreement relative to transfer and mutualisation

contributions to the Single Resolution Fund during the transitional period, in accordance with the terms and conditions set out in the Agreement, as may be amended from time to time, for the purposes identified under sub-article

contributions to the Single Resolution Fund and for the recourse to the compartments allotted to participating Member States in the Single Resolution Fund in times

economic crisis. Ratification

the Agreement. 4. The Government

Malta is hereby authorised to ratify the Agreement. Granting

contributions during the transitional period. 5. Any contribution granted by the Government

Malta, beyond the purpose specified under article 3

Representatives may by resolution determine. Power to make regulations. 6. The Minister may make regulations to carry out any

the obligations under the Agreement. Public Accounts Committee. 7. The Minister shall appear at least once a year before the Public Accounts Committee or before another committee

the House

Representatives which from time to time may be tasked with the economic and financial scrutiny

Government for the purpose

rendering account

the workings

the Single Resolution Fund insofar as this is in conformity with the obligations

Malta. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM SCHEDULE (Article 2) AGREEMENT ON THE TRANSFER AND MUTUALISATION

CONTRIBUTIONS TO THE SINGLE RESOLUTION FUND THE CONTRACTING PARTIES, the Kingdom

Belgium, the Republic

Bulgaria, the Czech Republic, the Kingdom

Denmark, the Federal Republic

Germany, the Republic

Estonia, Ireland, the Hellenic Republic, the Kingdom

Spain, the French Republic, the Republic

Croatia, the Italian Republic, the Republic

Cyprus, the Republic

Latvia, the Republic

Lithuania, the Grand Duchy

Luxembourg, Hungary, the Republic

Malta, the Kingdom

the Netherlands, the Republic

Austria, the Republic

Poland, the Portuguese Republic, Romania, the Republic

Slovenia, the Slovak Republic and the Republic

Finland; COMMITTED TO achieving the establishment

an integrated financial framework in the European Union

which the banking union is a fundamental part; RECALLING the Decision

the representatives

the euro area Member States meeting within the Council

the European Union

18 December 2013, related to the negotiation and conclusion

an intergovernmental agreement concerning the Single Resolution Fund ("the Fund") established according to Regulation

the European Parliament and

the Council establishing uniform rules and a uniform procedure for the resolution

credit institutions and certain investment firms in the framework

a Single Resolution Mechanism and a Single Resolution Fund* ("SRM Regulation"), as well as the Terms

Reference attached to that Decision; WHEREAS:

legal acts fundamental for the achievement

the internal market in the field

financial services and for guaranteeing the financial stability

the euro area and

the Union as a whole, as well as for the process towards deeper economic and monetary union.

a "European single rule book applicable to all financial institutions in the Single Market". The Union has thus established a single set

harmonised prudential rules, which credit institutions throughout the Union must respect, through Regulation (EU) No. 575/2013

the European Parliament and

the Council # and Directive 2013/36/EU

the European Parliament and

the Council+.

tasks on micro-prudential supervision are allocated. They are * Regulation

the European Parliament and

the Council establishing uniform rules and a uniform procedure for the resolution

credit institutions and certain investment firms in the framework

a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010

the European Parliament and

the Council. # Regulation (EU) No. 575/2013

the European Parliament and

the Council

26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (OJ L 176, 27.6.2013, p. 1). + Directive 2013/36/EU

the European Parliament and

the Council

26 June 2013 on access to the activity

credit institutions and the prudential supervision

credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338). PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM the European Banking Authority (EBA) established by Regulation (EU) No. 1093/ 2010

the European Parliament and

the Council * the European Insurance and Occupational Pensions Authority (EIOPA) established by Regulation (EU) No. 1094/ 2010

the European Parliament and

the Council # and the European Securities and Markets Authority (ESMA) established by Regulation (EU) No. 1095/2010

the European Parliament and

the Council + . That was accompanied by the establishment

the European Systemic Risk Board by Regulation (EU) No. 1092/ 2010

the European Parliament and

the Council ¢ to which some functions

macro-prudential supervision have been allocated.

credit institutions, and conferring upon the ECB, acting jointly with the national competent authorities, powers

supervision over the credit institutions established in the Member States whose currency is the euro and in the Member States whose currency is not the euro which have established a close cooperation with the ECB for supervision purposes ("the participating Member States").

the European Parliament and

the Council establishing a framework for the recovery and resolution

credit institutions and investment firms ## ("BRR Directive"), the Union harmonises national laws and regulations on the resolution

credit institutions and certain investment firms, including the establishment

national resolution financing arrangements.

13/14 December 2012 stated that "In a context where bank supervision is effectively moved to a single supervisory mechanism, a single resolution mechanism will be required, with the necessary powers to ensure that any bank in participating Member States can be resolved with the appropriate tools.". The European Council

13/14 December 2012 further stated that "The * Regulation (EU) No. 1093/2010

the European Parliament and

the Council 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12). # Regulation (EU) No. 1094/2010

the European Parliament and the Council

24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48). + Regulation (EU) No. 1095/2010

the European Parliament and

the Council 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/ 77/EC (OJ L 331, 15.12.2010, p. 84). ¢ Regulation (EU) No. 1092/2010

the European Parliament and

the Council

24 November 2010 on European Union macro-prudential oversight

the financial system and establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1). ** Council Regulation (EU) No. 1024/2013

15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision

credit institutions (OJ L 287, 29.10.2013, p. 63). ## Directive

the European Parliament and

the Council establishing a framework for the recovery and resolution

credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No. 1093/ 2010 and (EU) No. 648/2012,

the European Parliament and

the Council PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM single resolution mechanism should be based on contributions by the financial sector itself and include appropriate and effective backstop arrangements. This backstop should be fiscally neutral over the medium term, by ensuring that public assistance is recouped by means

ex post levies on the financial industry.". The Union has, in that context, adopted the SRM Regulation which creates a centralised system

decision making for resolution, endowed with the adequate financing means through the establishment

the Fund. The SRM Regulation applies to the entities located in the participating Member States.

ex ante and ex post contributions

institutions necessary for the financing

the Fund, as well as the obligation

Member States to levy them at national level. Nonetheless, the participating Member States who raise the contributions on the institutions located in their respective territories according to the BRR Directive and the SRM Regulation, remain competent to transfer those contributions towards the Fund. The obligation to transfer the contributions raised at national level towards the Fund does not derive from the law

the Union. Such obligation will be established by this Agreement which lays down the conditions upon which the Contracting Parties, in accordance with their respective constitutional requirements, jointly agree to transfer the contributions that they raise at national level to the Fund.

each

the participating Member States to transfer contributions raised at national level should be exercised in such a manner that respects the principle

sincere cooperation enshrined in Article 4

the Treaty on European Union (TEU), according to which Member States shall to, inter alia, facilitate the achievement

the Union's tasks and refrain from any measure which could jeopardise the attainment

the Union's objectives. For that reason, participating Member States should ensure that financial resources are uniformly channelled towards the Fund, hence guaranteeing its proper functioning.

the contributions they raise at national level to different compartments corresponding to each Contracting Party, as well as the progressive mutualisation

the use

the compartments in such a manner that the compartments will cease to exist at the end

that transitional period.

resolution to tax payers and will consider the overall burden on the respective banking sectors when designing the contributions to the Fund and their tax treatment.

this Agreement is limited to those specific elements concerning the Fund that remain within the competence

Member States. This Agreement does not affect common rules established under the law

the Union nor does it alter their scope. It is rather designed as complementary to the Union legislation on banking resolution and as supportive and intrinsically linked to the achievement

Union policies, in particular the establishment

the internal market in the field

financial services.

national financing arrangements, start to apply as from 1 January 2015. The provisions concerning the establishment

the Fund PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM under the SRM Regulation will be, in principle, applicable as from 1 January 2016. As a consequence, the Contracting Parties will raise contributions earmarked to the national resolution financing arrangement they are to establish up to the date

application

the SRM Regulation, at which date they will start raising the contributions earmarked to the Fund. In order to reinforce the financial capacity

the Fund as

its inception, the Contracting Parties commit to transfer to the Fund the contributions they have raised by virtue

the BRR Directive up to the date

application

the SRM Regulation.

the Eurogroup and

the Council

18 December 2013, in order to ensure continuous sufficient financing during the transitional period, the Contracting Parties concerned by a particular resolution action should provide bridge financing from national sources or the European Stability Mechanism ("ESM") in line with agreed procedures, including the setting up

possibilities for temporary transfers between national compartments. The Contracting Parties should have in place procedures allowing them to address any request for bridge financing in a timely manner. A common backstop will be developed during the transitional period. Such a backstop will facilitate borrowings by the Fund. The banking sector will ultimately be liable for repayment by means

contributions in all participating Member States, including ex post contributions. Those arrangements will ensure equivalent treatment across all Contracting Parties participating in the Single Supervisory Mechanism and the Single Resolution Mechanism, including Contracting Parties joining at a later stage, in terms

rights and obligations and both in the transition period and in the steady state. Those arrangements will respect a level playing field with Member States that do not participate in the Single Supervisory Mechanism and in the Single Resolution Mechanism.

the Contracting Parties, as from the date when they effectively adopt the euro as currency or, otherwise, as from the date

entry into force

the ECB decision on close cooperation referred to in Article 7

Regulation (EU) No. 1024/2013.

the Governments

the Member States authorized the Contracting Parties to request the European Commission and the Single Resolution Board ("the Board") to perform the tasks provided for in this Agreement.

the SRM Regulation, as on the date

its initial adoption, establishes general principles governing resolution, pursuant to which the shareholders

the institution under resolution bear first losses and the creditors

the institution under resolution bear losses after the shareholders in accordance with the order

priority

their claims. Article 27

the SRM Regulation lays down accordingly a bail-in tool that requires that a contribution to loss absorption and recapitalisation equal to an amount not less than 8%

the total liabilities including own funds

the institution under resolution, measured at the time

resolution action in accordance with the valuation provided for in Article 20

the SRM PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM Regulation, has been made by shareholders, the holders

relevant capital instruments and other eligible liabilities through write down, conversion or otherwise, and also requires that the contribution from the Fund does not exceed 5%

the total liabilities including own funds

the institution under resolution, measured at the time

resolution action in accordance with the valuation provided for in Article 20

the SRM Regulation, unless all unsecured, non-preferred liabilities, other than eligible deposits, have been written down or converted in full. Moreover, Articles 18, 52 and 55

the SRM Regulation, as on the date

its initial adoption, establish a number

procedural rules on decision making

the Board and the institutions

the Union. Those elements

the SRM Regulation constitute an essential basis for the consent

the Contracting Parties to be bound by this Agreement.

the Vienna Convention on Law

Treaties as well as international customary law shall apply in respect

any fundamental change

circumstances that has taken place against their will and that affects the essential basis

the consent

the Contracting Parties to be bound by the provisions

this Agreement, as referred to in recital

any fundamental change

circumstances that has taken place against their will, pursuant t o public i nternational law. If a Contracting Party invokes such consequences, any other Contracting Party can submit the matter to the Court

Justice

the European Union ("Court

Justice"). The Court

Justice should be granted the power to verify the existence

any fundamental change

circumstances and the consequences deriving from it. The Contracting Parties recognise that such invocation

consequences after the repeal or the amendment

any

the elements

the SRM Regulation referred to in recital

any

the Contracting Parties and which is susceptible

affecting the essential basis

their consent to be bound by the provisions

this Agreement, will amount to a dispute concerning the application

this Agreement for the purposes

Article 273

the Treaty on the Functioning

the European Union (TFEU) that can therefore be submitted to the Court

Justice by virtue

that provision. Any Contracting Party may also ask the Court

Justice for interim measures, in accordance with Article 278 TFEU and Articles 160 to 162

the Rules

Procedure

the Court

Justice. * When deciding on the dispute, as well as on the granting

interim measures, the Court

Justice should take into account the obligations

the Contracting Parties under TEU and TFEU, including those relating to the Single Resolution Mechanism and its integrity.

the Union, the Board and the national resolution authorities apply the bail-in tool in a manner which is compatible with the law

the Union falls within the powers

the Court

Justice in accordance with the legal remedies laid down in TEU and TFEU, namely Articles 258, 259, 260, 263, 265 and 266 TFEU.

public international law, the rights and obligations laid down in this Agreement are subject to the principle

reciprocity. Accordingly, the consent by each

the Contracting Parties to be bound by this Agreement depends upon the equivalent performance

the rights and obligations incumbent on each

the Contracting Parties. As a consequence, the breach by any

the Contracting Parties

its obligation to transfer the contributions towards the Fund should entail the exclusion

the entities authorised in their territories from access to the Fund. * Rules

Procedure

the Court

Justice

25 September 2012 (OJ L 265, 29.9.2012, p.1), including any subsequent amendments. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM The Board and the Court

Justice should be granted the power to determine and declare whether the Contracting Parties have breached their commitment to transfer the contributions, in accordance with the procedures laid down in this Agreement. The Contracting Parties recognise that in case

a breach

the obligation to transfer the contributions, the only legal consequence will be the exclusion

the Contracting Party that has committed the breach from financing under the Fund and that the obligations

the other Contracting Parties under the Agreement shall remain unaffected.

the general budget

the Union in cases

non-contractual liability and costs related thereto, in respect

the exercise

powers by the institutions

the Union under the SRM Regulation. The liability

each participating Member State under this arrangement should be separate and individual, and not joint and several, and hence each

the participating Member States should respond only for their part

the obligation

reimbursement as determined in accordance with this Agreement.

this Agreement arising between the Contracting Parties, including those concerning compliance with the obligations laid down therein, should be submitted to the jurisdiction

the Court

Justice in accordance with Article 273 TFEU. Member States whose currency is not the euro that are not parties to this Agreement should be able to submit to the Court

Justice any dispute on the interpretation and enforcement

the provisions on compensation for non-contractual liability and costs related thereto laid down in this Agreement.

contributions by Contracting Parties which become part

the Single Supervisory Mechanism and

the Single Resolution Mechanism at a date subsequent to the date

application

this Agreement should be made respecting the principle

equality

treatment with the Contracting Parties that participate in the Single Supervisory Mechanism and in the Single Resolution Mechanism at the date

application

this Agreement. Contracting Parties participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism at the date

application

this Agreement are not supposed to bear the burden

resolutions to which the national financial arrangements

those participating at a later stage were supposed to contribute. Likewise, the latter are not supposed to bear the cost

resolutions, arising before the date when they become participating Member States, for which the Fund should be liable.

a Contracting Party, whose currency is not the euro, is terminated in accordance with Article 7

Regulation (EU) No. 1024/2013, a fair partition

the cumulated contributions from the Contracting Party concerned should be decided taking into account the interests

both the Contracting Party concerned and the Fund. Accordingly, Article 4

the SRM Regulation lays down the modalities, criteria and the procedure for the Board to agree with the Member State concerned by termination

close cooperation on the recoupment

contributions transferred by that Member State.

the Treaties on which the European Union is founded, the Contracting Parties’ objective is to incorporate the substance provisions

this Agreement, in accordance with the TEU and the TFEU as soon as possible into the legal framework

the Union. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM HAVE AGREED UPON THE FOLLOWING PROVISIONS: TITLE I PURPOSE AND SCOPE ARTICLE 1 1. By this Agreement, the Contracting Parties commit to: (

1. a)transferring the contributions raised at national level in accordance with the BRR Directive and the SRM Regulation to the Single Resolution Fund ("the Fund") established by that Regulation; and (
2. b)allocating, during a transitional period starting at the date

application

this Agreement as determined under Article 12

this Agreement and elapsing at the date when the Fund reaches the target level fixed in Article 69

the SRM Regulation but not later than 8 years after the date

application

this Agreement (the transitional period), the contributions they raise at national level in accordance with the SRM Regulation and the BRR Directive to different compartments corresponding to each Contracting Party. The use

the compartments shall be subject to a progressive mutualisation in such a manner that they will cease to exist at the end

the transitional period, thereby supporting the effective operations and functioning

the Fund. 2. This Agreement shall apply to the Contracting Parties whose institutions are subject to the Single Supervisory Mechanism and the Single Resolution Mechanism, in accordance with the relevant provisions

, respectively, Regulation (EU) No. 1024/2013 and

the SRM Regulation (the Contracting Parties participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism). TITLE II CONSISTENCY AND RELATIONSHIP WITH THE LAW

THE UNION ARTICLE 2 1. This Agreement shall be applied and interpreted by the Contracting Parties in conformity with the Treaties on which the European Union is founded and with European Union law, in particular Article 4

the TEU and Union legislation concerning the resolution

institutions. 2. This Agreement shall apply insofar as it is compatible with the Treaties on which the European Union is founded and with the Union law. It shall not encroach upon the competences

the Union to act in the field

the internal market. 3. For the purposes

this Agreement, the relevant definitions set out in Article 3

the SRM Regulation shall apply. TITLE III TRANSFER

CONTRIBUTIONS AND COMPARTMENTS ARTICLE 3 Transfer

contributions 1. The Contracting Parties jointly commit to irrevocably transfer to the Fund the contributions that they raise from the institutions authorised in each

their territories by virtue

Articles 70 and 71

the SRM Regulation, and in accordance with the criteria laid down therein and in the delegated and implementing acts to which they refer. The transfer

contributions shall take place in accordance with the conditions laid down under Articles 4 to 10

this Agreement. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM 2. The Contracting Parties shall transfer the ex ante contributions corresponding to every year by 30 June

that year at the latest. The initial transfer

ex ante contributions to the Fund will take place by 30 June 2016 at the latest or, if the Agreement has not entered into force by that date, six months after its date

entry into force at the latest. 3. Contributions raised by the Contracting Parties in accordance with Articles 103 and 104

the BRR Directive before the date

application

this Agreement shall be transferred to the Fund by 31 January 2016 at the latest or, if the Agreement has not entered into force by that date, one month after its date

entry into force at the latest. 4. Any amount disbursed by the resolution financing arrangement

a Contracting Party before the date

application

this Agreement in respect

resolution actions within its territory shall be deducted from those contributions to be transferred by that Contracting Party towards the Fund referred to in paragraph 3. In such a case, the Contracting Party in question shall remain bound to transfer towards the Fund an amount equivalent to that which would have been necessary to achieve the target level

its resolution financing arrangement, in accordance with Article 102

the BRR Directive and within the deadlines therein provided.

1. The Contracting Parties shall transfer ex post contributions immediately after their collection. ARTICLE 4 Compartments
2. During the transitional period contributions raised at national level shall be transferred to the Fund in such a manner that they are allocated to compartments corresponding to each Contracting Party.
3. The size

the compartments

each Contracting Party shall be equal to the totality

contributions payable by the institutions authorized in each

their territories pursuant to Articles 69 and 70

the SRM Regulation as well as to the delegated and implementing acts referred to therein. 3. The Board shall, at the date

entry into force

this Agreement, draw a list for information purposes only detailing the size

the compartments

each Contracting Party. That list shall be updated every year

the transitional period. ARTICLE 5 Functioning

the compartments 1. Where in accordance with the relevant provisions

the SRM Regulation recourse to the Fund is decided, the Board shall have the power to dispose

the compartments

the Fund in the following manner: (a) In the first place, costs shall be borne by the compartments corresponding to the Contracting Parties where the institution or the group under resolution are established or authorised. When a cross-border group is under resolution, costs shall be distributed between the different compartments corresponding to the Contracting Parties where the parent undertaking and subsidiaries are established or authorised in proportion to the relative amount

contributions that each

the entities

the group under resolution has provided to their respective compartments with respect to the aggregate amount

contributions that all the entities

the group have provided to their national compartments. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM In case a Contracting Party where the parent undertaking or subsidiary are established or authorised considers that the application

this criterion for distribution

costs referred to in the first subparagraph leads to a large asymmetry between the distribution

costs between compartments and the risk profile

the entities concerned by resolution, it may request to the Board to consider, additionally and without any delay, the criteria laid down under Article 107

the BRR Directive. If the Board does not follow the request submitted by the Contracting Party concerned, it shall explain its position publicly. Recourse shall be had to the financial means available within the compartments corresponding to the Contracting Parties referred to in the first subparagraph, up to the cost that each national compartment is due to contribute according to the criteria for distribution

costs laid down in the first and second subparagraphs, in the following manner: during the first year

the transitional period, recourse shall be had to all the financial means available within the said compartments; during the second and third year

the transitional period, recourse shall be had to the 60% and 40% respectively

financial means available within the said compartments; during the subsequent years

the transitional period, the availability

the financial means in the compartments corresponding to these relevant Contracting Parties shall decrease annually by 6⅔ percentage points. The referred decrease per year

the availability

financial means in the compartments corresponding to the relevant Contracting Parties shall be spread evenly per quarter. (b) In the second place, if financial means available in the compartments

the Contracting Parties concerned referred to in point (a) are not sufficient to comply with the mission

the Fund as referred to in Article 76

the SRM Regulation, recourse shall be had to the available financial means in the compartments

the Fund corresponding to all the Contracting Parties. The financial means available in the compartments

all the Contracting Parties shall be supplemented, to the same degree specified in the third subparagraph

this point, by the remaining financial means in the national compartments corresponding to the Contracting Parties concerned by resolution referred to in point (a). In case

a cross-border group resolution, the allocation

financial means made available between the compartments

the Contracting Parties concerned pursuant to the first and second subparagraphs

this point shall follow the same key for the distribution

costs among them, as laid down under point (a). If the institution or institutions authorised in one

the Contracting Parties concerned subject to the group resolution do not need the totality

the financial means available under this point (b), the available financial means not needed under this point (b) shall be used in the resolution

the entities authorised in the other Contracting Parties concerned by the group resolution. During the transitional period, recourse to all the national compartments

the Contracting Parties shall be made in the following manner: PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM - during the first and second year

the transitional period, recourse shall be had to the 40% and 60% respectively

the financial means available within the said compartments; during the subsequent years

the transition period, the availability

the financial means in the said compartments shall increase annually by 6⅔ percentage points. The referred increase per year

the availability

the financial means in all the national compartments

the Contracting Parties shall be spread evenly per quarter. (

1. c)In the third place, if the financial means used in accordance with point (
2. b)are not sufficient to comply with the mission

the Fund as referred to in Article 76

the SRM Regulation, recourse shall be had to any remaining financial means in the compartments corresponding to the Contracting Parties concerned referred to in point (a). In case

cross-border group resolution, recourse shall be had to the compartments

the Contracting Parties concerned that have not provided enough financial means under points (a) and (b) in relation to the resolution

entities authorised in their territories. Contributions by each compartment shall be determined according to the criteria for distribution

costs laid down in point (a). (d) In the fourth place, and without prejudice to the powers

the Board referred to under point (e), if the financial means referred to in point (c) are not sufficient to cover the costs

a particular resolution action, the Contracting Parties concerned referred to in point (a) shall transfer to the Fund the extraordinary ex post contributions from the institutions authorized in their respective territories, raised in accordance with the criteria laid down in Article 71

the SRM Regulation. In the case

cross-border group resolution, ex post contributions shall be transferred by the Contracting Parties concerned that have not provided enough financial means under points (a) to (c) in relation to the resolution

entities authorised in their territories. (

1. e)If the financial means referred to in point (
2. c)are not sufficient to cover the costs

a particular resolution action, and as long as extraordinary ex post contributions referred to in point (d) are not immediately accessible, including for reasons relating to the stability

the institutions concerned, the Board may exercise its power to contract for the Fund borrowings or other forms

support in accordance with Articles 73 and 74

the SRM Regulation, or its power to make temporary transfers between compartments in accordance with Article 7

this Agreement. In case the Board decides to exercise the powers referred to in the first subparagraph

this point, the Contracting Parties concerned referred to in point (d) shall transfer to the Fund the extraordinary ex post contributions in order to reimburse the borrowings or other form

support, or the temporary transfer between compartments. 2. Returns

investments

the amounts transferred to the Fund, in accordance with Article 75

the SRM Regulation, shall be allocated to each

the compartments pro rata on the basis

their respective available financial means, excluding any claims or irrevocable payment commitments for the purposes

Article 76

the SRM Regulation attributable to each compartment. Returns

PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM investments

the resolution operations that the Fund may undertake, in accordance w i t h Ar t i c l e 7 6 o f t h e S R M R eg u l a t i o n , s h a l l b e a l l o c a t e d t o e a c h o f t h e compartments pro rata on the basis

their respective contribution to a particular resolution action. 3. All the compartments shall be merged and shall cease to exist after the elapsing

the transitional period. ARTICLE 6 Transfer

additional ex ante contributions and target level 1. The Contracting Parties shall ensure that, where appropriate, they replenish the Fund through ex ante contributions, to be paid within the periods laid down in Article 69

the SRM Regulation in an amount equivalent to that required to achieve the target level specified in Article 69

the SRM Regulation. 2. During the transitional period, the transfer

contributions related to replenishment shall be distributed between the compartments in the following manner: (a) the Contracting Parties concerned by resolution shall transfer contributions to the part

their compartment that has not yet been subject to mutualisation in accordance with points (a) and (b)

Article 5

their respective compartments subject to mutualisation in accordance with points (a) and (b)

Article 5(1).

ARTICLE 7 Temporary transfer between compartments 1. Without prejudice to the obligations laid down under points (a) to (d)

Article 5

the part

the financial means available in the compartments

the Fund not yet mutualised corresponding to the other Contracting Parties. In such a case, the Contracting Parties concerned shall subsequently transfer to the Fund, before the transitional period has elapsed, extraordinary ex post contributions in an amount equivalent to the one received by their compartments, plus the interest accrued, so that the other compartments are refunded. 2. The amount temporarily transferred from each

the compartments to the recipient ones shall be pro rata to their size, as determined under Article 4

the available financial means within each compartment not yet subject to mutualisation. In case

cross-border group resolution, the allocation

financial means made available between the compartments

the Contracting Parties concerned pursuant to this paragraph shall follow the same key for the distribution

costs among them, as laid down under point (a)

Article 5(1).

3. Decisions

the Board on the request for the temporary transfer

financial means between compartments referred to in paragraph 1 shall be taken by simple majority

the members

its plenary session, as specified in Article 52

the SRM Regulation. In its decision on temporary transfer, the Board shall specify the rate

interest, the period for refunding and other terms and conditions concerning the transfer

financial means between compartments. 4. The decision

the Board agreeing on the temporary transfer

financial means referred to in paragraph 3 may only enter into force if no objection has been expressed by any

the Contracting Parties from whose compartments the transfer PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM has been made within a period

four calendar days since the date

adoption

the decision. During the transitional period, the right

objection

a Contracting Party may only be exercised if: (a) it might require the financial means from the national compartment that corresponds to it to finance a resolution operation in the near term or if the temporary transfer would jeopardise the conduct

an ongoing resolution action within its territory; (b) the temporary transfer would take more than the 25%

its part

the national compartment not yet subject to mutualisation in accordance with points (a) and (b)

Article 5

refunding from national sources or support from the ESM in line with agreed procedures. The Contracting Party intending to object shall duly substantiate the occurrence

any

the circumstances referred to in points (a) to (c). In case objections are raised in accordance with this paragraph, the decision on temporary transfer

the Board shall be adopted excluding the financial means

the compartments

the objecting Contracting Parties. 5. If an institution

a Contracting Party from whose compartment financial means have been transferred by virtue

this Article is subject to resolution, that Contracting Party may request t he Board to transfer from t he Fund to its compartment an amount equivalent to that initially transferred from that compartment. The Board shall, upon such a request, agree immediately on the transfer. In such a case, the Contracting Parties that initially benefited from the temporary use

financial means shall be held liable to transfer to the Fund the amounts allocated to the Contracting Party concerned pursuant to the first subparagraph, in accordance with the terms and conditions to be specified by the Board. 6. The Board shall specify general criteria determining the conditions upon which the temporary transfer

financial means among compartments envisaged in this Article shall take place. ARTICLE 8 Contracting Parties whose currency is not the euro 1. In the case that at a date subsequent to the one

application

this Agreement under Article 12

the European Union abrogating the derogation

a Contracting Party whose currency is not the euro, as defined in Article 139

any such decision, a Contracting Party whose currency is not the euro becomes part

the Single Supervisory Mechanism and

the Single Resolution Mechanism, it shall transfer towards the Fund an amount

contributions raised in its territory equivalent to the part

the total target level for its national compartment calculated in accordance with Article 4

PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM application

this Agreement under Article 12

a Contracting Party referred to in paragraph 1 in respect

resolution actions within its territory shall be deducted from those to be transferred by that Contracting Party towards the Fund by virtue

paragraph 1. In such a case, the Contracting Party in question shall remain bound to transfer towards the Fund an amount equivalent to that which would have been necessary to achieve the target level

its resolution financing arrangement, in accordance with Article 102

the BRR Directive and within the deadlines therein provided. 3. The Board shall determine, in agreement with the Contracting Party concerned, the exact amount

contributions to be transferred by it, pursuant to the criteria laid down in paragraphs 1 and 2. 4. The costs

any resolution action initiated in the territory

the Contracting Parties whose currency is not the euro before the date when the decision abrogating their derogation, as defined in Article 139

entry into force

the decision

the ECB on close cooperation referred to in Article 7

Regulation (EU) No. 1024/2013 shall not be borne by the Fund. If the ECB, in its comprehensive assessment

the credit institutions referred to in point (b)

Article 7

Regulation (EU) No. 1024/2013, considers that any

the institutions

the Contracting Parties concerned is failing or likely to fail, resolution costs

resolution actions

those credit institutions shall not be borne by the Fund. 5. In case

termination

close cooperation with the ECB, contributions transferred by the Contracting Party concerned by termination are recouped in accordance with Article 4

the SRM Regulation. Termination

close cooperation with the ECB shall not affect the rights and obligations

the Contracting Parties stemming from resolution actions that have taken place during the period in which those Contracting Parties are subject to this Agreement and that are related to: - the transfer

ex post contributions, under point (d)

Article 5

the Fund, under Article 6; and the temporary transfer between compartments, under Article 7. ARTICLE 9 Respect

the general principles and objectives

resolution 1. The use

the Fund on a mutual basis and the transfer

contributions to the Fund shall be contingent upon the permanence

a legal framework on resolution whose rules are equivalent to, and lead at least to the same result

those under the SRM Regulation as laid down in the following rules, and without changing them: (a) The procedural rules on the adoption

a resolution scheme as laid down under Article 18

the SRM Regulation; (b) The Board's decision-making rules as laid down in Articles 52 and 55

the SRM Regulation; (c) General principles concerning resolution as laid down in Article 15

the SRM Regulation, notably the principles that the shareholders

the institution under resolution bear first losses and that the creditors

the institution under resolution bear losses after the shareholders in accordance with the order

priority

their claims, enshrined in points (a) and (b)

paragraph

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM (d) The rules on the resolution tools referred to under Article 22

the SRM Regulation, notably those concerning the application

the bail-in tool laid down under Article 27 thereof and in Articles 43 and 44

the BRR Directive and the specific thresholds that they establish related to the imposition

losses on shareholders and on creditors and the contribution

the Fund to a particular resolution action. 2. In case the rules concerning resolution referred to in paragraph 1, provided for in the SRM Regulation as on the date

its initial adoption, are repealed, or otherwise amended against the will

any Contracting Party, including the adoption

bail-in rules in a manner which is not equivalent or that does not lead, at least, to the same and not less stringent result than that deriving from the SRM Regulation as on the date

its initial adoption, and this Contracting Party exercises its rights under public international law regarding a fundamental change

circumstances, any other Contracting Party may, on the basis

Article 14

this Agreement, request the Court

Justice to verify the existence

a fundamental change

circumstances and the consequences ensuing from it, in accordance with public international law. In its application, any Contracting Party may request the Court

Justice to suspend the operation

a measure which is the object

the dispute, in which case Article 278 TFEU and Articles 160 to 162

the Rules

Procedure

the Court

Justice shall be applicable. 3. The procedure referred to in paragraph 2

this Article shall not prejudge or affect recourse to legal remedies provided for under Articles 258, 259, 260, 263, 265 and 266 TFEU. ARTICLE 10 Compliance

1. Contracting Parties shall take the necessary measures in their national legal orders to ensure compliance with their obligation to jointly transfer the contributions in accordance with this Agreement.
2. Without prejudice to the power

the Court

Justice under Article 14

this Agreement, the Board, acting on its own initiative or at the request

any Contracting Party, may consider whether a Contracting Party has failed to comply with its obligation to transfer the contributions to the Fund, as established in this Agreement. In case the Board finds that a Contracting Party has failed to comply with its obligation to transfer the contributions, it shall set a deadline for the Contracting Party concerned to take the necessary measures in order to put an end to the breach. In case the Contracting Party concerned does not take the necessary measures to put an end to the breach within the deadline fixed by the Board, the use

compartments

all the Contracting Parties as laid down in point (b)

Article 5

institutions authorised in the Contracting Party concerned. That exclusion shall cease to apply as from the moment when the Board determines that the Contracting Party concerned has taken the necessary measures to put an end to the breach. 3. Decisions

the Board under this Article shall be taken by simple majority

the Chair and the members referred to in point (b)

Article 43

the SRM Regulation. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM TITLE IV GENERAL AND FINAL PROVISIONS ARTICLE 11 Ratification, approval or acceptance and entry into force 1. This Agreement shall be subject to ratification, approval or acceptance by its signatories in accordance with their respective constitutional requirements. The instruments

ratification, approval or acceptance shall be deposited with the General Secretariat

the Council

the European Union ("the Depositary"). The Depositary shall notify the other signatories

each deposit and the date thereof. 2. This Agreement shall enter into force on the first day

the second month following the date when instruments

ratification, approval or acceptance have been deposited by signatories participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism that represent no less than 90%

the aggregate

the weighted votes

all Member States participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism, as determined by Protocol (No. 36) on transitional provisions annexed to the TEU and the TFEU. ARTICLE 12 Application 1. This Agreement shall apply amongst the Contracting Parties that have deposited their instruments

ratification, approval or acceptance provided that the SRM Regulation has previously entered into force. 2. Subject to paragraph 1

this Article, and provided that this Agreement has entered into force in accordance with Article 11

ratification, approval or acceptance by that date. If this Agreement has not entered into force by 1 January 2016 it shall apply as from its date

entry into force, amongst the Contracting Parties participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism that have deposited their instruments

ratification, approval or acceptance by that date. 3. This Agreement shall apply to the Contracting Parties participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism that have not deposited their instruments

ratification, approval or acceptance by the date

application under paragraph 2, as from the first day

the month following the deposit

their respective instrument

ratification, approval or acceptance. 4. This Agreement shall not apply to the Contracting Parties that have deposited their instruments

ratification, approval or acceptance but that do not participate in the Single Supervisory Mechanism and in the Single Resolution Mechanism by the date

application

this Agreement. Those Contracting Parties shall however be part

the special agreement referred to in Article 14

application

this Agreement for the purposes

submitting to the Court

Justice any dispute concerning the interpretation and enforcement

Article 15

. It shall apply to the Contracting Parties referred to in the first subparagraph as from the date when the decision abrogating their derogation, as defined in Article 139

entry into force

the ECB decision on close cooperation referred to in Article 7

Regulation (EU) No. 1024/2013. Subject to its Article 8, this Agreement shall cease to apply to the Contracting PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM Parties that have established the close cooperation with the ECB referred to in Article 7

Regulation (EU) No. 1024/2013 as from the date

termination

that close cooperation in accordance with Article 7

that Regulation. ARTICLE 13 Accession This Agreement shall be open to accession by Member States other than the Contracting Parties. Subject to paragraphs 1 to 3

Article 8

accession shall be effective upon depositing the instrument

accession with the Depositary, which shall notify the other Contracting Parties thereof. Following authentication by the Contracting Parties, the text

this Agreement, in the

ficial language

the acceding Member State that is also an

ficial language

the institutions

the Union, shall be deposited in the archives

the Depositary as an authentic text

this Agreement. ARTICLE 14 Dispute settlement 1. Where a Contracting Party disagrees with another Contracting Party on the interpretation

any

the provisions

this Agreement or when it considers that another Contracting Party has failed to comply with its obligations under this Agreement, it may bring the matter before the Court

Justice. The judgment

the Court

Justice shall be binding on the parties to the proceedings. If the Court

Justice finds that a Contracting Party has failed to comply with its obligations under this Agreement, the Contracting Party concerned shall take the necessary measures to comply with the judgment within a period to be decided by the Court

Justice. In case the Contracting Party concerned does not take the necessary measures to put an end to the breach within the deadline fixed by the Court

Justice, the use

compartments

all the Contracting Parties as laid down in point (b)

Article 5

Article 273TFEU.

3. Member States whose currency is not the euro that have not ratified this Agreement may notify the Depositary

their intention to be party to the special agreement referred to in paragraph 2

this Article for the purposes

submitting to the Court

Justice any dispute concerning the interpretation and enforcement

Article 15

. The Depositary shall communicate the notification by the Member State concerned to the Contracting Parties, upon which communication the Member State concerned shall become party to the special agreement referred to in paragraph 2

this Article for the purposes described in this paragraph. ARTICLE 15 Compensation 1. The Contracting Parties commit to reimburse jointly, promptly and with interest each Member State that is not participating in the Single Supervisory Mechanism and in the Single Resolution Mechanism ("non-participating Member State") for the amount that that non-participating Member State has paid in own resources corresponding to the use

the general budget

the Union in cases

non-contractual liability and costs related thereto, in respect

the exercise

powers by the institutions

the Union under the SRM Regulation. 2. The amount that each

the non-participating Member States is deemed to have contributed to the non-contractual liability and costs related thereto shall be PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM determined pro rata on the basis

their respective gross national income determined in accordance with Article 2

Council Decision 2007/436/EC, Euratom * or with any ensuing Union act amending or repealing it. 3. Compensation costs shall be distributed among the Contracting Parties pro rata on the basis

the weight

their respective gross national income, as determined in accordance with Article 2

Council Decision 2007/436/EC, Euratom or with any ensuing Union act amending or repealing it. 4. The non-participating Member States shall be reimbursed on the dates

the entries in the accounts referred to in Article 9

Council Regulation (EC, Euratom) No. 1150/2000 #or in any ensuing Union act amending or repealing it,

the amounts corresponding to the payments from the Union budget to settle the non-contractual liability and costs related thereto following the adoption

the associated amending budget. Any interest shall be calculated in accordance with the provisions on interest for amounts made available belatedly applicable to the Union's own resources. Amounts shall be converted between national currencies and the euro at an exchange rate determined in accordance with the first subparagraph

Article 10

Council Regulation (EC, Euratom) No. 1150/2000 or with any ensuing Union act amending or repealing it.

1. The Commission shall coordinate any reimbursement action by the Contracting Parties, in accordance with the criteria laid down under paragraphs 1 to
2. The Commission’s coordination role shall include calculating the basis on which payments are to be made, issuing notices to the Contracting Parties requiring payments to be made and calculating interest. ARTICLE 16 Review
3. Within two years

the date

entry into force

this Agreement, at the latest and every 18 months thereafter, the Board shall assess and present to the European Parliament and to the Council a report on the implementation

this Agreement and in particular on the proper functioning

the mutual use

the Fund and its impact on financial stability and the internal market. 2. Within ten years

the date

entry into force

this Agreement, at the latest, on the basis

an assessment

the experience with its implementation contained in the reports drawn up by the Board in accordance with paragraph 1, the necessary steps shall be taken, in accordance with the TEU and the TFEU, with the aim

incorporating the substance

this Agreement into the legal framework

the Union. Done at Brussels on 21 May 2014, in a single original, whose Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish texts are equally authentic, which shall be deposited in the archives

the Depositary which shall transmit a duly certified copy to each

the Contracting Parties. * # Council Decision

7 June 2007 on the system

the European Communities' own resources (OJ L 163, 23.6.2007, p. 17). Council Regulation (EC, Euratom) No. 1150/2000

22 May 2000 implementing Decision 2007/436/EC, Euratom on the system

the Communities' own resources (OJ L 130, 31.5.2000, p. 1), including any subsequent amendments. PARTICIPATION WITHIN THE SINGLE RESOLUTION FUND AND GRANTING

FINANCIAL SUPPORT UNDER THE SINGLE RESOLTION MECHANISM DECLARATIONS

INTENT BY THE CONTRACTING PARTIES AND OBSERVERS

THE INTERGOVERNMENTAL CONFERENCE THAT ARE MEMBERS

THE COUNCIL

THE EUROPEAN UNION TO BE DEPOSITED WITH THE AGREEMENT: Declaration no. 1: While fully respecting the procedural requirements

the Treaties on which the European Union is founded, t he Contracting Parties and observers

t he intergovernmental Conference that are members

the Council

the European Union note that it is their objective and their intention that, unless they all agree otherwise: (a) Article 4

the SRM Regulation, as on the date

its initial adoption, is not repealed or amended; (b) the principles and rules related to the bail-in tool are not repealed or amended in a way that is not equivalent and does not lead to, at least, the same and not less stringent result than that deriving from the SRM Regulation as on the date

its initial adoption. Declaration no. 2: The signatories to the Intergovernmental Agreement on the transfer and mutualisation

contributions to the Single Resolution Fund declare that they will strive to complete its process

ratification in accordance with their respective national legal requirements in due time so as to permit the Single Resolution Mechanism to be fully operational by 1 January 2016.