Changes from report parliamentary committee draft to plenary report

Added(45) ‘shareholders’ means shareholders or holders of other instruments of ownership;

Added(46) ‘transfer powers’ means the powers specified in Article 40(1), points (d) or (e), to transfer shares, other instruments of ownership, debt instruments, assets, rights or liabilities, or any combination of those items from an undertaking under resolution to a recipient;

Added(47) CCP a CCP as defined in Article 2, point (1), of Regulation (EU) No 648/2012;

Added(48) ‘write-down or conversion powers’ means the powers referred to in Article 34(2) and in Article 40(1), points (f) to (j);

Added(49) ‘secured liability’ means a liability where the right of the creditor to payment or other form of performance is secured by a charge, pledge or lien, or collateral arrangements including liabilities arising from repurchase transactions and other title transfer collateral arrangements;

Added(50) ‘Tier 1 instruments’ means basic own-fund items that meet the conditions laid down in Article 94(1) of Directive 2009/138/EC;

Added(51) ‘Tier 2 instruments’ means basic and ancillary own-fund items that meet the conditions laid down in Article 94(2) of Directive 2009/38/EC;

Added(52) ‘Tier 3 instruments’ means basic and ancillary own-fund items that meet the conditions laid down in Article 94(3) of Directive 2009/38/EC;

Added(53) ‘eligible liabilities’ means the liabilities and capital instruments that do not qualify as Tier 1, Tier 2 or Tier 3 instruments of an insurance and reinsurance undertaking or entity referred to in Article 1(1), points (b) to (e), and that are not excluded from the scope of the write-down or conversion tool pursuant to Article 34, paragraphs 5 or 6;

Added(54) ‘insurance guarantee scheme’ means a scheme officially recognised by a Member State and financed through contributions from insurance or reinsurance undertakings guaranteeing the payment of eligible insurance claims, in part or in full, to eligible policy holders, insured parties and beneficiaries or ensuring the continuation of insurance policies where an insurance undertaking is unable or likely to become unable to fulfil its obligations and commitments resulting from its insurance contracts;

Added(55) ‘relevant capital instruments’ means Tier 1, Tier 2 and Tier 3 instruments;

Added(56) ‘conversion rate’ means the factor that determines the number of shares or other instruments of ownership into which a liability of a specific class will be converted, by reference either to a single instrument of the class in question or to a specified unit of value of a debt claim;

Added(57) ‘affected creditor’ means a creditor whose claim relates to a liability that is reduced or converted to shares or other instruments of ownership by the exercise of the write-down or conversion power pursuant to the use of the write-down or conversion tool;

Added(58) ‘recipient’ means the entity to which shares, other instruments of ownership, debt instruments, assets, rights or liabilities, or any combination of those items are transferred from an undertaking under resolution;

Added(59) ‘business day’ means a day other than a Saturday, a Sunday or a public holiday in the Member State concerned;

Added(60) ‘termination right’ means a right to terminate a contract, a right to accelerate, close out, set-off or net obligations or any similar provision that suspends, modifies or extinguishes an obligation of a party to the contract or a provision that prevents an obligation under the contract from arising that would otherwise arise;

Added(61) ‘undertaking under resolution’ means any of the entities referred to in Article 1, points (a) to (e), in respect of which a resolution action is taken;

Added(62) ‘Union subsidiary undertaking’ means an insurance or reinsurance undertaking which has its head office in a Member State and which is a subsidiary undertaking of a third-country insurance or reinsurance undertaking or a third-country parent undertaking;

Added(63) ‘ultimate parent undertaking’ means a parent undertaking in a Member State of a group which is subject to group supervision in accordance with Article 213(2), points (a) or (b), of Directive 2009/138/EC, which is not a subsidiary undertaking of another insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company that is authorised and set up in any Member State;

Added(64) ‘third-country insurance or reinsurance undertaking’ means a third-country insurance undertaking or a third-country reinsurance undertaking as defined in Article 13, points (3) and (6), of Directive 2009/138/EC;

Added(65) ‘third-country resolution proceedings’ means an action under the law of a third country to manage the failure of a third-country insurance or reinsurance undertaking or a third-country parent undertaking that is comparable, in terms of objectives and anticipated results, to resolution actions under this Directive;

Added(66) ‘Union branch’ means a branch located in a Member State of a third-country insurance or reinsurance undertaking;

Added(67) ‘relevant third-country authority’ means a third-country authority responsible for carrying out functions comparable to those of resolution authorities or supervisory authorities pursuant to this Directive;

Added(68) ‘title transfer financial collateral arrangement’ means a title transfer financial collateral arrangement as defined in Article 2(1), point (b), of Directive 2002/47/EC of the European Parliament and of the Council;

Added(69) ‘netting arrangement’ means an arrangement under which a number of claims or obligations can be converted into a single net claim, including close-out netting arrangements under which, on the occurrence of an enforcement event (however or wherever defined) the obligations of the parties are accelerated so as to become immediately due or are terminated, and in either case are converted into or replaced by a single net claim, including ‘close-out netting provisions’ as defined in Article 2(1), point (n)(i), of Directive 2002/47/EC and ‘netting’ as defined in Article 2, point (k), of Directive 98/26/EC;

Added(70) ‘set-off arrangement’ means an arrangement under which two or more claims or obligations owed between the undertaking under resolution and a counterparty can be set off against each other;

Added(71) ‘financial contracts’ means financial contracts as defined in Article 1(1), point (100), of Directive 2014/59/EU;

Added(72) ‘crisis prevention measure’ means the exercise of powers to direct the removal of deficiencies or impediments to recoverability under Article 6(5) of this Directive, the exercise of powers to address or remove impediments to resolvability under Article 15 or 16 of this Directive, the application of any measures under Article 137, Article 138, paragraphs 3 and 5, Article 139(3) and Article 140 of Directive 2009/138/EC and the application of a preventive measure under Article 141 of Directive 2009/138/EC;

Added(73) ‘crisis management measure’ means a resolution action, the appointment of a special manager under Article 42 or the appointment of a person under Article 52(1);

Added(74) ‘designated national macroprudential authority’ means the authority entrusted with the conduct of macroprudential policy referred to in Recommendation B1 of the Recommendation of the European Systemic Risk Board of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3);

Added(75) ‘regulated market’ means a regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU of the European Parliament and of the Council.

Added(76) ‘insurance undertaking’ means an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC;

Added(77) ‘reinsurance undertaking’ means reinsurance undertaking as defined in Article 13, point (4), of Directive 2009/138/EC;

Added(78) ‘credit institution’ means a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council;

Added(79) ‘investment firm’ means an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013;

Added(80) ‘low risk profile undertaking’ means a low risk profile undertaking as defined in Article 13, point (10a), of Directive 2009/138/EC;

Added(80a) “low risk profile group” means a low risk profile group as defined in Article 213a(1) of Directive 2009/138/EC;

Added(81) ‘subsidiary undertaking’ means a ‘subsidiary undertaking’ as defined in Article 13, point (16), of Directive 2009/138/EC;

Added(82) ‘parent undertaking’ means a parent undertaking as defined Article 13, point (15), of Directive 2009/138/EC;

Added(83) ‘branch’ means a branch as defined in Article 13, point (11), of Directive 2009/138/EC;

Added(84) ‘administrative, management or supervisory body’ means an administrative, management or supervisory body as defined in Article 1, point (43), of Commission Delegated Regulation (EU) 2015/35.

AddedDesignation of resolution authorities and competent ministries

Added1. Each Member State shall designate one or, exceptionally, more resolution authorities that are empowered to apply the resolution tools and exercise the resolution powers.

Added2. Resolution authorities shall operate independently within national central banks, competent ministries, public administrative authorities or authorities entrusted with public administrative powers. Member States shall refrain from the creation of separate entities.

Added3. ▐Adequate structural arrangements shall be in place to avoid conflicts of interest between the functions entrusted to the resolution authority pursuant to this Directive and all other functions entrusted to the authority within which the resolution authority is established, without prejudice to the exchange of information and cooperation obligations required by paragraph 6.

AddedIn order to achieve the goals referred to in subparagraph 1, arrangements shall be put in place to ensure effective operational independence, including separate staff, reporting lines and decision making processes of the resolution authority from any supervisory or other functions of that resolution authority.

Added4. The requirements laid down in paragraph 3 shall not preclude that:

Added(a) reporting lines converge at the highest level of an organisation that subsumes different functions or authorities;

Added(b) staff may, under predefined conditions, be shared between the other functions entrusted to the resolution authority to meet temporarily high workloads, or for the resolution authority to be able to avail itself of the expertise of shared staff.

Added5. Resolution authorities shall adopt and make public the internal rules they have in place to ensure compliance with the requirements set out in paragraphs 3 and 4, including rules regarding professional secrecy and information exchanges between the different functional areas.

Added6. Member States shall require that the respective sections of the authorities exercising supervision and resolution functions and persons exercising those functions on their behalf cooperate closely in the preparation, planning and application of resolution decisions▐.

Added7. Each Member State shall designate a single ministry which is responsible for exercising the functions entrusted to the competent ministry under this Directive.

Added8. Where the resolution authority in a Member State is not the competent ministry, the resolution authority shall inform the competent ministry of the decisions taken pursuant to this Directive without undue delay and, unless otherwise laid down in national law, not implement any decisions that have a direct fiscal impact without having obtained the approval of that competent ministry.

Added9. A Member State that designates more than one resolution authority shall provide EIOPA with a fully reasoned notification for doing so and shall clearly allocate functions and responsibilities between those authorities, ensure adequate coordination between them and designate a single authority as a contact authority for the purposes of cooperation and coordination with the relevant authorities of other Member States.

Added10. Member States shall inform EIOPA of the national authority or authorities designated as resolution authorities and, where relevant, the contact authority and, where relevant, their specific functions and responsibilities. EIOPA shall publish the list of those resolution authorities and contact authorities.

Added11. Without prejudice to Article 65, Member States may limit the liability of the resolution authority, the supervisory authority and their respective staff in accordance with national law for their acts and omissions in the course of discharging their functions under this Directive.

AddedSimplified obligations for certain undertakings

Added1. Taking into account the impact that the failure of the insurance or reinsurance undertaking could have, due to the nature of its business, its shareholding structure, its legal form, its risk profile, size and legal status, its interconnectedness to other regulated undertakings or to the financial system in general, the scope and the complexity of its activities, and whether its failure and subsequent winding up under normal insolvency proceedings would be likely to have a significant negative effect on financial markets, on other undertakings, on policy holders, on funding conditions, or on the wider economy, supervisory and resolution authorities shall determine whether simplified obligations can apply for certain insurance and reinsurance undertakings and groups with respect to:

Added(a) the contents and details of pre-emptive recovery plans provided for in Articles 5 to 8 and resolution plans provided for in Articles 9 to 12;

Added(b) the date by which the first pre-emptive recovery and resolution plans are to be drawn up and the frequency for updating recovery and resolution plans, which may be lower than the frequency provided for in Article 5(4), Article 7(5), Article 9(5) and Article 11(3);