Changes from report parliamentary committee draft to plenary report

Added(b) the entity infringes or is likely to infringe in the 12 months following the assessment of the ECB the requirements laid down in Title II of Directive 2014/65/EU, in Articles 3 to 7, 14 to 17, or 24, 25 and 26 of Regulation (EU) No 600/2014, or in Articles 12f or 12g of this Regulation.

AddedWhere there is a significant deterioration of conditions, or adverse circumstances arise or new information is obtained about an entity, the ECB may determine that the condition referred to in the first subparagraph, point (a)(ii), is met without having previously taken other remedial actions, including the exercise of the powers referred to in Article 104 of Directive 2013/36/EU or in Article 16(2) of Regulation (EU) No 1024/2013.

AddedFor the purposes of the first subparagraph, point (b), the ECB, or, as appropriate, the competent authority under Directive 2014/65/EU, or the Board shall inform the national competent authority without delay of the infringement or likely infringement.

Added2. For the purposes of paragraph 1, early intervention measures shall include the following:

Added(a) the requirement for the management body of the entity to do either of the following:

Added(i) to implement one or more of the arrangements or measures set out in the recovery plan;

Added(ii) to update the recovery plan in accordance with Article 5(2) of Directive 2014/59/EU where the circumstances that led to the early intervention are different from the assumptions set out in the initial recovery plan and to implement one or more of the arrangements or measures set out in the updated recovery plan within a specific timeframe;

Added(b) the requirement for the management body of the entity to convene or, if the management body fails to comply with that requirement, convene directly, a meeting of shareholders of the entity, and in both cases set the agenda and require certain decisions to be considered for adoption by the shareholders;

Added(c) the requirement for the management body of the entity to draw up an action plan, in accordance with the recovery plan where applicable, for negotiation on restructuring of debt with some or all of its creditors;

Added(d) the requirement to change the legal structure of the institution;

Added(e) the requirement to remove or replace the senior management or management body of the entity in its entirety or with regard to individuals, in accordance with Article 13a;

Added(f) the appointment of one or more temporary administrators to the entity, in accordance with Article 13b;

Added(fa) the requirement for the management body of the entity to draw up a plan that the entity can implement where the relevant corporate body decides to initiate the voluntary winding down of the entity.

Added3. The ECB shall choose the appropriate and timely early intervention measures based on what is proportionate to the objectives pursued, having regard to the seriousness of the infringement or likely infringement and the speed of the deterioration in the financial situation of the entity, among other relevant information.

Added4. For each of the measures referred to in paragraph 2, the ECB shall set a deadline that is appropriate for completion of that measure and that enables the ECB to evaluate its effectiveness.

AddedThe evaluation of the measure shall be carried out immediately after the deadline is reached and shared with the Board and relevant national resolution authorities. Where the evaluation concludes that the measures have not been fully implemented or are not effective, the ECB or the relevant national competent authority shall make an assessment of the condition referred to in Article 18(1), point (a), after having consulted the Board and the relevant national resolution authority.

Added5. Where a group includes entities established in participating Member States as well as in non-participating Member States, the ECB shall represent the national competent authorities of the participating Member States for the purposes of consultation and cooperation with non-participating Member States in accordance with Article 30 of Directive 2014/59/EU.

AddedWhere a group includes entities established in participating Member States and subsidiaries established, or significant branches located, in non-participating Member States, the ECB shall communicate any decisions or measures referred to in Articles 13 to 13c relevant to the group to the competent authorities or the resolution authorities of the non-participating Member States, as appropriate, in a timely manner.’;

Added(16) the following Articles 13a, 13b and 13c are inserted:

Added‘Article 13a

AddedReplacement of the senior management or management body

AddedFor the purposes of Article 13(2), point (e), the new senior management or management body, or individual members of those bodies, shall be appointed in accordance with Union and national law and be subject to the approval of the ECB.

AddedTemporary administrator

Added1. For the purposes of Article 13(2), point (f), the ECB may, based on what is proportionate in the circumstances, appoint any temporary administrator to do either of the following:

Added(a) temporarily replace the management body of the entity;

Added(b) work temporarily with the management body of the entity.

AddedThe ECB shall specify its choice under points (a) or (b) at the time of appointment of the temporary administrator.

AddedFor the purposes of the first subparagraph, point (b), the ECB shall further specify at the time of the appointment of the temporary administrator the role, duties and powers of that temporary administrator and any requirements for the management body of the entity to consult or to obtain the consent of the temporary administrator prior to taking specific decisions or actions.

AddedThe ECB shall make public the appointment of any temporary administrator, except where the temporary administrator does not have the power to represent or make decisions on behalf of the entity.

AddedAny temporary administrator shall fulfil the requirements set out in Article 91(1), (2) and (8) of Directive 2013/36/EU. The assessment by the ECB of whether the temporary administrator complies with those requirements shall be an integral part of the decision to appoint that temporary administrator.

Added2. The ECB shall specify the powers of the temporary administrator at the time of his or her appointment, based on what is proportionate in the circumstances. Such powers may include some or all of the powers of the management body of the entity, under the statutes of the entity and under national law, including the power to exercise some or all of the administrative functions of the management body of the entity. The powers of the temporary administrator in relation to the entity shall comply with the applicable company law. Such powers may be adjusted in the event of a change in circumstances by the ECB.

Added3. The ECB shall specify the role and functions of the temporary administrator at the time of appointment. Such role and functions may include all of the following:

Added(a) ascertaining the financial position of the entity;

Added(b) managing the business or part of the business of the entity to preserve or restore its financial position;

Added(c) taking measures to restore the sound and prudent management of the business of the entity.

AddedThe ECB shall specify any limits on the role and functions of the temporary administrator at the time of his or her appointment.

Added4. The ECB shall have the exclusive power to appoint and remove any temporary administrator. The ECB may remove a temporary administrator at any time and for any reason. The ECB may vary the terms of appointment of a temporary administrator at any time subject to this Article.

Added5. The ECB may require that certain acts of a temporary administrator be subject to the prior consent of the ECB. The ECB shall specify any such requirements at the time of appointment of the temporary administrator or at the time of any variation of the terms of appointment of the temporary administrator.

AddedIn any case, the temporary administrator may exercise the power to convene a general meeting of the shareholders of the entity and to set the agenda of such a meeting only with the prior consent of the ECB.

Added6. At the request of the ECB, the temporary administrator shall draw up reports on the financial position of the entity and on the acts performed in the course of his or her appointment, at intervals set by the ECB, at least once, after the first six months have elapsed, and in any case at the end of his or her mandate.

Added7. The temporary administrator shall be appointed for maximum 1 year. That period may be exceptionally renewed once if the conditions for appointing the temporary administrator continue to be met. The ECB shall determine those conditions and shall justify any renewal of the appointment of the temporary administrator to the shareholders.

Added8. Subject to this Article, the appointment of a temporary administrator shall not prejudice the rights of the shareholders laid down in Union or national company law.

Added9. A temporary administrator appointed pursuant to paragraphs 1 to 8 of this Article shall not be deemed to be a shadow director or a de facto director under national law.

AddedPreparation for resolution

Added1. For the entities and groups referred to in Article 7(2), and the entities and groups referred to in Article 7(4), point (b), and Article 7(5) where the conditions for the application of those provisions are met, the ECB or national competent authorities shall notify the Board without delay of any of the following:

Added(a) any of the measures referred to in Article 16(2) of Regulation (EU) No 1024/2013 or Article 104(1) of Directive 2013/36/EU they require an entity or group to take that aim to address a deterioration in the situation of that entity or group;

Added(b) where supervisory activity shows that the conditions laid down in Article 13(1) of this Regulation or Article 27(1) of Directive 2014/59/EU are met in relation to an entity or group, the assessment that those conditions are met, irrespective of any early intervention measure;

Added(c) the application of any of the early intervention measures referred to in Article 13 of this Regulation or Article 27 of Directive 2014/59/EU.

AddedThe Board shall notify the Commission of notification it has received pursuant to the first subparagraph.

AddedThe ECB or the relevant national competent authority shall closely monitor, in close cooperation with the Board, the situation of the entities and groups referred to in the first subparagraph and their compliance with the measures referred to in the first subparagraph, point (a), that aim to address a deterioration in the situation of those entities and groups and with the early intervention measures referred to in the first subparagraph, point (c).

Added2. The ECB or the relevant national competent authority shall notify the Board as early as possible where they consider that there is a material risk that one or more of the circumstances referred to in Article 18(4) would apply in relation to an entity as referred to in Article 7(2), or an entity as referred to in Article 7(4), point (b), and Article 7(5) where the conditions for the application of those provisions are met. That notification shall contain:

Added(a) the reasons for the notification;

Added(b) an overview of the measures which would prevent the failure of the entity within a reasonable timeframe, their expected impact on the entity as regards the circumstances referred to in Article 18(4) and the expected timeframe for the implementation of those measures.

AddedAfter having received the notification referred to in the first subparagraph, the Board shall assess, in close cooperation with the ECB or the relevant national competent authority, what constitutes a reasonable timeframe for the purposes of the assessment of the condition referred to in Article 18(1), point (b), taking into account the speed of the deterioration of the conditions of the entity, the potential impact on the financial system, on the protection of depositors and on the preservation of client funds, the risk that a prolonged process increases the overall costs for customers and the economy, the need to implement effectively the resolution strategy and any other relevant considerations. The Board shall communicate that assessment to the ECB or to the relevant national competent authority as early as possible.

AddedFollowing the notification referred to in the first subparagraph, the ECB or the relevant national competent authority and the Board shall, in close cooperation with the Board, monitor the situation of the entity, the implementation of the any relevant measures within their expected timeframe and any other relevant developments. For that purpose, the Board and the ECB or the relevant national competent authority shall meet regularly, with a frequency set by the Board considering the circumstances of the case. The ECB or the relevant national competent authority and the Board shall provide each other with any relevant information without delay.

AddedThe Board shall notify the Commission of any information it has received pursuant to the first subparagraph.

Added3. The ECB or the relevant national competent authority shall provide the Board with all the information requested by the Board that is necessary for all of the following:

Added(a) updating the resolution plan and preparing for the possible resolution of an entity as referred to in Article 7(2), or an entity as referred to in Article 7(4), point (b), and Article 7(5) where the conditions for the application of those provisions are met;

Added(b) carrying out the valuation referred to in Article 20(1) to (15).

AddedWhere such information is not already available to the ECB or the national competent authorities, the Board and the ECB and such national competent authorities shall cooperate and coordinate to obtain that information. For that purpose, the ECB and the national competent authorities shall have the power to require the entity to provide such information, including through on-site inspections, and to provide that information to the Board.