Changes from report parliamentary committee draft to plenary report

AddedCompetent authorities shall conclude non-binding cooperation arrangements with the relevant third-country authorities referred to in paragraph 2 of this Article where appropriate. Those arrangements shall be in line with EBA framework arrangement and shall ensure that the information disclosed to the third-country authorities is subject to a guarantee that professional secrecy requirements at least equivalent to those referred to in Article 84 are complied with.’

Added(50) in Article 98, paragraph 1 is amended as follows:

Added(a) the introductory sentence is replaced by the following:

Added‘Member States shall ensure that resolution authorities and competent ministries exchange confidential information, including recovery plans, with relevant third-country authorities only if all of the following conditions are met:’;

Added(b) the following second and third subparagraphs are added:

Added‘Member States shall ensure that competent authorities exchange confidential information with relevant third country authorities only if the following conditions are met:

Added(a) in relation to recovery and resolution-related information, the conditions set out in the first subparagraph;

Added(b) in relation to other information available to the competent authorities, the conditions set out in Article 55 of Directive 2013/36/EU.

AddedFor the purposes of the second subparagraph, recovery and resolution-related information shall include all information directly related to the tasks of competent authorities under this Directive, in particular recovery planning and recovery plans, early intervention measures and exchanges with resolution authorities regarding resolution planning, resolution plans and resolution action.’;

Added(51) in Article 101, paragraph 2 is replaced by the following:

Added‘2. Where the resolution authority determines that the use of the resolution financing arrangement for the purposes referred to in paragraph 1 of this Article is likely to result in part of the losses of an institution or an entity as referred to in Article 1(1), points (b), (c) or (d), being passed on to the resolution financing arrangement, the principles governing the use of the resolution financing arrangement set out in Article 44 shall apply.’;

Added(52) in Article 102(3), the first subparagraph is replaced by the following:

Added‘If, after the initial period of time referred to in paragraph 1 of this Article, the available financial means diminish below the target level specified in that paragraph, the regular contributions raised in accordance with Article 103 shall resume until the target level is reached. Resolution authorities may defer the collection of the regular contributions raised in accordance with Article 103 for up to three years where the amount to be collected reaches an amount that is proportionate to the costs of the collection process, provided that such deferral does not materially affect the capacity of the resolution authority to use the resolution financing arrangements pursuant to Article 101. After the target level has been reached for the first time and where the available financial means have subsequently been reduced to less than two thirds of the target level, those contributions shall be set at a level allowing for reaching the target level within four years.’;

Added(53) Article 103 is amended as follows:

Added(a) paragraph 3 is replaced by the following:

Added‘3. The available financial means to be taken into account in order to reach the target level specified in Article 102 may include irrevocable payment commitments which are fully backed by collateral of low risk assets unencumbered by any third party rights, at the free disposal and earmarked for the exclusive use by the resolution authorities for the purposes specified in Article 101(1). The share of irrevocable payment commitments shall not exceed 30 % of the total amount of contributions raised in accordance with this Article. Within that limit, the resolution authority shall determine annually the share of irrevocable payment commitments in the total amount of contributions to be raised in accordance with this Article.’;

Added(b) the following paragraph 3a is inserted:

Added‘3a. The resolution authority shall call the irrevocable payment commitments made pursuant to paragraph 3 of this Article when the use of the resolution financing arrangements is needed pursuant to Article 101.

AddedWhere an entity stops being within the scope of Article 1 and is no longer subject to the obligation to pay contributions in accordance with paragraph 1 of this Article, the resolution authority shall call the irrevocable payment commitments made pursuant to paragraph 3 and still due. If the contribution linked to the irrevocable payment commitment is duly paid at first call, the resolution authority shall cancel the commitment and return the collateral. If the contribution is not duly paid at first call, the resolution authority shall seize the collateral and cancel the commitment.’;

Added(54) In Article 104(1), the second subparagraph is replaced by the following:

Added‘Extraordinary ex-post contributions shall not exceed three times 12,5 % of the target level specified in Article 102.’;

Added(55) Article 108 is amended as follows:

Added(a) paragraph 1 is replaced by the following:

Added‘1. Member States shall ensure that in their national laws governing normal insolvency proceedings:

Added(a) the following have the same priority ranking, which is higher than the ranking provided for the claims of ordinary unsecured creditors:

Added(i) deposits that are excluded from coverage under Article 5 of Directive 2014/49/EU;(ii) that part of eligible deposits of legal entities that are not micro, small and medium-sized enterprises which exceeds the coverage level provided for in Article 6 of Directive 2014/49/EU;

Added(iii) that part of eligible deposits of central and regional governments which exceeds the coverage level provided for in Article 6 of Directive 2014/49/EU;

Added(iv) that part of deposits of legal persons that are not micro, small or medium-sized enterprises that would be eligible deposits were they not made through branches located outside the Union of institutions established within the Union, which exceeds the coverage level provided for in Article 6 of Directive 2014/49/EU;

Added(b) the following have the same priority ranking which is higher than the ranking provided for under point (a):

Added(i) covered deposits;

Added(ii) deposit guarantee schemes for their claim under Article 9(2) of Directive EU/2014/49;

Added(iii) eligible deposits other than those referred to in points (a)(ii) and (iii); and

Added(iv) deposits that would be eligible deposits were they not made through branches located outside the Union of institutions established within the Union, other than those referred to in point (a)(iv).’;

Added(b) the following paragraphs 8 and 9 are added:

Added‘8. Where the resolution tools referred to in Article 37(3), point (a) or (b), are used to transfer only part of the assets, rights or liabilities of the institution under resolution, the resolution financing arrangement shall have a claim against the residual institution or entity referred to in Article 1(1), points (b), (c) or (d), for any expense and loss incurred by the resolution financing arrangement as a result of any contributions made to resolution pursuant to Article 101(1) in connection to losses which creditors would have otherwise borne.

Added9. Member States shall ensure that the claims of the resolution financing arrangement referred to in paragraph 8 of this Article and in Article 37(7) have, in their national laws governing normal insolvency proceedings, a preferred priority ranking, which shall be higher than the ranking provided for the claims of deposits and of deposit guarantee schemes pursuant to paragraph 1 of this Article.’;

Added(56) Article 109 is amended as follows:

Added(a) paragraphs 1 and 2 are replaced by the following:

Added'1. Member States shall ensure that, where the resolution authorities take resolution action with respect to a credit institution, and provided that such action ensures that depositors continue to have access to their deposits, ▌the deposit guarantee scheme to which that credit institution is affiliated shall contribute the following amounts:

Added(a) where the bail-in tool is applied, independently or in combination with the asset separation tool, the amount by which covered deposits would have been written down or converted in order to absorb the losses and recapitalise the institution under resolution pursuant to Article 46(1), had covered deposits been included within the scope of bail-in;

Added(b) where the sale of business or the bridge institution tools are applied, independently or in combination with other resolution tools:

Added(i) the amount necessary to cover the difference between the value of the covered deposits and of the liabilities with the same or a higher priority ranking than deposits and the value of the assets of the institution under resolution which are to be transferred to a recipient; and

Added(ii) where relevant, an amount necessary to ensure the capital neutrality of the recipient following the transfer.

AddedIn the cases referred to in the first subparagraph, point (b), where the transfer to the recipient includes deposits that are not covered deposits or other bail-inable liabilities and the resolution authority assesses that the circumstances referred to in Article 44(3) apply to those deposits or liabilities, the deposit guarantee scheme shall contribute:

Added(a) the amount necessary to cover the difference between the value of deposits, including deposits that are not covered, and of the liabilities with the same or higher priority ranking than deposits and the value of the assets of the institution under resolution which are to be transferred to a recipient; and

Added(b) where relevant, an amount necessary to ensure the capital neutrality of the transfer for the recipient.

AddedMember States shall ensure that, once the deposit guarantee scheme has made a contribution in the cases referred to in the second subparagraph, the institution under resolution refrains from acquiring stakes in other undertakings as well as distributions in connection with Common Equity Tier 1 capital or payments on Additional Tier 1 instruments, or from other activities that may lead to an outflow of funds.

AddedIn all cases, the cost of the contribution of the deposit guarantee scheme shall not be greater than the cost of repaying depositors as calculated by the deposit guarantee scheme under Article 11e of Directive 2014/49/EU.

AddedWhere it is determined by a valuation under Article 74 that the cost of the deposit guarantee scheme’s contribution to resolution was greater than the losses it would have incurred had the institution been wound up under normal insolvency proceedings, the deposit guarantee scheme shall be entitled to the payment of the difference from the resolution financing arrangement in accordance with Article 75.

Added2. Member States shall ensure that the resolution authority determines the amount of the contribution of the deposit guarantee scheme in accordance with paragraph 1 after having consulted the deposit guarantee scheme on the estimated cost of repaying depositors pursuant to Article 11e of Directive 2014/49/EU and in compliance with the conditions referred to in Article 36 of this Directive.

AddedThe resolution authority shall notify its decision as referred to in the first subparagraph to the deposit guarantee scheme to which the institution is affiliated. The deposit guarantee scheme shall implement that decision without delay.’;

Added(b) the following paragraphs 2a and 2b are inserted:

Added‘2a. Where the funds of the deposit guarantee scheme are used in accordance with paragraph 1, first subparagraph, point (a), to contribute to the recapitalisation of the institution under resolution, Member States shall ensure that the deposit guarantee scheme transfers its holdings of shares or other capital instruments in the institution under resolution to the private sector as soon as commercial and financial circumstances allow.

AddedMember States shall ensure that the deposit guarantee scheme markets the shares and other capital instruments referred to in the first subparagraph openly and transparently, and that the sale does not misrepresent them or discriminate between potential purchasers. Any such sale shall be made on commercial terms.

Added2b. The contribution of the deposit guarantee scheme pursuant to paragraph 1, second subparagraph, shall count towards the thresholds laid down in Article 44(5), point (a), and in Article 44(8), point (a).

AddedWhere the use of the deposit guarantee scheme pursuant to paragraph 1, second subparagraph, together with the contribution to loss absorption and recapitalisation made by the shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other bail-inable liabilities, allows for the use of the resolution financing arrangement, the contribution of the deposit guarantee scheme shall be limited to the amount necessary to meet the thresholds laid down in Article 44(5), point (a), and in Article 44(8), point (a). Following the contribution of the deposit guarantee scheme, the resolution financing arrangement shall be used in accordance with the principles governing the use of the resolution financing arrangement set out in Articles 44 and 101.

AddedBy way of derogation from the limitation on contributions from the deposit guarantee scheme under the second subparagraph of this paragraph, where the conditions under Article 44(7) are fulfilled, an additional contribution of the deposit guarantee scheme shall be required. That additional contribution shall be equal to the amount contributed by the resolution financing arrangement above the 5% limit specified in Article 44(5), point (b), multiplied by the share of covered deposits as part of the total liabilities in the scope of the transfer.

AddedHowever, the first and the second subparagraphs shall not apply to institutions that meet at least one of the following conditions:

Added(i) the institution has been identified as a liquidation entity in the group resolution plan or in the resolution plan.’;

Added(ii) the institution has breached its intermediate or final MREL target, as appropriate, in four quarters within four years ending 6 months prior to the determination of failing or likely to fail pursuant to Article 32(1), point (a). The four-year-period does not take into account the two consecutive quarters immediately preceding such determination of failing or likely to fail.