Changes from report parliamentary committee draft to plenary report

Added(b) in paragraph 9, the second subparagraph is added:

Added‘By way of derogation from the first subparagraph, Member States shall ensure that where such powers are exercised in respect of eligible deposits and those deposits are not considered unavailable for the purposes of Directive 2014/49/EU, depositors have access to an appropriate daily amount from those deposits.’;

Added(22) Article 35 is amended as follows:

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

Added‘1. Member States shall ensure that resolution authorities may appoint a special manager to replace or to work with the management body of the institution under resolution or the bridge institution. Resolution authorities shall make public the appointment of a special manager. Resolution authorities shall ensure that the special manager has the qualifications, ability and knowledge required to carry out his or her functions.

AddedArticle 91 of Directive 2013/36/EU shall not apply to the appointment of special managers.’;

Added(b) in paragraph 2, the first sentence is replaced by the following:

Added‘The special manager shall have all the powers of the shareholders and the management body of the institution under resolution or the bridge institution.’;

Added(c) paragraph 5 is replaced by the following:

Added‘5. Member States shall require that a special manager draw up reports for the appointing resolution authority on the economic and financial situation of the institution under resolution or the bridge institution and on the acts performed in the conduct of his or her duties, at regular intervals set by the resolution authority and at the beginning and the end of his or her mandate.’;

Added(23) Article 36 is amended as follows:

Added(a) in paragraph 1, the first sentence is replaced by the following:

Added‘1. Before determining whether the conditions for resolution or the conditions for the write down or conversion of relevant capital instruments and eligible liabilities as referred to in Article 59 are met, resolution authorities shall ensure that a fair, prudent and realistic valuation of the assets and liabilities of the institution or entity referred to in Article 1(1), points (b), (c) or (d), is carried out by a person that is independent from any public authority, including the resolution authority, and the institution or entity referred to in Article 1(1), points (b), (c) or (d).’;

Added(b) the following paragraph 7a is inserted:

Added‘7a. Where necessary to inform the decisions referred to in paragraph 4, points (c) and (d), the valuer shall complement the information in paragraph 6, point (c), with an estimate of the value of the off-balance sheet assets and liabilities, including contingent liabilities and assets.’;

Added(24) in Article 37, the following paragraph 11 is added:

Added‘11. EBA shall monitor the actions and preparation of resolution authorities to ensure an effective implementation of the resolution tools and powers in the event of resolution. EBA shall report to the Commission on the state of play of existing practices and possible divergences across Member States by … [PO please insert the date = 2 years after the date of entry into force of this Directive] and monitor the implementation of any recommendation set out in that report, where appropriate.

AddedThe report referred to in the first subparagraph shall cover at least the following:

Added(a) the arrangements in place to implement the bail-in tool and the level of engagement with financial market infrastructures and third-country authorities, where relevant;

Added(b) the arrangements in place to operationalise the use of other resolution tools;

Added(c) the level of transparency towards relevant stakeholders regarding the arrangements referred to in points (a) and (b).’;

Added(25) Article 40 is amended as follows:

Added(a) in paragraph 1, the introductory sentence is replaced by the following:

Added‘In order to give effect to the bridge institution tool and having regard to the need to maintain critical functions in the bridge institution or to pursue any of the resolution objectives, Member States shall ensure that resolution authorities have the power to transfer to a bridge institution all of the following:’;

Added(b) in paragraph 2, the second subparagraph is replaced by the following:

Added‘The application of the bail-in tool for the purpose referred to in Article 43(2), point (b), shall not interfere with the ability of the resolution authority to control the bridge institution. Where the application of the bail-in tool allows for the capital of the bridge institution to be fully provided through the conversion of bail-inable liabilities into shares or other types of capital instruments, the requirement that the bridge institution is wholly or partially owned by one or more public authorities may be waived.’;

Added(26) in Article 42(5), point (b) is replaced by the following:

Added‘(b) such a transfer is necessary to ensure the proper functioning of the institution under resolution, the bridge institution or the asset management vehicle itself; or’;

Added(27) Article 44 is amended as follows:

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

Added‘1. Member States shall ensure that the bail-in tool may be applied to all liabilities, including those giving rise to an accounting provision, of an institution or entity referred to in Article 1(1), points (b), (c) or (d), that are not excluded from the scope of that tool pursuant to paragraphs 2 or 3 of this Article.’;

Added(b) paragraph 5 is replaced by the following:

Added'5. The resolution financing arrangement may make a contribution as referred to in paragraph 4 where all of the following conditions are met:

Added(a) a contribution to loss absorption and recapitalisation equal to an amount not less than 8 % of the total liabilities including own funds of the institution under resolution, measured in accordance with the valuation provided for in Article 36, has been made by the shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other bail-inable liabilities through reduction, write down or conversion pursuant to Article 48(1) and Article 60(1), and by the deposit guarantee scheme pursuant to Article 109 where relevant;

Added(b) the contribution of the resolution financing arrangement does not exceed 5 % of the total liabilities including own funds of the institution under resolution, measured in accordance with the valuation provided for in Article 36.’;

Added▌

Added(28) ▌Article 44a is amended as follows:

Added(a) the following paragraphs are inserted:

Added‘6a. Member States shall ensure that a credit institution issuing eligible instruments qualifying as AT1, Tier 2 instruments or eligible liabilities may sell those instruments to an existing depositor at that credit institution who qualifies as a retail client, as defined in Article 4(1), point (11), of Directive 2014/65/EU, only where the conditions in paragraph 1, points (a), (b) and (c), of this Article are fulfilled and both of the following conditions are met at the time of the purchase:

Added(a) the depositor who qualifies as a retail client does not invest an aggregate amount exceeding 10 % of its financial instrument portfolio in instruments referred to in this paragraph;

Added(b) the initial investment amount invested in one or more instruments referred to in this paragraph is at least EUR 30 000 .

AddedThe credit institution shall ensure that the conditions under points (a) and (b) of this paragraph are met at the time of the purchase, on the basis of the information provided by the retail client in accordance with paragraph 3.

Added6b. Eligible instruments referred to in paragraph 6a sold by the issuing credit institution to its depositors qualifying as retail investors without fulfilling the conditions laid down in that paragraph shall not count towards the requirements under Article 45e or 45f for as long as those instruments are held by the depositor to whom they were sold.

Added6c. Resolution authorities shall, as part of the assessment of resolvability in accordance with Articles 15 and 16, monitor annually on a group and institution specific basis the extent to which MREL eligible instruments are held by retail investors and report the results to EBA at least once per year. ’;

Added(b) the following paragraph is inserted:

Added‘7a. Member States shall not be required to apply paragraphs 6a and 6b of this Article to instruments referred to in paragraph 6a issued before ... [12 months from the date of entry into force of this amending Directive].’;

Added(c) the following paragraph 8 is added:

Added‘8. By … [PO please insert the date = 24 months after the date of entry into force of this Directive], EBA shall report to the Commission on the application of this Article. That report shall compare the measures adopted by the Member States to comply with this Article, analyse their effectiveness in protecting retail investors and assess their impact on cross-border operations.

AddedOn the basis of that report, the Commission may submit a legislative proposal to amend this Directive.’;

Added(29) in Article 45, paragraph 1 is replaced by the following:

Added‘1. Member States shall ensure that institutions and entities referred to in Article 1(1), points (b), (c) and (d), meet, at all times, the requirements for own funds and eligible liabilities where required by and as determined by the resolution authority in accordance with this Article and Articles 45a to 45i.’;

Added(30) Article 45b is amended as follows:

Added(a) in paragraphs 4, 5 and 7, the word ‘G-SIIs’ is replaced by the words ‘G-SII entities’;

Added(b) paragraph 8 is amended as follows:

Added(i) in the first subparagraph, the word ‘G-SIIs’ is replaced by the words ‘G-SII entities’;

Added(ii) in the second subparagraph, point (c), the word ‘G-SII’ is replaced by the words ‘G-SII entity’;

Added(iii) in the fourth subparagraph, the word ‘G-SIIs’ is replaced by the words ‘G-SII entities’;

Added(c) the following paragraph 10 is added:

Added‘10. Resolution authorities may permit resolution entities to comply with the requirements referred to in paragraphs 4, 5 and 7 using own funds or liabilities as referred to in paragraphs 1 and 3 when all of the following conditions are met:

Added(a) for entities that are G-SII entities or resolution entities that are subject to Article 45c(5) or (6), the resolution authority has not reduced the requirement referred to in paragraph 4 of this Article, pursuant to the first subparagraph of that paragraph;