Changes from report parliamentary committee draft to plenary report

Added(b) the liabilities referred to in paragraph 1 of this Article that do not meet the condition referred to in Article 72b(2), point (d), of Regulation (EU) No 575/2013 comply with the conditions set out in Article 72b(4), points (b) to (e), of that Regulation.’;

Added(31) Article 45c is amended as follows:

Added(a) in paragraph 3, eighth subparagraph, the words ‘critical economic functions’ are replaced by the words ‘critical functions’;

Added(b) paragraph 4 is replaced by the following:

Added‘4. EBA shall develop draft regulatory technical standards specifying the methodology to be used by resolution authorities to estimate the requirement referred to in Article 104a of Directive 2013/36/EU and the combined buffer requirement for:

Added(a) resolution entities at the resolution group consolidated level, where the resolution group is not subject to those requirements under Directive 2013/36/EU;

Added(b) entities that are not themselves resolution entities, where the entity is not subject to those requirements under Directive 2013/36/EU on the same basis as the requirements referred to in Article 45f of this Directive.

AddedEBA shall submit those draft regulatory technical standards to the Commission by … [OP please insert the date = 12 months from the date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Added(c) in paragraph 7, eighth subparagraph, the words ‘critical economic functions’ are replaced by the words ‘critical functions’;

Added(32) the following Article 45ca is inserted:

Added‘Article 45ca

AddedDetermination of the minimum requirement for own funds and eligible liabilities for transfer strategies▌

Added1. When applying Article 45c to a resolution entity whose preferred resolution strategy envisages, independently or in combination with other resolution tools, ▌ the use of the sale of business tool or the bridge institution tool▌, the resolution authority shall set the recapitalisation amount provided in Article 45c(3) in a proportionate way on the basis of the following criteria, as relevant:

Added(a) the ▌size, business model, funding model and risk profile of the resolution entity or, as relevant, the size of the part of the resolution entity that is subject to the sale of business tool or bridge institution tool;

Added(b) the shares, other instruments of ownership, assets, rights or liabilities to be transferred to a recipient as identified in the resolution plan, taking into consideration:

Added(i) the core business lines and critical functions of the resolution entity;

Added(ii) the liabilities excluded from bail-in pursuant to Article 44(2);

Added(iii) the safeguards referred to in Articles 73 to 80;

Added(iiia) the expected own funds requirements for any bridge institution that might be needed to implement the market exit of the resolution entity, to ensure compliance by the bridge institution with Regulation (EU) No 575/2013, Directive 2013/36/EU and Directive 2014/65/EU, as applicable;

Added(iiib) the expected demand by the recipient for the transaction to be capital neutral with regard to the requirements applicable to the acquiring entity;

Added(c) the expected value and marketability of the shares, other instruments of ownership, assets, rights or liabilities of the resolution entity referred to in point (b), taking into account:

Added(i) any material impediments to resolvability, identified by the resolution authority, that are ▌related to the application of the sale of business tool or the bridge institution tool;

Added(ii) the losses resulting from the assets, rights or liabilities left in the residual institution;

Added(iia) a potentially adverse market environment at the time of resolution;

Added(d) whether the preferred resolution strategy envisages the transfer of shares or other instruments of ownership issued by the resolution entity, or of all or part of the assets, rights and liabilities of the resolution entity;

Added(e) whether the preferred resolution strategy envisages the application of the asset separation tool.

Added▌

Added3. The application of paragraph 1 shall not result in an amount that is higher than the amount resulting from application of Article 45c(3) or in an amount that is lower than 13,5% of the total risk exposure amount, calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013, and lower than 5% of the total exposure measure of the relevant entity referred to in paragraph 1 of this Article, calculated in accordance with Articles 429 and 429a of Regulation (EU) No 575/2013.’;

Added(33) in Article 45d(1), the introductory wording is replaced by the following:

Added‘The requirement referred to in Article 45(1) for a resolution entity that is a G-SII entity shall consist of the following:’;

Added(34) in Article 45f(1), the third subparagraph is replaced by the following:

Added‘By way of derogation from the first and second subparagraphs of this paragraph, Union parent undertakings that are not themselves resolution entities, but are subsidiaries of third-country entities, shall comply with the requirements laid down in Articles 45c and 45d on a consolidated basis.’;

Added(35) Article 45l is amended as follows:

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

Added‘(a) how the requirement for own funds and eligible liabilities set in accordance with Article 45e or Article 45f has been implemented at national level, including Article 45ca, and in particular whether there have been divergences in the levels set for comparable entities across Member States;’

Added(b) in paragraph 3, second subparagraph, the following sentence is added:

Added‘The obligation referred to in paragraph 2 shall cease to apply after the second report is submitted.’;

Added(35a) in Article 45m, the following paragraph is inserted:

Added‘1a. By way of derogation from Article 45(1), resolution authorities shall determine appropriate transitional periods for institutions or entities referred to in Article 1(1), points (b), (c) and (d), to comply with the requirements in Articles 45e or 45f or with the requirements in Article 45b(4), (5) or (7), if institutions or entities are subject to those requirements as a result of the entry into force of ... [this amending Directive]. The deadline for institutions and entities to comply with the requirements in Articles 45e or 45f or the requirements that result from the application of Article 45b(4), (5) or (7) shall be .... [four years from the date of application of this amending Directive].

AddedThe resolution authority shall determine intermediate target levels for the requirements in Articles 45e or 45f or for the requirements that result from the application of Article 45b(4), (5) or (7), as appropriate, that institutions or entities referred to in the first subparagraph of this paragraph shall comply with by ... [two years from the date of application of this amending Directive]. The intermediate target levels, as a rule, shall ensure a linear build-up of own funds and eligible liabilities towards the requirement.

AddedThe resolution authority may set a transitional period that ends after ... [four years from the date of application of this amending Directive] where duly justified and appropriate on the basis of the criteria referred to in paragraph 7, taking into consideration:

Added(a) the development of the entity’s financial situation;

Added(b) the prospect that the entity will be able to ensure compliance in a reasonable timeframe with the requirements in Article 45e or 45f or with a requirement that results from the application of Article 45b(4), (5) or (7); and

Added(c) whether the entity is able to replace liabilities that no longer meet the eligibility or maturity criteria and if not, whether that inability is of an idiosyncratic nature or is due to market-wide disturbance.’;

Added(36) in Article 45m, paragraph 4 is replaced by the following:

Added‘4. The requirements referred to in Article 45b(4) and (7) and in Article 45c(5) and (6), as applicable, shall not apply within the three-year period following the date on which the resolution entity or the group of which the resolution entity is part has been identified as a G-SII or a non-EU G-SII, or the resolution entity starts to be in the situation referred to in Article 45c(5) or (6).’;

Added(37) in Article 46(2), the first subparagraph is replaced by the following:

Added‘The assessment referred to in paragraph 1 of this Article shall establish the amount by which bail-inable liabilities need to be written down or converted:

Added(a) to restore the Common Equity Tier 1 capital ratio of the institution under resolution or where applicable establish the ratio of the bridge institution taking into account any contribution of capital by the resolution financing arrangement made pursuant to Article 101(1), point (d), of this Directive;

Added(b) to sustain sufficient market confidence in the institution under resolution or the bridge institution, taking into account any contingent liabilities, and enable the institution under resolution to continue to meet, for at least 1 year, the conditions for authorisation and to continue to carry out the activities for which it is authorised under Directive 2013/36/EU or Directive 2014/65/EU.’;

Added(38) in Article 47(1), point (b)(i) is replaced by the following:

Added‘(i) relevant capital instruments and eligible liabilities in accordance with Article 59 issued by the institution pursuant to the power referred to in Article 59(2); or’;

Added(39) Article 52 is amended as follows:

Added(a) in paragraph 1, the following subparagraph is added:

Added‘In exceptional circumstances, the resolution authority may extend the 1 month deadline for submission of the business reorganisation plan by another month.’;

Added(b) in paragraph 5, the following subparagraph is added:

Added‘The resolution authority may require the institution or entity referred to in Article 1(1), points (b), (c) or (d), to include additional elements in the business reorganisation plan.’;

Added(40) in Article 53, paragraph 3 is replaced by the following:

Added‘3. Where a resolution authority reduces to zero the principal amount of, or outstanding amount payable in respect of, a liability, including a liability giving rise to an accounting provision, by means of the power referred to in Article 63(1), point (e), that liability and any obligations or claims arising in relation to it that are not accrued at the time when the power is exercised, shall be treated as discharged for all purposes, and shall not be provable in any subsequent proceedings in relation to the institution under resolution or any successor entity in any subsequent winding up.’;