BETA

Activities of Syed KAMALL related to 2016/0362(COD)

Shadow reports (1)

2016/11/22
Committee: ECON
Dossiers: 2016/0362(COD)
Documents: PDF(841 KB) DOC(106 KB)

Amendments (76)

Proposal for a directive
Recital 7

(7) Eligibility criteria for ~~bail-inable liabilities for~~ the MREL should be closely aligned with those laid down in Regulation (EU) No 575/2013 for the TLAC minimum requirement, in line with the complementary adjustments and requirements introduced in this Directive. In particular, certain debt instruments with an embedded derivative component, such as certain structured notes, should be eligible to meet the MREL to the extent that they have a fixed principal amount repayable at maturity while only an additional return is linked to a derivative and depends on the performance of a reference asset. In view of their fixed principal amount, those instruments should be highly loss-absorbing and easily bail-inable in resolution.

2018/01/29
Committee: ECON

Proposal for a directive
Recital 8

(8) The scope of liabilities to meet the MREL includes, in principle, all liabilities resulting from claims arising from unsecured non-preferred creditors (non- subordinated liabilities) unless they do not meet specific eligibility criteria provided in this Directive. To enhance the resolvability of institutions through an effective use of the bail-in tool, resolution authorities should be able to require that the MREL is met with subordinated liabilities, in particular when there are clear indications that bailed-in creditors are likely to bear losses in resolution that would exceed their potential losses in insolvency. The requirement to meet MREL with subordinated liabilities should be requested only for a level necessary to prevent that losses of creditors in resolution are above losses that they would otherwise incur under insolvency. Any subordination of debt instruments requested by resolution authorities for the MREL should be without prejudice to the possibility to partly meet the TLAC minimum requirement with non-subordinated debt instruments in accordance with Regulation (EU) No 575/2013 as permitted by the TLAC standard.;

2018/01/29
Committee: ECON

Proposal for a directive
Recital 9

(9) The MREL should allow institutions to absorb losses expected due to write-down or conversion at the point of non-viability or in resolution and recapitalise the institution post-resolution. The resolution authorities should, on the basis of the resolution strategy chosen by them, duly justify the imposed level of the MREL in particular as regards the need and the level of the requirement referred to in Article 104a of Directive 2013/36/EU in the recapitalisation amount. As such, that level should be composed of the sum of the amount of losses expected due to the write- down and/or conversion at the point of non-viability or in resolution that correspond to the institution's own funds requirements and the recapitalisation amount that allows the institution post- resolution both to meet its own funds requirements necessary for being authorised to pursue its activities under the chosen resolution strategy, and to sustain sufficient market confidence to carry out the activities for which it is authorised. The MREL should be expressed as a percentage of the total risk exposure and leverage ratio measures, and institutions should meet simultaneously the levels resulting from the two measurements. The resolution authority should be able to adjust the recapitalisation amounts in cases duly justified to adequately reflect also increased risks that affect resolvability arising from the resolution group’s business model, funding profile and overall risk profile and therefore in such limited circumstances require that the recapitalisation amounts referred to in the first subparagraph of Article 45c(3) and (4) are exceeded.

2018/01/29
Committee: ECON

Proposal for a directive
Recital 10

(10) To enhance their resolvability, resolution authorities should be able to impose an institution-specific MREL on G- SIIs in addition to the TLAC minimum requirement laid down in Regulation (EU) No 575/2013. That institution-specific MREL ~~may only~~should be imposed where the TLAC minimum requirement is not sufficient to absorb losses and recapitalise a G-SII under the chosen resolution strategy.

2018/01/29
Committee: ECON

Proposal for a directive
Recital 12

(12) Similarly to powers conferred to competent authorities by Directive 2013/36/EU, this Directive should allow resolution authorities to require institutions to meet higher levels of MREL while addressing in a more flexible manner any breaches of those levels, in particular by alleviating the automatic effects of those breaches in the form of limitations to the Maximum Distributable Amounts (MDAs). Resolution authorities should be able to give guidance to institutions to meet additional amounts to cover losses in resolution that are above the level of the own funds requirements as laid down in Regulation (EU) No 575/2013 and Directive 2013/36/EU, and/or to ensure sufficient market confidence in the institution post-resolution. To ensure consistency with Directive 2013/36/EU, guidance to cover additional losses may only be given where the 'capital guidance' has been requested by the competent supervisory authorities in accordance with Directive 2013/36/EU and should not exceed the level requested in that guidance. For the recapitalisation amount, the level requested in the guidance to ensure market confidence should enable the institution to continue to meet the conditions for authorisation for an appropriate period of time, including by allowing the institution to cover the costs related to the restructuring of its activities following resolution. The market confidence buffer should not exceed the combined capital buffer requirement under Directive 2013/36/EU unless a higher level is necessary to ensure that, following the event of resolution, the entity continues to meet the conditions for its authorisation for an appropriate period of time. Where an entity consistently fails to have additional own funds and eligible liabilities as expected under the guidance, the resolution authority should be able to require that the amount of the MREL be increased to cover the amount of the guidance. For the purposes of considering whether there is a consistent failure, the resolution authority should take into account the entity's reporting on the MREL as required by this Directive.deleted

2018/01/29
Committee: ECON

Proposal for a directive
Recital 18

(18) The requirement to include a contractual recognition of the effects of the bail-in tool in agreements or instruments creating liabilities governed by the laws of third countries should ensure that those liabilities can be bailed in in the event of resolution. Unless and until statutory recognition frameworks to enable effective cross-border resolution are adopted in all third country jurisdictions, contractual arrangements, when properly drafted and widely adopted, should offer a workable solution. Even with statutory recognition frameworks in place, contractual recognition arrangements should help to reinforce the legal certainty and predictability of cross-border recognition of resolution actions. There might be instances, however, where it is impracticable for institutions to include those contractual terms in agreements or instruments creating certain liabilities~~, in particular liabilities that are not excluded from the bail-in tool under Directive 2014/59/EU, covered deposits or own funds instruments. It is in particular impracticable for~~. For example, institutions may, in particular, find it impracticable to include the contractual recognition language in liabilities where relevant third country authorities have informed the institution in writing they will not allow it to include contractual recognition language in agreements or instruments creating liabilities governed by the law of that third country; where it is illegal in the third country for the institutions to include contractual recognition language in agreements or instruments creating liabilities ~~contractual terms on~~governed by the laws of that third country; where the cre~~cogni~~ation of ~~the effects of the bail-in tool, wh~~liabilities is governed by international protocols which the institution has in practice no powere t~~hos~~o amend; where contractual terms are ~~unlawful in the third countries concerned or where institutions do not have the bargaining pow~~imposed on the institution by virtue of its membership and participation terms of non-EU bodies, whose use is on standard terms for all members and impractical to amend bilaterally; or where t~~o impose~~he liability which would be subject to those contractual ~~terms. Resolution authorities should therefore be able to waive the application of the requirement~~recognition requirement is contingent on a breach of the contract. Institutions should be able to determine that it is legally or otherwise impracticable to include those contractual terms where those contractual terms would entail disproportionate costs for institutions and the resulting liabilities would not provide significant loss absorbing and recapitalisation capacity in resolution. This waiver should however not be relied upon where a number of agreein liabilities which otherwise fall within the scope of the contractual recognition requirement and that the failure to include the relevant terms does not impede the resolvability of the firm. The competent authority or resolution authority may assess an institution's determination that insertion of this contractual term is impracticable, and require inclusion of the contractual terms if it disagrees with the assessments or ~~liabilities toge~~considers the failure to include ther co~~llectively provide significant loss absorbing and recapitalisation capacity in resolution~~ntractual term adversely affects the resolvability of the firm. In addition, to ensure that the resolvability of institutions is not affected, liabilities ~~benefitting from waiver~~which fail to include the contractual recognition provisions should not be eligible for MREL.

2018/01/29
Committee: ECON

Proposal for a directive
Recital 19

(19) In order to preserve financial stability, it is important that competent authorities are able to remedy the deterioration of an institution’s financial and economic situation before that institution reaches a point at which authorities have no other alternative than to resolve it. To that end, competent authorities should be granted appropriate early intervention powers. Early intervention powers should include the power to suspend, for the minimum time necessary, certain contractual obligations. That power to suspend should be framed accurately and should be exercised only where that is necessary to establish whether early intervention measures are needed or to determine whether the institution is failing or likely to fail. That power to suspend should however not apply to obligations in relation to the participation in systems designated under Directive 98/26/EC of the European Parliament and of the Council18 , central counterparties (CCPs) and central banks including third country CCPs recognised by the European Capital Markets Authority ('ESMA'). It should also not apply to covered deposits. Early intervention powers should comprise the powers already provided for in Directive 2013/36/EU for circumstances other than those considered to be early intervention as well as for situations in which it is considered to be necessary to restore the financial soundness of an institution. __________________ 18 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998, p. 45).deleted

2018/01/29
Committee: ECON

Proposal for a directive
Recital 19

(19) In order to preserve financial stability, ~~it is important that competent~~Member States should be able to ensure that resolution authorities are able to remedy the deterioration of an institution’s financial and economic situation after determination that the institution is failing or likely to fail and before that institution reaches a point at which authorities have no other alternative than to resolve it. To that end, ~~competent~~resolution authorities should be ~~granted appropriate early intervention powers. Early intervention powers should include th~~able to have available to them appropriate powers to suspend, for ~~the minimum time necessary~~a maximum of two working days in total, certain contractual obligations. That power to suspend should be framed accurately and should be exercised only where that is necessary ~~to establish whether early intervention measures are needed or to determine whether the institution is failing or likely to fail~~for determination of point (b) of Article 32(1). That power to suspend should however not apply to obligations in relation to the participation in systems designated under Directive 98/26/EC of the European Parliament and of the Council18 , central counterparties (CCPs) and central banks including third country CCPs recognised by the European Capital Markets Authority ('ESMA'). It should also not apply to covered deposits~~. Early intervention powers should comprise the powers already provided for~~ and financial contracts as defined in Directive 201~~3/36/EU for circumstances other than those considered to be early intervention as well as for situations in which it is considered to be necessary to restore the financial soundness of an institution~~4/59/EU. __________________ 18 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998, p. 45).

2018/01/29
Committee: ECON

Proposal for a directive
Recital 20

(20) It is in the interest of an efficient resolution, and in particular in the interest of avoiding conflicts of jurisdiction, that no normal insolvency proceedings for the failing institution be opened or continued while the resolution authority is exercising its resolution powers or applying the resolution tools, except at the initiative of, or with the consent of, the resolution authority. It is useful and necessary to suspend, for a limited period, certain contractual obligations so that the resolution authority has sufficient time to carry out the valuation and put into practice the resolution tools. That power should be accurately framed and should be exercised only for the minimum time necessary for the valuation or to put resolution tools into practice. That power should however not apply to covered deposits or to obligations in relation to the participation in systems designated under Directive 98/26/EC, CCPs and central banks, including third country CCPs recognised by ESMA. Directive 98/26/EC reduces the risk associated with participation in payment and securities settlement systems, in particular by reducing disruption in the event of the insolvency of a participant in such a system. To ensure that those protections apply appropriately in crisis situations, whilst maintaining appropriate certainty for operators of payment and securities systems and other market participants, Directive 2014/59/EU should be amended to provide that a crisis prevention measure or a crisis management measure should not as such be deemed to be insolvency proceedings within the meaning of Directive 98/26/EC, provided that the substantive obligations under the contract continue to be performed. However, nothing in Directive 2014/59/EU should prejudice the operation of a system designated under Directive 98/26/EC or the right to collateral security guaranteed by that same Directive.deleted

2018/01/29
Committee: ECON

Proposal for a directive
Recital 20

(20) It is in the interest of an efficient resolution, and in particular in the interest of avoiding conflicts of jurisdiction, that no normal insolvency proceedings for the failing institution be opened or continued while the resolution authority is exercising its resolution powers or applying the resolution tools, except at the initiative of, or with the consent of, the resolution authority. It ismay be useful ~~and necessary~~ to suspend, for a ~~limited period~~maximum of two working days in total, certain contractual obligations so that the resolution authority has sufficient time to carry out the valuation and put into practice the resolution tools. That power should be accurately framed and should be exercised only for the minimum time necessary for the valuation or to put resolution tools into practice. That power should however not apply to covered deposits and financial contracts as defined in Directive 2014/59/EU or to obligations in relation to the participation in systems designated under Directive 98/26/EC, CCPs and central banks, including third country CCPs recognised by ESMA. Directive 98/26/EC reduces the risk associated with participation in payment and securities settlement systems, in particular by reducing disruption in the event of the insolvency of a participant in such a system. To ensure that those protections apply appropriately in crisis situations, whilst maintaining appropriate certainty for operators of payment and securities systems and other market participants, Directive 2014/59/EU should be amended to provide that a crisis prevention measure or a crisis management measure should not as such be deemed to be insolvency proceedings within the meaning of Directive 98/26/EC, provided that the substantive obligations under the contract continue to be performed. However, nothing in Directive 2014/59/EU should prejudice the operation of a system designated under Directive 98/26/EC or the right to collateral security guaranteed by that same Directive.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 4 a (new)

Directive 2014/59/EU
Article 2 – paragraph 1 – point 110 a (new)

4a. In Article 2(1), the following point is added: (110 a)‘home resolution authority’ means the group-level resolution authority or the third country resolution authority responsible for implementing the global resolution strategy;

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 4 b (new)

Directive 2014/59/EU
Article 2 – paragraph 1 – point 110 b (new)

4b. In Article 2(1), the following point is added: (110 b)‘global resolution strategy’ means the strategy designated in the global resolution plan;

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 4 c (new)

Directive 2014/59/EU
Article 2 – paragraph 1 – point 110 c (new)

4c. In Article 2(1), the following point is added: (110 c) 'global resolution plan' means the plan prepared by the home resolution authority for the relevant group;

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 18

Directive 2014/59/EU
Article 27 – paragraph 1 – point i

18. In Article 27(1), the following point (i) is added: ‘(i) Article 29a are complied with, suspend any payment or delivery obligation to which an institution or entity referred to in point (b), (c) or (d) of Article 1(1) is a party.’.deleted where the conditions laid down in

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a

~~[...]~~deleted

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 1

1. Member States ~~shall establish~~may provide that their respective ~~competent authority, after having consulted the resolution authority, can exercise the power referred to in point (i) of~~resolution authority has the power to suspend payment or delivery obligations to which an institution or an entity refereed to in points b), c) or d) of Article 1(1) is party when the resolution authority, after the determination that the institution is failing or likely to fail pursuant to Article 327 (1) ~~only where~~(a) has been made, decides that the exercise of the suspension power is necessary to ~~carry out the assessment provided for in the first sentence of~~reach the determination that the conditions under Article 2732 (1) (b) and (c) are met or to ~~mak~~choose the ~~determination provided for in point (a) of Article 32(1)~~appropriate resolution actions.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 2

2. The suspension referred to in paragraph 1 shall not exceed the minimum period of time that the ~~competent~~resolution authority considers necessary to carry out the assessment referred to in point (a) ~~of Article 27(1) or to make the determination referred to in point (a~~(b) and (c) of Article 32(1) and shall ~~in any event~~ not exceed 52 working days.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 3 – point c a (new)

(c a) financial contracts.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 4

4. When exercising a power under this Article, ~~competent~~resolution authorities shall have regard to the impact the exercise of that power might have on the orderly functioning of financial markets.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 7

7. Member States shall ensure that ~~competent~~resolution authorities notify the ~~resolution~~ competent authorities about the exercise of any power referred to in paragraph 1 without delay.

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a – paragraph 8

8. Member States that make use of the option laid down in Article 32 (2) shall ensure that the suspension power referred to in paragraph 1 of this Article can also be exercised by the resolution authority, after having consulted the competent authority, where the exercise of that suspension power is necessary to make the determination provided for in point (a) of Article 32(1).deleted

2018/01/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 2

By way of derogation from point (l) of Article 72a(2) of Regulation (EU) No 575/2013, liabilities that arise from debt instruments with derivative features, such as structured notes, shall be included in the amount of own funds and eligible liabilities only where all of the following conditions are met: (a) arising from the debt instrument is known in advance at the time of issuance, is fixed and not affected by a derivative feature; (b) derivative feature, is not subject to any netting agreement and its valuation is not subject to Article 49(3);deleted a given amount of the liability the debt instrument, including its

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 2 – subparagraph 1 – point a

~~(a) a given amount of the liability arising from the debt instrument is known in advance at the time of issuance, is fixed and not affected by a derivative feature;~~deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 2 – subparagraph 1 – point b

~~(b) the debt instrument, including its derivative feature, is not subject to any netting agreement and its valuation is not subject to Article 49(3);~~deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

The liabilities referred to in the first subparagraph shall only be included in the amount of own funds and eligible liabilities for the part that corresponds with the amount referred to in point (a) of the first subparagraph.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 3 – subparagraph 2 – introductory part

The resolution authority's decision under this paragraph shall contain the reasons for that decision on the basis of at least the following elements:

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 3 – subparagraph 2 – point a

(a) non-subordinated liabilities referred to in the first and second paragraphs have the same priority ranking in the national insolvency hierarchy as certain liabilities that are excluded from the application of the write-down or conversion powers in accordance with Article 44(2) or Article 44(3); and

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45b – paragraph 3 – subparagraph 2 – point c

(c) the amount of subordinated liabilities shall not exceed the amount necessary to ensure that creditors referred to in point (b) shall not incur losses above the level of losses that they would otherwise have incurred in a winding up under normal insolvency proceedings.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 2 – subparagraph 1 – point b

(b) the entity or its subsidiaries that are institutions, but not resolution entities are recapitalised to a level necessary to enable them to continue to comply with the conditions for authorisation and to maintain sufficient market confidence to carry out the activities for which they are authorised under Directive 2013/36/EU, Directive 2014/65/EU or equivalent legislation ('recapitalisation');

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 3 – subparagraph 1 – introductory part

Without prejudice to the last subparagraph, for resolution entities, the amount referred to in paragraph 2 shall ~~not exceed~~be as a minimum the greater of the following:

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 3 – subparagraph 1 – point b – point ii

(ii) a recapitalisation amount that allows the resolution group resulting from resolution to restore the leverage ratio referred to in Article 92(1)(d) of Regulation (EU) No 575/2013 atnd any additional amount that the resolution authority considers necessary to sustain market confidence at the resolution group sub-consolidated level.

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 3 – subparagraph 1 a (new)

For the purposes of points (a)(ii) and (b)(ii) of the first subparagraph: (i) the recapitalisation amount shall also include any additional amount that the resolution authority considers necessary to maintain sufficient market confidence after resolution; (ii) the default additional amount shall be equivalent to the combined buffer requirement, as specified in point (6) of Article 128 of Directive 2013/36/EU, which would apply to the institution after the application of resolution tools; (iii) the additional amount required by the resolution authority may be lower than the default amount, if the resolution authority determines that a lower amount would be sufficient to sustain market confidence and ensure both the continued provision of critical economic functions by the institution and the access to funding without recourse to extraordinary financial support other than contributions from resolution financing arrangements, consistently with Article 101 (2) and Article 44(5) and (8); (iv) The assessment of the amount required to support market confidence shall take into account whether the capital position of the institution after the resolution would be appropriate in comparison with the current capital position of peer institutions.

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 3 – subparagraph 2

For the purposes of point (a) of Article 45(2), the requirement referred to in Article 45(1) shall be expressed in percentage terms as the amount calculated in accordance with point (a) of this paragraph divided by the total risk exposure amount.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59//EU
Article 45c – paragraph 3 – subparagraph 3

For the purposes of point (b) of Article 45(2), the requirement referred to in Article 45(1) shall be expressed in percentage terms as the amount calculated in accordance with point (b) of this paragraph divided by the leverage ratio exposure measure.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 4 – subparagraph 1 – introductory part

4. Without prejudice to the last subparagraph, for entities that are not themselves resolution entities, the amount referred to in paragraph 2 shall ~~not exceed~~be at least equal to the greater of any of the following multiplied by the relevant scalar:

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

(ii) a recapitalisation amount that allows the entity to restore its leverage ratio referred to in the Article 92(1)(d) of Regulation (EU) No 575/2013 and any additional amount that the resolution authority considers necessary to sustain sufficient market confidence;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23 (new)

Directive 2014/59/EU
Article 45c – paragraph 4 – subparagraph 1 a (new)

For the purposes pf point (a) of the first subparagraph, the recapitalisation amount shall also include any additional amount that the resolution authority considers necessary to maintain sufficient market confidence after resolution.

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 4 – subparagraph 1 a (new)

For the purposes of the first subparagraph, 'relevant scalar' means any figure between 0.75 and 0.90 inclusive, as determined by the resolution authority.

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 4 – subparagraph 2

For the purposes of point (a) of Article 45(2)(a), the requirement referred to in Article 45(1) shall be expressed in percentage terms as the amount calculated in accordance with point (a) divided by the total risk exposure amount.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EC
Article 45c – paragraph 4 – subparagraph 3

For the purposes of point (b) of Article 45(2)(b), the requirement referred to in Article 45(1) shall be expressed in percentage terms as the amount calculated in accordance with point (b) divided by the leverage ratio exposure measure.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 6

6. The resolution authority's decision to impose a minimum requirement of own funds and eligible liabilities under this Article shall contain the reasons for that decision~~, including a full assessment of the elements referred to in paragraphs 2 to 5~~.

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45c – paragraph 8

8. EBA shall draft regulatory technical standards which shall further specify the criteria referred to in paragraph 1 on the basis of which the requirement for own funds and permissible liabilities is to be determined in accordance with this Article. EBA shall submit those draft regulatory standards to the Commission by [1 month after the entry into force]. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1090/2010.deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

~~[...]~~deleted

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 2 – introductory part

2. The requirement referred to in Article 45(1)of entities referred to in the first paragraph shall be s~~ubject to~~et in accordance with the following conditions:

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 2 – point c

(c) the requirement may be set at 75% to 90% of the requirement calculated in accordance with Article 45 (1) and shall not exceed the contribution of the subsidiary to the consolidated requirement referred to in Article 45f(1).

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 3 – point a – point i

(i) are issued to and bought by the resolution entity either directly or indirectly through other entities in the same resolution group that bought the liabilities from the entity subject to this Article or by any existing shareholder that is not part of the same resolution group as long as the write down or conversion in accordance with (iv) does not affect the control of the subsidiary by the resolution entity;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 3 – point a – point ii

(ii) fulfil the eligibility criteria referred to in Article 72a, except for points (b) and (c) of Article 72b(2) of Regulation (EU) No 575/2013;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 3 – point a – point iv

(iv) ~~are subject to the power of~~contain contractual provisions which require that the principal amount of the liabilities be writeten down o~~r conversion in accordance with Articles 59 to 62 that is consistent with the resolution strategy o~~n a permanent basis or the liabilities be converted to Common Equity Tier 1 instruments: (a) by the resolution authority, if the entity meets the conditions for resolution specified in Article 32 (1) (a), (b) and (c) and the home resolution authority consents to or does not object to the conversion and/or write down within 24 hours of notification by the host of its intention to convert and/or write down; or (b) automatically, if the home resolution ~~group, notably by not affecting the control of the subsidiary by the resolution entity.~~ authority exercises resolution powers or initiates third country resolution proceedings to implement the global resolution strategy in respect of an entity which is part of the same resolution group as the issuer;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 4 – point c

(c) the guarantee is collateralised through a financial collateral arrangement as defined in point (a) of Article 2(1) of Directive 2002/47/EC for at least ~~50 per cent of its amount~~its full amount following appropriate conservative haircuts;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point a

(a) both the subsidiary and the resolution entity or its parent undertaking are subject to authorisation and supervision by the same ~~Member State~~competent authority;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point b

(b) the resolution entity or the highest level group entity, where different from the resolution entity, in the Member State of the subsidiary, complies on a sub- consolidated basis with the requirement referred to in Article 45f;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point c

(c) there is no current or foreseen material practical or legal impediment to the prompt transfer of own funds or repayment of liabilities by the resolution entity or its parent undertaking to the subsidiary in respect of which a determination has been made in accordance with Article 59(3), in particular when resolution action is taken in respect of the resolution entity or the parent undertaking;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point d

(d) the resolution entity or the parent undertaking satisfies the competent authority regarding the prudent management of the subsidiary and has declared, with the consent of the competent authority, that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiary are of no significance;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point e

(e) the risk evaluation, measurement and control procedures of the resolution entity or the parent undertaking cover the subsidiary;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 23

Directive 2014/59/EU
Article 45g – paragraph 5 – point f

(f) the resolution entity or the parent undertaking holds more than 50 % of the voting rights attached to shares in the capital of the subsidiary or has the right to appoint or remove a majority of the members of the management body of the subsidiary;

2018/01/31
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 2 – subparagraph 1 – introductory part

The requirement referred to in paragraph 1 may not apply where ~~the resolution authority of a Member State determines all of the following conditions are met~~:

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 2 – subparagraph 1 – point a

(a) the resolution authority of a Member State determines that the liabilities or instruments referred to in the first subparagraph can be subject to write down and conversion powers by the resolution authority of a Member State pursuant to the law of the third country or to a binding agreement concluded with that third country or;

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 2 – subparagraph 1 – point b

(b) ~~that it is legally, contractu~~an institution or entity referred to in point (b), (c) or (d) of Article 1(1) determines both that it is legally, or ~~economically~~otherwise impracticable for anthat institution or entity ~~referred to in point (b), (c) or (d) of Article 1(1)~~ to include such a contractual term in certain liabilities, and, that the failure to include the relevant contractual recognition language does not impede the resolvability of the institution;

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 2 – subparagraph 1 – point c

(c) that a waiver from the requirement referred to in paragraph 1 for certain liabilities does not impede the resolvability of the institutions and entities referred to in points (b), (c) and (d) of Article 1(1).deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 2 – subparagraph 2

The liabilities referred to in points (b) and (c) shall not include debt instruments which are unsecured liabilities, Additional Tier 1 instruments, and Tier 2 instruments. Moreover, they shall be senior to the liabilities which count towards the minimum requirement for own funds and permissible liabilitiesshall be senior to the liabilities with the ranking referred to in points (a), (b) and (c) of Article 108(2) and in Article 108 (3) and, if debt instruments, must be secured.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 6 – subparagraph 1

EBA shall develop ~~draft regulatory technical standards in order to specify the~~guidelines providing examples of conditions under which it would be legally~~, contractually or economically~~ or otherwise impracticable for an institution or entity referred to in point (b), (c) or (d) of Article 1(1) to include the contractual term referred to paragraph 1 in certain liabilities~~, and under which a waiver from the requirement referred to in paragraph 1 would not impede the resolvability of that institution or entity~~.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 6 – subparagraph 2

EBA shall ~~submit those draft regulatory technical standards to the Commission~~issue the guidelines referred to in the first subparagraph in accordance with Article 16 of Regulation (EU) No 1093/2010 12 months after entry into force of this amending Directive.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 24

Directive 2014/59/EU
Article 55 – paragraph 6 – subparagraph 3

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

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 25

Directive 2014/59/EU
Article 63 – paragraph 1 – point n

25. In Article 63(1), the following point (n) is added: ‘(n) the power to suspend payment or delivery obligations to which the institution or entity referred to in paragraph 1 is party when the resolution authority, after having consulted the competent authority, decides that the exercise of the suspension power is necessary for the effective application of one or more resolution tools or for the purposes of the valuation pursuant to Article 36.’deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 26

Directive 2014/59/EU
Article 63 –paragraphs 1a and 1b

26. In Article 63(1), the following paragraphs 1a and 1b are inserted: ‘1a. The period of the suspension pursuant to paragraph 1(n) shall not exceed the minimum period of time that the resolution authority considers necessary for the effective application of one or more resolution tools or for the purposes of the valuation pursuant to Article 36 and in any event shall not exceed 5 working days. 1b. 1(n) shall not apply to: (a) owed to systems or operators of systems desdeleted Any suspension under paragraph payment and delivery oblignated for the purposes of Directive 98/26/EC, central counterparties and third country central counterparties recognised by ESMA pursuant to Article 25 of Regulation (EU) No 648/2012, and central banks; (b) eligible claims for the purpose of Directive 97/9/EC (c) Article 2(1)(94).’ions covered deposits as defined in

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 26

Directive 2014/59/EU
Article 63 – paragraph 1a

1a. The period of the suspension pursuant to paragraph 1(n) shall not exceed the minimum period of time that the resolution authority considers necessary for the effective application of one or more resolution tools or for the purposes of the valuation pursuant to Article 36 and in any event shall not exceed 52 working days.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 26

(c) covered deposits as defined in Article 2(1)(94). and;

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 26

Directive 2014/59/EU
Article 63 – paragraph 1b – point c a (new)

(c a) financial contracts as defined in Article 2 (1) (100) of Directive 2014/59/EU.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 27

Directive 2014/59/EU
Articles 59 and 60 – titles

~~27. In the titles of Article 59 and Article 60 "and eligible liabilities" is inser~~deleted.

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 28

Directive 2014/59/EU
Article 59 – paragraph 1

28. In Article 59, paragraph 1 is replaced by the following: ‘1. convert relevant capital instruments and eligible liabilities may be exercised either: (a) or (b) action, where the conditions for resolution specified in Articles 32 and 33 are met. The power to write down or convert eligible liabilities independently of resolution action may be exercised only in relation to eligible liabilities that meet the conditions referred to in Article 45g(3)(a), except the condition related to the remaining maturity of liabilities.’.deleted The power to write down or independently of resolution action; in combination with a resolution

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 29

Directive 2014/59/EU
Article 59 – paragraphs 2 and 3

~~29. "Capital instruments" in Article 59(2) and (3) is replaced with "capital instruments and liabilities referred to in paragraph 1".~~deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 30

Directive 2014/59/EU
Article 59 – paragraphs 4 and 10

~~30. "Capital instruments" in Article 59(4) and (10) is replaced with "capital instruments or liabilities referred to in paragraph 1".~~deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 31

Directive 2014/59/EU
Article 60 – paragraph 1 – point d

31. In Article 60(1), the following point (d) is added: ‘(d) the principal amount of eligible liabilities referred to in Article 59(1) is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives set out in Article 31 or to the extent of the capacity of the relevant eligible liabilities, whichever is lower.’.deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 31

Directive 2014/59/EU
Article 60 – paragraph 1 – point d

31. In Article 60(1), the following point (d) is added: ‘(d) the principal amount of eligible liabilities referred to in Article 59(1) is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives set out in Article 31 or to the extent of the capacity of the relevant eligible liabilities, whichever is lower.’.deleted

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 32

Directive 2014/59/EU
Article 60 – paragraph 2

32. In Article 60, paragraph 2 is replaced by the following: ‘2. relevant capital instrument or a eligible liability is written down: (a) amount shall be permanent, subject to any write up in accordance with the reimbursement mechanism in Article 46(3); (b) relevant capital instrument and liability referred to in Article 59(1) shall remain under or in connection with that amount of the instrument, which has been written down, except for any liability already accrued, and any liability for damages that may arise as a result of an appeal challenging the legality of the exercise of the write-down power; (c) holder of the relevant capital instruments and liabilities referred to in Article 59(1) other than in accordance with paragraph 3.’.deleted Where the principal amount of a the reduction of that principal no liability to the holder of the no compensation is paid to any

2018/02/01
Committee: ECON

Proposal for a directive
Article 1 – paragraph 33

Directive 2014/59/EU
Article 60 – paragraph 3

~~33. In Article 60(3), "the relevant capital instruments" is replaced by "the relevant capital instruments and liabilities referred to in Article 59(1)".~~deleted

2018/02/01
Committee: ECON