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DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
– having regard to the opinion of the European Central Bank of 5 July 2023,
– having regard to the opinion of the European Economic and Social Committee of 13 July 2023,
– having regard to Rule 59 of its Rules of Procedure,
– having regard to the report of the Committee on Economic and Monetary Affairs (A90000/2023),(A9-0344/2023),
1. Adopts its position at first reading hereinafter set out;
Amendment 1
Proposal for a directive
AMENDMENTS BY THE EUROPEAN PARLIAMENT*
Recital 1
to the Commission proposal
Or. en
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Amendment 2
Proposal for a
Proposal for a directive
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
Recital 3
amending Directive 2014/59/EU and Regulation (EU) No 806/2014 as regards certain aspects of the minimum requirement for own funds and eligible liabilities
Or. en
(Text with EEA relevance)
Amendment 3
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Proposal for a directive
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Recital 5
Having regard to the proposal from the European Commission,
Or. en
After transmission of the draft legislative act to the national parliaments,
Amendment 4
Having regard to the opinion of the European Central Bank,
Proposal for a directive
Having regard to the opinion of the European Economic and Social Committee,
Recital 6
Acting in accordance with the ordinary legislative procedure,
Or. en
Whereas:
Amendment 5
(1) Directive (EU) 2019/879 of the European Parliament and of the Council and Regulation (EU) 2019/877 of the European Parliament and of the Council amended the minimum requirement for own funds and eligible liabilities (‘MREL’) set out in Directive 2014/59/EU of the European Parliament and of the Council and in Regulation (EU) No 806/2014 of the European Parliament and of the Council, which applies to credit institutions and investment firms (institutions) established in the Union as well as to any other entity that falls under the scope of Directive 2014/59/EU or Regulation (EU) No 806/2014 (entities). Those amendments provided that internal MREL, that is, MREL applicable to institutions and entities that are subsidiaries of resolution entities but are not themselves resolution entities, may be met by those institutions and entities using instruments issued to and bought by the resolution entity either directly or indirectly through other entities in the same resolution group.
Proposal for a directive
(2) The Union MREL framework was further amended by Regulation (EU) 2022/2036 of the European Parliament and of the Council which introduced specific deduction rules in the case of indirect subscription of instruments eligible for meeting the internal MREL. That Regulation introduced in Directive 2014/59/EU the requirement for the Commission to review the impact of the indirect subscription of instruments eligible for meeting the MREL on the level playing field between different types of banking group structures, including where banking groups have an operating company between the holding company identified as a resolution entity and its subsidiaries. The Commission was asked to assess whether entities that are not themselves resolution entities should be able to comply with the MREL on a consolidated basis. Furthermore, the Commission was asked to evaluate the treatment, under the rules governing the MREL, of entities whose resolution plan provides that those entities are to be wound up under normal insolvency proceedings (‘liquidation entities’). Finally, the Commission was asked to evaluate the appropriateness of limiting the amount of deductions required pursuant to Article 72e(5) of Regulation (EU) No 575/2013 of the European Parliament of the Council.
Recital 7
(3) The review of the Commission found that it would be appropriate and proportionate to the objectives pursued by the internal MREL rules to allow resolution authorities to set the internal MREL on a consolidated basis for a range of entities that is wider than the range resulting from the application of Directive 2014/59/EU and Regulation (EU) No 806/2014, where such wider range covers institutions and entities that are not resolution entities themselves, but that are subsidiaries of resolution entities and control themselves other subsidiaries▌(‘intermediate entities’) within the same resolution group. That would be in particular the case for those banking groups that are headed by a holding company. In such cases, the intermediate entities naturally centralise intragroup exposures and channel the internal MREL eligible resources pre-positioned by the resolution entity. Due to that structure, such intermediate entities could be disproportionately affected by the deduction rules. ▌The MREL framework would be more proportionate to only apply the deduction rules to the own funds of liquidation entities if the issuing entity is ▌subjected to a MREL decision. In the cases where there is no MREL decision, it is not expected that the write down and conversion powers will need to be exercised in respect of those liquidation entities, thus removing the need to safeguard the loss and capital transfer mechanisms within resolution groups, which was the purpose of the deduction rules introduced by Regulation (EU) 2022/2036. By contrast, the remaining entities of the resolution group will need to be recapitalised by the resolution entity in case of distress or failure. The necessary MREL resources should ▌be present at all levels of the resolution group and their availability for loss absorption and recapitalisation should be ensured through the deduction mechanism. Thus, the review of the Commission concluded that intermediate entities should continue to deduct the full amount of their holdings of internal MREL eligible resources issued by other non-liquidation entities in the same resolution group.
Or. en
(3a) For the proper functioning of the deduction and consolidation frameworks and for the calculation of the MREL for specific entities, the definition of liquidation entity is crucial. The definition focuses on the identification of liquidation entities at the stage of resolution planning. Therefore, a proper assessment of institutions and entities in the scope of Directive 2014/59/EU and Regulation (EU) No 806/2014 by the national resolution authorities and the Single Resolution Board while drafting the resolution plan is essential. A central part of that assessment is to identify whether the institution or entity carries out critical functions. Without prejudice to the assessment of the importance of the institution or entity at national or regional level, a thorough analysis of the standing of the potential liquidation entity within the group is expected to take place. An institution or entity that represents a significant part of the total risk exposure amount, leverage ratio exposure or operating income of the group should not in principle be designated as a liquidation entity.
Amendment 6
(4) Under Article 45f of Directive 2014/59/EU and Article 12g of Regulation (EU) No 806/2014, institutions and entities are to comply with the internal MREL on an individual basis. Compliance on a consolidated basis is only allowed in two specific cases: for Union parent undertakings that are not resolution entities and are subsidiaries of third-country entities, and for parent undertakings of institutions or entities waived from internal MREL. Pursuant to Article 72e(5) of Regulation (EU) No 575/2013, where an intermediate entity complies with its MREL on a consolidated basis, that entity is not obliged to deduct holdings of internal MREL eligible resources of other entities belonging to the same resolution group and included in its consolidation perimeter, as compliance with the internal MREL on a consolidated basis achieves a similar effect. The review carried out by the Commission has demonstrated that intermediate entities of banking groups headed by a holding company should also be able to comply with the internal MREL on a consolidated basis. Furthermore, the review demonstrated that, where the intermediate entity is subject to own funds requirements or to a combined buffer requirement on a consolidated basis, compliance with the internal MREL on an individual basis could create a risk that the internal MREL eligible resources pre-positioned at the level of the intermediate entity are not sufficient to restore compliance with the applicable consolidated own funds requirement after the write down and conversion of those internal MREL eligible resources. In addition, a key input in the calculation of the MREL for the institution or entity concerned would be missing where the additional own funds requirement or the combined buffer requirement were set at a different level of consolidation, making the calculation of the requirement challenging. Similarly, the power of resolution authorities to prohibit, in accordance with Article 16a of Directive 2014/59/EU and Article 10a of Regulation (EU) No 806/2014, certain distributions above the maximum distributable amount related to the MREL in respect of the individual subsidiary becomes challenging to exercise where the key metric, the combined buffer requirement, is not set on the same basis as the internal MREL. For those reasons, the possibility to comply with the internal MREL on a consolidated basis should also be available to other types of banking group structures, whenever the intermediate entity is subject to own funds requirements ▌on a consolidated basis only. However that approach should not be chosen where it would unduly increase the internal MREL target, in particular because of the prevalence of liquidation entities within the subgroup.
Proposal for a directive
(5) To ensure that the possibility to comply with MREL on a consolidated basis is available only in the relevant cases ▌and does not lead to a shortage of internal MREL eligible resources across the resolution group, the power to set the internal MREL on a consolidated basis for intermediate entities should be a discretionary power of the resolution authority and should be subject to certain conditions. The intermediate entity should be the only direct subsidiary, that is an institution or an entity, of a resolution entity which is a parent Union parent financial holding company or a Union parent mixed financial holding company, is established in the same Member State and is part of the same resolution group. Alternatively, the intermediate entity concerned should comply with the additional own funds requirement ▌on the basis of its consolidated situation only. In both cases, however, compliance with the internal MREL on a consolidated basis only should not, in the assessment of the resolution authority, negatively affect in a significant way the resolvability of the resolution group concerned, nor the application by the resolution authority of the power to write down or convert relevant capital instruments and eligible liabilities of the intermediate entity concerned or of other entities in its resolution group. One situation where the setting of the internal MREL on a consolidated basis would be detrimental to the resolvability of the resolution group, may be where the amount of that MREL would not allow to ensure compliance with the individual own funds requirements applicable after the exercise of the write-down and conversion powers.
Recital 8
(6) Pursuant to Article 45f(2) of Directive 2014/59/EU and Article 12g(2) of Regulation (EU) No 806/2014, intermediate entities may comply with the consolidated internal MREL using own funds and eligible liabilities. To fully deliver on the possibility to comply with MREL on a consolidated basis, it is necessary to ensure that the eligible liabilities of intermediate entities are computed in a way that is similar to the computation of own funds. The eligibility criteria for eligible liabilities that may be used to comply with internal MREL on a consolidated basis should therefore be aligned with the rules on the calculation of consolidated own funds laid down in Regulation (EU) No 575/2013. To ensure consistency with the existing rules on the external MREL, that alignment should also reflect the existing rules laid down in Article 45b(3) of Directive 2014/59/EU and Article 12d(3) of Regulation (EU) No 806/2014 for the calculation of eligible liabilities that resolution entities may use to comply with their consolidated MREL. In particular, it is necessary to ensure that eligible liabilities issued by the subsidiaries of the entity subject to consolidated internal MREL and held by the resolution entity, either directly or indirectly through other entities of the same resolution group but outside the scope of consolidation or by existing shareholders not belonging to the same resolution group, count towards the own funds and eligible liabilities of the entity subject to consolidated internal MREL.
Or. en
(7) Under the current framework, for entities earmarked for liquidation ▌, the MREL is set, in the majority of the cases, to the amount necessary for loss absorption, which corresponds to the own funds requirements. In such cases, the MREL does not entail for the liquidation entity any additional requirement directly related to the resolution framework. That means that a liquidation entity can fully comply with the MREL by complying with the own funds requirements and that a dedicated decision of the resolution authority determining the MREL does not contribute in a meaningful way to the resolvability of liquidation entities. Such a decision entails many procedural obligations for resolution authorities and for the liquidation entities without a corresponding benefit in terms of improved resolvability. For that reason, resolution authorities should not set a MREL for liquidation entities.
Amendment 7
(8) When preparing resolution plans and assessing the resolvability of resolution groups, resolution authorities may consider that a subsidiary institution qualifies as a liquidation entity as the exercise of the write-down and conversion powers is not envisaged in respect of that entity. Where that is the case, the group entity may not need to hold own funds and eligible liabilities in excess of its own funds requirements. In those circumstances, intermediate entities should not be required to deduct from their internal MREL capacity their holdings of own funds that are issued by liquidation entities which are not subject to a MREL decision. However, they should not be required to deduct liabilities that would meet the conditions for compliance with the internal MREL and that are issued by liquidation entities. In such a case, the liquidation entity is no longer required to comply with the MREL, and therefore there is no indirect subscription of internal MREL eligible resources through the chain formed by the resolution entity, the intermediate entity and the liquidation entity. In case of failure, the resolution strategy does not envisage that the liquidation entity would be recapitalised by the resolution entity. That means that the upstreaming of losses above the existing own funds from the liquidation entity to the resolution entity, via the intermediate entity, would not be expected, and neither would the downstreaming of capital in the opposite direction. That adjustment to the scope of the holdings to be deducted in the context of the indirect subscription of internal MREL eligible resources would thus not affect the prudential soundness of the framework. Not requiring intermediate entities, in some cases, to deduct from their internal MREL capacity their holdings of own funds, as opposed to only liabilities that do not qualify as own funds instruments, is a justified proportionate approach, as liquidation entities, in many cases, do not issue any liabilities.
Proposal for a directive
(9) The main objective of the permission regime for the reduction of eligible liabilities instruments laid down in Articles 77(2) and 78a of Regulation (EU) No 575/2013, which is also applicable to institutions and entities subject to the MREL and to the liabilities issued to comply with MREL, is to enable resolution authorities to monitor the actions that result in a reduction of the stock of eligible liabilities and to prohibit any action that would amount to a reduction beyond a level which resolution authorities deem adequate. Where the resolution authority has not adopted a decision determining the MREL in respect of an institution or entity, that objective is not relevant. Moreover, institutions or entities that are not subject to a decision determining the MREL might not have eligible liabilities on their balance sheet, even if some of their liabilities would theoretically meet the criteria for MREL eligibility. Institutions or entities for which no decisions determining the MREL have been adopted should therefore not be required to obtain the prior permission of the resolution authority to effect the call, redemption, repayment or repurchase of liabilities that would meet the eligibility requirements for MREL.
Recital 9
(10) There are liquidation entities for which the resolution authority may consider that the MREL should exceed the amount ▌for loss absorption . That is the case where the resolution authorities consider that such a higher amount is necessary to protect financial stability or address the risk of contagion to the financial system. In those situations, resolution authorities should determine a MREL for the liquidation entity consisting of an amount sufficient to absorb losses, increased by the amount necessary to properly address the potential risks identified by he resolution authorities. The liquidation entity concerned should comply with the MREL and should not be exempted from the prior permission regime laid down in Articles 77(2) and 78a of Regulation (EU) No 575/2013. Any intermediate entities belonging to the same resolution group as the liquidation entity concerned should continue to be required to deduct from their internal MREL capacity their holdings of internal MREL eligible resources issued by that liquidation entity. In addition, since liquidation proceedings take place at the level of the legal entity, liquidation entities still subject to MREL should comply with the requirement on an individual basis only. Lastly, certain eligibility requirements related to the ownership of the liability concerned are not relevant, as without the exercise of the write-down and conversion powers there would be no need to preserve the control of the subsidiary by the resolution entity, and should therefore not apply.
Or. en
(11) Pursuant to Article 45i of Directive 2014/59/EU, institutions and entities are to report to their competent and resolution authorities the levels of eligible and bail-inable liabilities and the composition of those liabilities, and to disclose that information to the public, together with the level of their MREL, on a regular basis. For liquidation entities, no such reporting or disclosure is required. However, to ensure the transparent application of the MREL, those reporting and disclosure obligations should also apply to liquidation entities for which the resolution authority determines that the MREL should be higher than the amount sufficient to absorb losses. In accordance with the principle of proportionality, the resolution authority should ensure that those obligations do not go beyond what is necessary to monitor compliance with the MREL.
Amendment 8
(12) Directive 2014/59/EU and Regulation (EU) No 806/2014 should therefore be amended accordingly.
Proposal for a directive
(13) To ensure consistency, the national measures transposing the amendments to Directive 2014/59/EU and the amendments to Regulation (EU) No 806/2014 should apply from the same date. However, to ensure that the derogation in Regulation (EU) No 806/2014, Article 12g(1), subparagraph 4, is effective immediately, Article 2, point (3), of this amending Directive should apply one day after the date of entry into force of this amending Directive.
Recital 10
(13a) This amending Directive should respect the principles of the original review mandate to the Commission by the European Parliament and the Council to ensure proportionality and a level playing field between different types of banking group structures.
Or. en
(14) Since the objectives of this Directive, namely to adjust the treatment of liquidation entities under the MREL framework and the possibility for resolution authorities to determine the internal MREL on a consolidated basis, cannot be sufficiently achieved by the Member States but can rather, by amending rules that are already set at Union level, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on the European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives,
Amendment 9
HAVE ADOPTED THIS DIRECTIVE:
Proposal for a directive
Article 1
Recital 14
Amendments to Directive 2014/59/EU
Or. en
Directive 2014/59/EU is amended as follows:
Amendment 10
(1) in Article 2(1), the following point (83aa) is inserted:
Proposal for a directive
‘(83aa) ‘liquidation entity’ means a legal person established in the Union in respect of which the group resolution plan or, for entities that are not part of a group, the resolution plan, provides that the entity is to be wound up under normal insolvency proceedings; or with regard to an entity within a resolution group other than a resolution entity, the group resolution plan does not envisage the exercise of the write-down and conversion powers with respect to that entity;’;
Article 1 – paragraph 1 – point 1
(2) Article 45c is amended as follows:
Directive 2014/59/EU
(a) in paragraph 2, the second and third subparagraphs are deleted;
Article 2 – paragraph 1 – point 83aa
(b) the following paragraph 2a is inserted:
Or. en
‘2a. Resolution authorities shall not determine the requirement referred to in Article 45(1) for liquidation entities.
Amendment 11
By way of derogation from the first subparagraph, ▌the ▌resolution authority may assess whether it is justified to determine the requirement referred to in Article 45(1) for a liquidation entity on an individual basis in an amount exceeding the amount sufficient to absorb losses, taking into account, in particular, any possible impact on financial stability and on the risk of contagion to the financial system ▌. In those cases, liquidation entities shall meet the requirement referred to in Article 45(1) by using one or more of the following:
Proposal for a directive
(a) own funds;
Article 1 – paragraph 1 – point 2 – point b
(b) liabilities that fulfil the eligibility criteria referred to in Article 72a of Regulation (EU) No 575/2013, with the exception of Article 72b(2), points (b) and (d), of that Regulation;
Directive 2014/59/EU
(c) the liabilities referred to in Article 45b(2).
Article 45c – paragraph 2a – subparagraph 2
Articles 77(2) and 78a of Regulation (EU) No 575/2013 shall not apply to liquidation entities for which the resolution authority has not determined the requirement referred to in Article 45(1) of this Directive.
Or. en
Holdings of own funds instruments or holdings of liabilities issued by subsidiaries which are liquidation entities for which the resolution authority has not determined the requirement referred to in Article 45(1) shall not be deducted under Article 72e(5) of Regulation (EU) No 575/2013.’;
Amendment 12
(3) Article 45f is amended as follows:
Proposal for a directive
(a) in paragraph 1, the following ▌subparagraph is inserted after the third subparagraph:
Article 1 – paragraph 1 – point 2 – point b
‘By way of derogation from the first and second subparagraphs, where intermediate entities would be disproportionately affected by the deduction rules set out in Article 72e(5) of Regulation (EU) No 575/2013, resolution authorities may decide to determine the requirement laid down in Article 45c on a consolidated basis for a subsidiary as referred to in this paragraph where the resolution authority confirms that all of the following conditions are met:
Directive 2014/59/EU
(a) the subsidiary meets one of the following conditions:
Article 45c – paragraph 2a – subparagraph 4
(i) the subsidiary is held directly by the resolution entity and:
Or. en
- the resolution entity is a Union parent financial holding company or a Union parent mixed financial holding company;
Amendment 13
- both the subsidiary and the resolution entity are established in the same Member State and are part of the same resolution group;
Proposal for a directive
- the resolution entity does not hold directly any subsidiary institution or entity as referred to in Article 1(1), points (b), (c) or (d), other than the subsidiary concerned;
Article 1 – paragraph 1 – point 3 – point a
(ii) the subsidiary is subject to the requirement referred to in Article 104a of Directive 2013/36/EU ▌on a consolidated basis only;
Directive 2014/59/EU
(b) compliance with the requirement laid down in Article 45c on a consolidated basis as a substitute for compliance with that requirement on an individual basis does not negatively affect in a significant way:
Article 45f – paragraph 1 – subparagraph 3a – point a – point ii
(i) the resolvability of the resolution group;
Or. en
(ii) the subsidiary’s capacity to comply with its own funds requirement after the exercise of the write-down and conversion powers;
Amendment 14
(iii) the internal loss transfer and recapitalisation mechanism, including the write down or conversion, in accordance with Article 59, of relevant capital instruments and eligible liabilities of the subsidiary concerned or of other entities in the resolution group.’;
Proposal for a directive
(b) the following paragraph 2a is inserted:
Article 1 – paragraph 1 – point 3 – point a
‘2a. Where an entity as referred to in paragraph 1 complies with the requirement referred to in Article 45(1) on a consolidated basis, the amount of own funds and eligible liabilities of that entity shall include the following liabilities issued in accordance with paragraph 2, point (a), of this Article by a subsidiary established in the Union included in the consolidation of that entity:
Directive 2014/59/EU
(a) liabilities issued to and bought by the resolution entity, either directly, or indirectly through other entities in the same resolution group that are not included in the consolidation of the entity complying with the requirement referred to in Article 45(1) on a consolidated basis;
Article 45f – paragraph 1 – subparagraph 3a – point b
(b) liabilities issued to an existing shareholder that is not part of the same resolution group.
Or. en
The liabilities referred to in the first subparagraph, points (a) and (b), shall not exceed the amount determined by subtracting from the amount of the requirement referred to in Article 45(1) applicable to the subsidiary included in the consolidation the sum of all of the following:
Amendment 15
(a) the liabilities issued to and bought by the entity complying with the requirement referred to in Article 45(1) on a consolidated basis, either directly, or indirectly through other entities in the same resolution group that are included in the consolidation of that entity;
Proposal for a directive
(b) the amount of own funds that are issued in accordance with paragraph 2, point (b), of this Article.’;
Article 2 – paragraph 1 – point 2 – point b
(4) in Article 45i, paragraph 4 is replaced by the following:
Regulation (EU) No 806/2014
‘4. Paragraphs 1 and 3 shall not apply to liquidation entities unless the resolution authority has determined the requirement referred to in Article 45(1) for such entity in accordance with Article 45c(2a), second subparagraph. In that case, the resolution authority shall determine the content and frequency of the reporting and disclosure obligations referred to in paragraphs 5 and 6 of this Article for that entity. The resolution authority shall communicate those reporting and disclosure obligations to the liquidation entity concerned. Those reporting and disclosure obligations shall not go beyond what is necessary to monitor compliance with the requirement determined pursuant to Article 45c(2a), second subparagraph.’;
Article 12d – paragraph 2a – subparagraph 2
Article 2
Or. en
Amendments to Regulation (EU) No 806/2014
Amendment 16
Regulation (EU) No 806/2014 is amended as follows:
Proposal for a directive
(1) in Article 3(1), the following point (24aa) is inserted:
Article 2 – paragraph 1 – point 2 – point b
‘(24aa) ‘liquidation entity’ means a legal person established in a participating Member State in respect of which the group resolution plan or, for entities that are not part of a group, the resolution plan, provides that the entity is to be wound up under normal insolvency proceedings; or with regard to an entity within a resolution group other than a resolution entity, the group resolution plan does not envisage the exercise of the write-down and conversion powers with respect to that entity;’;
Regulation (EU) No 806/2014
(2) Article 12d is amended as follows:
Article 12d – paragraph 2a – subparagraph 4
(a) in paragraph 2, the second and third subparagraphs are deleted;
Or. en
(b) the following paragraph 2a is inserted:
Amendment 17
‘2a. The Board shall not determine the requirement referred to in Article 12a(1) for liquidation entities.
Proposal for a directive
By way of derogation from the first subparagraph, ▌the Board may assess whether it is justified to determine the requirement referred to in Article 12a(1) for a liquidation entity on an individual basis in an amount exceeding the amount sufficient to absorb losses, taking into account, in particular, any possible impact on financial stability and on the risk of contagion to the financial system ▌. In those cases, liquidation entities shall meet the requirement referred to in Article 12a(1) by using one or more of the following:
Article 2 – paragraph 1 – point 3 – point a
(a) own funds;
Regulation (EU) No 806/2014
(b) liabilities that fulfil the eligibility criteria referred to in Article 72a of Regulation (EU) No 575/2013, with the exception of Article 72b(2), points (b) and (d), of that Regulation;
Article 12g – paragraph 1 – subparagraph 3a – point a – point ii
(c) the liabilities referred to in Article 12c(2).
Or. en
Articles 77(2) and 78a of Regulation (EU) No 575/2013 shall not apply to liquidation entities for which the resolution authority has not determined the requirement referred to in Article 12a(1) of this Regulation.
Amendment 18
Holdings of own funds instruments or holdings of liabilities issued by subsidiaries which are liquidation entities for which the resolution authority has not determined the requirement referred to in Article 12a(1) shall not be deducted under Article 72e(5) of Regulation (EU) No 575/2013.’;
Proposal for a directive
(3) Article 12g is amended as follows:
Article 2 – paragraph 1 – point 3 – point a
(a) in paragraph 1, the following ▌subparagraph is inserted after the third subparagarph:
Regulation (EU) No 806/2014
‘By way of derogation from the first and second subparagraphs, where intermediate entities would be disproportionately affected by the deduction rules set out in Article 72e(5) of Regulation (EU) No 575/2013, the Board may decide to determine the requirement laid down in Article 12d on a consolidated basis for a subsidiary as referred to in this paragraph where the resolution authority confirms that all of the following conditions are met:
Article 12g – paragraph 1 – subparagraph 3a – point b
(a) the subsidiary meets one of the following conditions:
Or. en
(i) the subsidiary is held directly by the resolution entity and:
Amendment 19
- the resolution entity is a Union parent financial holding company or a Union parent mixed financial holding company;
Proposal for a directive
- both the subsidiary and the resolution entity are established in the same participating Member State and are part of the same resolution group;
Article 2 – paragraph 1 – point 3 – point b
- the resolution entity does not hold directly any subsidiary as referred to in Article 2 other than the subsidiary concerned;
Regulation (EU) No 806/2014
(ii) the subsidiary is subject to the requirement referred to in Article 104a of Directive 2013/36/EU ▌on a consolidated basis only;
Article 12g – paragraph 2a – subparagraph 2 – introductory part
(b) compliance with the requirement laid down in Article 12d on a consolidated basis as a substitute for compliance with that requirement on an individual basis does not negatively affect in a significant way:
Or. en
(i) the resolvability of the resolution group,
(ii) the subsidiary’s capacity to comply with its own funds requirement after the exercise of the write-down and conversion powers; and
(iii) the internal loss transfer and recapitalisation mechanism, including the write down or conversion, in accordance with Article 21, of relevant capital instruments and eligible liabilities of the institution or subsidiary concerned or of other entities in the resolution group.’;
(b) the following paragraph 2a is inserted:
‘2a. Where an entity as referred to in paragraph 1 complies with the requirement referred to in Article 12a(1) on a consolidated basis, the amount of own funds and eligible liabilities of that entity shall include the following liabilities issued in accordance with paragraph 2, point (a), of this Article by a subsidiary established in the Union included in the consolidation of that entity:
(a) liabilities issued to and bought by the resolution entity, either directly, or indirectly through other entities in the same resolution group that are not included in the consolidation of the entity complying with the requirement referred to in Article 12a(1) on a consolidated basis;
(b) liabilities issued to an existing shareholder that is not part of the same resolution group.
The liabilities referred to in the first subparagraph, points (a) and (b), shall not exceed the amount determined by subtracting from the amount of the requirement referred to in Article 12(1) applicable to the subsidiary included in the consolidation the sum of all of the following:
(a) the liabilities issued to and bought by the entity complying with the requirement referred to in Article 12a(1) on a consolidated basis either directly, or indirectly through other entities in the same resolution group that are included in consolidation the consolidation of that entity;
(b) the amount of own funds that are issued in accordance with paragraph 2, point (b), of this Article.’.
Article 3
Transposition
Member States shall adopt and publish, by … [OP please insert the date = 6 months after the date of entry into force of this amending Directive] at the latest, the laws, regulations and administrative provisions necessary to comply with Article 1. They shall forthwith communicate to the Commission the text of those provisions.
Member States shall apply those provisions from … [OP please insert the date = 1 day after the transposition date of this amending Directive].
When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by Article 1.
Article 4
Entry into force and application
This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Article 2 , points (1) and (2), shall apply from … [OP please insert the date = 1 day after the transposition date of this amending Directive].
Article 2, point (3), shall apply from … [one day from the date of entry into force of this amending Directive].
Article 2 shall be binding in its entirety and directly applicable in all Member States.
Article 5
Addressees
This Directive is addressed to the Member States.
Done at Strasbourg,
For the European Parliament For the Council
The President The President
ANNEX: LIST OF ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT
The following list is drawn up under the exclusive responsibility of the rapporteur. The rapporteur has received input from the following entities or persons in the preparation of the report, until the adoption thereof in committee:
PROCEDURE – COMMITTEE RESPONSIBLE
FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE