Single Rulebook Q&A

Question ID: 2017_3571
Legal act : Directive 2014/59/EU (BRRD)
Topic : Recovery and Resolution
Subject area: Resolution tools and powers
Article: 63(1)(b), 72(1)
Paragraph:
Subparagraph:
Article/Paragraph : n.a.
COM Delegated or Implementing Acts/EBA RTS/EBA ITS/EBA GLs: Not applicable
Subject matter : Difference between taking control and being able to exercise the control
Question:

What is the difference between taking control over the institution and being able to exercise the control?

Background on the question:

Article 63(1)(b) of Directive 2014/59/EU (BRRD) states that “Member States shall ensure that the resolution authorities have all the powers necessary to apply the resolution tools to institutions […] (b) the power to take control of an institution under resolution and exercise all the rights and powers conferred upon the shareholders, other owners and the management body of the institution under resolution”.

Article 72(1) of Directive 2014/59/EU (BRRD) states that “Member States shall ensure that, in order to take a resolution action, resolution authorities are able to exercise control over the institution under resolution.

The difference between taking control over the institution and being able to exercise the control is not clearly explained. In addition, in case of Article 63(1)(b), it is not clear what is implied by “other owners”.

Date of submission: 25/10/2017
Published as Final Q&A: 10/11/2017
EBA answer:

There is not much difference between the intentions of Articles 63(1)(b) and 72(1) of Directive 2014/59/EU (BRRD). Article 72(1) goes into more detail as to for which purposes and how the control can be exercised.

The reference to "other owners" in Article 63(1)(b) means the holders of other types of ownership instruments (although these are already included in the definition of "shareholders" under Article 2(62)).

Disclaimer:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status: Final Q&A
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