We agree with the approach. However, the draft RTS addresses only the issue of independence from the resolution authority and any related conflict of interest. It is not clear as to which extent other authorities are included, in particular those which the BRRD refers to. We therefore request a clarification in the wording throughout the Draft RTS. Accordingly, it should rather be “public authorities, including the resolution authorities” instead of “public, including the resolution, authorities”. See e.g. Art. 36(1) for the wording which is correct in our view and Art. 4(1) for the one which we believe is not.
In order to satisfy the requirement of independence from any public authority, at a minimum, independence from government departments, the Central Bank, competent authorities and resolution funds (if appropriate) should be ensured and the RTS should be amended to include a specification in this regard.
Article 3(1) again refers only to separation from the resolution authority while Article 3(3) mentions the valuer not taking instructions or guidance from any public authority (a term which has not been defined as set out above).
In this regard, Article 3(1) refers only to separation from the resolution authority while Article 3(3) mentions the valuer not taking instructions or guidance from any public. We believe this should be further clarified.
While a period of time of 3 years might be an appropriate time, the wording of Article 4(5) is very general and could potentially lead to a lack of available valuers. Article 3 requires the valuer to be a legal person, while Article 2 requires a sufficient number of resources, suggesting that the most likely valuers would be accounting firms (other than the statutory auditor of the institution who is explicitly excluded in accordance with Article 4(7)) or similar professional services firms.
In large banking groups, it is possible (in some countries even required) that audits are carried out jointly by at least two firms, and small entities in less significant jurisdictions (considered to be affiliates in the sense of Article 4(5)) could be audited by yet another firm. Given an auditor independence requirement, those firms not engaged in the audit might provide tax and legal services to one or more entities of the group or carry out consulting engagements.
Given that Article 4(5) prevents the independent valuer from having ‘offered services or having had business or other relationships with the institution’ and if these could be ‘reasonably perceived to influence their judgement’, this approach could potentially suspend all of the major accounting firms from the position of an independent valuer. This is especially the case as the restriction presumably applies to the legal person, i.e. the whole firm, rather than specific individuals within it.
We believe that there should be more clarity on the interpretation of ‘reasonably perceived’ as a possible interpretation of this aspect could expulse the vast majority of potential valuers.
In general we do not have any objections to tasking the temporary administrator as an independent valuer; however, the reservations mentioned under our answer to question 2 equally apply in this case.
One potential additional case could be where the institution in resolution had undergone (in the last 3 years prior to resolution?) a merger / an acquisition and its assets and liabilities (or those of one or more of its affiliates) had been valued for the purposes of this transaction. The valuer that undertook the valuation in this case should also be excluded as a potential independent valuer.
Having said this, both the statutory auditor and the valuer as set out above would already be excluded due to the provisions of Article 4(5), so it is not clear whether point 7 is even needed (especially as the restriction only covers one year, while Article 4(5) would extend to a three-year period).