Can you clarify if there is a distinction between Article 42(1) and Article 42(3) of Directive 2014/59/EU (BRRD): does the assets separation tool allow Resolution Authorities to transfer rights and liabilities as well as assets?
Article 42 of the BRRD is about the asset separation tool, but paragraph 1(b) reads that the resolution authorities cannot only transfer assets, but rights and liabilities as well. Is it really intended that rights and liabilities can be transferred to a asset separation tool? If so, why are they not mentioned in Article 42(3)?
Article 42(1) of Directive 2014/59/EU (BRRD) refers to assets as well as rights and liabilities, while Article 42(3) only refers to assets.
The asset separation tool, although its name may suggest otherwise, does not only govern the transfer of assets but also the transfer of rights and liabilities to the asset management vehicle. This is further clarified by the definition in Article 2(1)(55) of the BRRD.
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.
Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.