We seek clarification on the role of the special manager in resolution as set out in Article 35 of Directive 2014/59/EU (BRRD). This appears to overlap with the role of the temporary administrator as defined in Article 29.
Also, is the special manager referred to in Article 35 BRRD a separate institution from that mentioned in Article 72(1) or only its special case?
On the one hand, the figure overlaps with the temporary administrator in Article 29 as it replaces the management of the institution, it has a temporary mandate (no more than one year), it may promote solutions such as an increasing capital, reorganising ownership structure or takeover of a financially sound institution when the bank still has a positive net value. On the other hand, the figure has no autonomous powers but has to implement resolution actions according to the decision of the resolution authority, overlapping with the person appointed by the RA to exercise control over the institution in resolution in Article 72(1) or with the person appointed by the RA to implement the business reorganisation plan after a bail-in is applied (see Article 51(2)). In our understanding this is not a new resolution tool but only a way to exercise control over the institution under resolution called to implement the resolution tool that best suits the specific case according to the decision of the resolution authority (i.e. sale of business or bridge bank or bad bank, not bail-in).
There is no overlapping between Article 29 and Article 35 of Directive 2014/59/EU (BRRD), in as much as they are provided for use at different stages:
Article 29 BRRD is applied within the field of supervision (early intervention) and grants the competent authority the power to appoint a temporary administrator while
Article 35 BRRD is applied in the field of resolution and grants the resolution authority the power to appoint a special manager.
It is possible for the resolution authority to exercise indirect control over the institution under resolution referred to in Article 72(1) BRRD through the appointment of a special manager as referred to in Article 35 BRRD. Also see Q&As 1769 and 2183..
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.