List of Q&As

State guarantee of newly issued liabilities

Should liabilities issued under Article 32(4)(d)(ii) of Directive 2014/59/EU (BRRD) meet the criteria of Additional Tier 1 or Tier 2 instruments?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2622 | Topic: Resolution objectives and triggers | Date of submission: 12/02/2016

Recovery plans for subsidiaries that are not institutions

Can the requirement to draw up and submit an individual recovery plan under Article 7(2) of Directive 2014/59/EU (BRRD) be imposed upon subsidiaries that are not institutions (e.g. financial institution, financial holding company)?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2562 | Topic: Recovery plans | Date of submission: 13/01/2016

Relation between precautionary recapitalisation and early intervention measures

What is the relation between precautionary recapitalisation and early intervention measures in case an institution would have to raise its capital base following the negative outcome of stress test?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2015_2516 | Topic: Early intervention | Date of submission: 11/12/2015

Notification requirements in the context of financial support

What does is the scope of the obligations imposed by Articles 25 (1) and 25 (6) of Directive 2014/59/EU (BRRD)?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2015_2515 | Topic: Intra-group financial support | Date of submission: 11/12/2015

References to “the group” in Articles 6 (2) and (5)

Why do Articles 6 (2) and (5) of Directive 2014/59/EU (BRRD) make reference to “the group” althugh the assessment of group recovery plans is covered under Article 8?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2015_2514 | Topic: Recovery plans | Date of submission: 11/12/2015

Changes to financial support agreements

What is the correct course of action in case of changes to financial support agreements in situations where the competent authority has already authorised a group financial support agreement and transmitted it to resolution authorities in accordance with Article 22 Directive 2014/59/EU (BRRD)?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2015_2104 | Topic: Intra-group financial support | Date of submission: 06/07/2015

Purpose of the use of the power to write down and convert capital instruments and eligible liabilities

What is the purpose of the use of the power to write down and convert capital instruments and eligible liabilities in accordance with Article 59 of Directive 2014/59/EU (BRRD), in case of transfer of assets, right or liabilities to the bridge entity or the asset management vehicle or the use of the sale of business tool?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2017_3117 | Topic: Resolution tools and powers | Date of submission: 20/01/2017

Conversion of eligible liabilities to equity

If it is not possible to convert bail-inable liabilities into equity, since, under the applicable national law, the institution may not have shareholders, would it be possible to recapitalize the institution only by writing-down relevant capital instruments and bail-inable liabilities, without converting any liabilities into equity?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2017_3116 | Topic: Resolution tools and powers | Date of submission: 20/01/2017

Principal amount in Articles 43-60

What does the term “principal amount” as referred to in Articles 43 to 63 of Directive 2014/59/EU (BRRD) refer to?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2017_3115 | Topic: Resolution tools and powers | Date of submission: 20/01/2017

AST in combination with other resolution tools

What is the rationale for using the Asset Separation Tool in combination with other resolution tools?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2017_3113 | Topic: Resolution tools and powers | Date of submission: 20/01/2017

Transfer of assets to an asset management vehicle

Can a bridge institution transfer assets to an asset management vehicle of its own accord, without the interference of the resolution authorities? Or can assets be transferred from the bridge institution to an asset management vehicle only if the resolution authorities exercise their power to transfer assets, in accordance with Article 42(1) of Directive 2014/59/EU (BRRD)?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2017_3112 | Topic: Resolution tools and powers | Date of submission: 20/01/2017

Interaction between Articles 37(2) and 59(3)

Articles 37(2) and 59(3) of Directive 2014/59/EU (BRRD) appear to be incompatible.  Article 37(2) suggests that creditors bearing losses is an additional condition for the write-down in Article 59. Without this condition being met (for instance when resolution involves the sale of the whole bank to a third party), should the capital instruments be written down?  However, Article 59(3) requires the write-down of relevant capital instruments in all cases where a resolution tool is used.  Does the Commission consider that the mandatory requirement in Article 59 should be subject to the condition in 37(2) or not? Should the mandatory requirement in Article 59 BRRD be subject to the condition in 37(2) BRRD?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2720 | Topic: Resolution tools and powers | Date of submission: 21/04/2016

Use of resolution tools without issuing a formal decision

In light of Article 32(1) and Article 82 of Directive 2014/59/EU (BRRD), should the decision initiating resolution spell out which resolution tool/s, among those listed in Article 37(3) BRRD, will be applied, or is it possible to apply resolution tools without issuing a formal decision?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2621 | Topic: Resolution objectives and triggers | Date of submission: 12/02/2016

Exception to the scope of the bail-in tool (Article 44(2)(g)(iii))

Is the exception to the scope of the bail-in tool provided for in Article 44(2)(g)(iii) of Directive 2014/59/EU (BRRD) restricted to social security contributions, or does it also extend to deposits and reserves of a social security authority?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_3041 | Topic: Resolution tools and powers | Date of submission: 08/12/2016

Direct fiscal impact and systemic implication in Article 3(6)

How can the terms “direct fiscal impact” and “systemic implication” in Article 3(6) be transposed in a way that removes ambiguity?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2620 | Topic: Other topics | Date of submission: 12/02/2016

Special resolution regimes for credit institutions not covered by the Directive / partly resolved via insolvency

Does Directive 2014/59/EU (BRRD) prevent Member State to adopt special resolution regimes (including, e.g., bail-in) for credit institutions (i) that are not covered by the Directive; or (ii) in scope of the BRRD, whose preferred strategy is liquidation under national insolvency proceedings?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2619 | Topic: Other topics | Date of submission: 12/02/2016

Fiduciary relationship

What is a “fiduciary relationship” according to Directive 2014/59/EU (BRRD)?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_3040 | Topic: Resolution tools and powers | Date of submission: 08/12/2016

Two separate ex-ante valuations for resolution purposes

In case two separate ex-ante valuations for resolution purposes have been prepared, each of which covering different purposes as per Article 36(4) of Directive 2014/59/EU (BRRD), shall both be treated as a part of the valuation and, therefore, the decision on resolution? Should they both be subjected to judicial review in line with Articles 36(13) and 85 BRRD?On a related note, can a resolution authority's decision be appealed if it does not include a decision on a specific resolution action to be taken?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2584 | Topic: Valuation | Date of submission: 20/01/2016

Meaning of “liability” in Article 60(2)(b)

Do liabilities mentioned in Article 60(2)(b) only refer to the potential liabilities for damages of the national resolution authority to the holder of the relevant capital instrument or eligible liabilities as referred to in Article 59 BRRD?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_3019 | Topic: Write-down and conversion of capital instruments | Date of submission: 23/11/2016

Use of valuation to apply resolution tools and to initiate resolution

Why is valuation part of the decision on application of resolution tools instead of the decision initiating resolution?

Legal act: Directive 2014/59/EU (BRRD)

COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

ID: 2016_2583 | Topic: Valuation | Date of submission: 20/01/2016