S.I. No. 289/2015 - European Union (Bank Recovery and Resolution) Regulations 2015

• (a) consist of a recovery plan for the group headed by the parent or the Union parent undertaking as a whole, and

• (b) identify measures which may be required to be implemented at the level of the parent or Union parent undertaking or at the level of a subsidiary.

• (3) In accordance with the procedure set out in Regulation 15, where an institution authorised in the State is a subsidiary of a Union parent undertaking, the competent authority may direct the subsidiary to draw up and submit a recovery plan on an individual basis and, in such cases, the provisions of Regulations 11 to 13 shall apply.

• (4) Where a group recovery plan has been submitted to the competent authority as consolidating supervisor, provided that the confidentiality requirements of the Bank Recovery and Resolution Directive are in place in other Member States, the competent authority shall transmit the group recovery plan to the following:

• (a) the relevant competent authorities referred to in Articles 115 and 116 of the Capital Requirements Directive;

• (b) the Union competent authorities of the Member States where significant branches are located, insofar as the group recovery plan is relevant to that branch;

• (c) the resolution authority;

• (d) the Union resolution authorities of subsidiaries.

• (5) A group recovery plan shall set out measures to be taken by the group or institutions within the group following a financial deterioration for the purposes of—

• (a) achieving the stabilisation of the group as a whole, or any institution of the group,

• (b) addressing or removing the causes of the financial deterioration for the group or institution, and

• (c) restoring the financial position of the group or the institution, while also taking into account the financial position of other group entities.

• (6) A group recovery plan shall include arrangements to ensure the coordination and consistency of measures to be taken at the level of—

• (a) the parent or Union parent undertaking,

• (b) entities referred to in Regulation 2(1)(c) to (i),

• (c) subsidiaries, and

• (d) significant branches, where applicable, in accordance with the Capital Requirements Directive or the Capital Requirements Regulations.

• (7) A group recovery plan, and any plan drawn up for an individual subsidiary, shall include the elements specified in Regulation 11 and such plans shall include, where applicable, arrangements for the provision of intra-group financial support pursuant to an agreement concluded in accordance with Chapter 3.

• (8) Group recovery plans shall include a range of options for recovery actions to be taken in the scenarios provided for in Regulation 11(4) to (8).

• (9) For each of the scenarios referred to in paragraph (8), a group recovery plan shall identify whether there are obstacles to the implementation of recovery measures within the group, including at the level of individual entities covered by the plan, and whether there are substantial practical or legal impediments to the prompt transfer of own funds or the repayment of liabilities within the group.

• (10) The management body of the parent or the Union undertaking drawing up the group recovery plan pursuant to paragraph (1) shall assess and approve a group recovery plan before it is submitted to the competent authority.

Assessment of group recovery plans.

• (2) The assessment referred to in paragraph (1) shall be made in accordance with the procedure established in Regulation 13 and this Regulation and shall take into account the potential impact of the recovery actions and measures on financial stability in all Member States in which the group operates.

• (3) Where the competent authority is consolidating supervisor, it shall endeavour to reach a joint decision with Union competent authorities of subsidiaries on the following:

• (a) the review and assessment of the group recovery plan;

• (b) whether a recovery plan on an individual basis will be drawn up for institutions that are part of the group;

• (c) the application of the measures referred to in Regulation 13(5) to (10).

• (4) Where the competent authority is responsible for the supervision of a subsidiary of a Union parent undertaking, it shall endeavour to reach a joint decision with the consolidating supervisor on the matters referred to in paragraph (3)(a) to (c).

• (5) In the cases referred to in paragraphs (3) and (4), the competent authority shall endeavour to reach a joint decision with the Union competent authorities not later than 4 months after the date of the transmission of the group recovery plan in accordance with Regulation 14(4).

• (6) Subject to paragraph (7), the competent authority may request the European Banking Authority to assist—

• (a) in reaching a joint decision, in accordance with Article 31(c) of Regulation (EU) No 1093/2010, or

• (b) in reaching an agreement in accordance with Article 19(3) of Regulation (EU) No 1093/2010 in relation to the assessment of recovery plans and implementation of the measures provided for in Regulation 13(10)(a), (b) and (d).

• (7) The competent authority shall not refer the matter to the European Banking Authority after the end of the four-month period or after a joint decision has been reached.

• (8) Where the competent authority is consolidating supervisor and the Union competent authorities and the competent authority have not made a joint decision within 4 months of the date of transmission on—

• (a) the review and assessment of the group recovery plan, or

• (b) any measures the Union parent undertaking is required to take in accordance with Regulation 13(5) to (10),

the competent authority shall make its own decision on that matter and such decision shall have regard to the views and reservations of Union competent authorities expressed during the four-month period.

• (9) The competent authority shall notify in writing the decision under paragraph (8) to the Union parent undertaking and to the Union competent authorities.

• (10) Subject to paragraphs (11) and (12), where, at the end of the four-month period referred to in paragraph (5), any Union competent authority or the competent authority has referred a matter mentioned in paragraph (6) to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the competent authority shall defer the decision and await any decision that that other authority may take in accordance with Article 19(3) of that Regulation, and shall take its decision in accordance with any decision of that other authority.

• (11) Where the European Banking Authority has not made a decision within one month, the decision of the competent authority as consolidating supervisor shall apply.

• (12) Where the competent authority is responsible for the supervision of a subsidiary of a Union parent undertaking and it and the Union competent authorities have not made a joint decision within 4 months of the date of transmission on—

• (a) whether a recovery plan on an individual basis is to be drawn up for the institutions under its jurisdiction, or

• (b) the application at subsidiary level of the measures referred to in Regulation 13(5) to (10),

the competent authority shall make its own decision on that matter, and the competent authority shall notify such decision to the other competent authorities.

• (13) Where the European Banking Authority has not made a decision within one month, the decision of the competent authority in relation to the subsidiary shall apply.

• (14) Where a Union competent authority has made its own decision in relation to a matter referred to in paragraph (12)(a) and (b), the competent authority shall not be prevented from reaching a joint decision with the relevant Union competent authorities on a group recovery plan covering the group entities in the State and in the Member States of those other competent authorities.

• (15) Any joint decision or decision taken by a Union competent authority in the absence of a joint decision under this Regulation shall be recognised as conclusive and applied by the competent authority.

• (16) For the purposes of paragraphs (7), (10) and (12), the four-month period shall be deemed to be the conciliation period within the meaning of Regulation (EU) No 1093/2010.

• (17) A decision of the competent authority under paragraph (8) or (12) is an appealable decision for the purposes of Part VIIA of the Act of 1942.

Recovery plan indicators.

• (2) Each institution or group shall put in place appropriate arrangements for the regular monitoring of the framework of indicators referred to in paragraph (1).

• (3) The framework of indicators referred to in paragraph (1)—

• (a) shall be reviewed and assessed by the competent authority as part of the assessment of the recovery plan in accordance with Regulations 13 and 15,

• (b) shall be capable of being monitored easily, and

• (c) may include indicators of a qualitative or quantitative nature relating to the financial position of the institution or group.

• (4) Notwithstanding paragraphs (1) to (3), an institution or group may—

• (a) take action under its recovery plan where the relevant indicator has not been met but where the management body of the institution or group considers it appropriate in the circumstances, or

• (b) refrain from taking such an action where, although the relevant indicator has been met, the management body of the institution or group does not consider it appropriate in the circumstances.

• (4) An institution or group shall notify a decision—

• (a) to take an action referred to in the recovery plan, or

• (b) to refrain from taking such an action,

in writing to the competent authority without delay.

Resolution plans

Resolution plans.

• (2) Prior to drawing up the resolution plan under paragraph (1), the resolution authority shall consult with—

• (a) the competent authority, and

• (b) the Union resolution authorities of any significant branches of the institution outside the State insofar as is relevant to the significant branch.

• (3) A resolution plan shall set out the resolution actions which the resolution authority plans to take in the event that the institution meets the conditions for resolution.

• (4) The resolution authority shall disclose the information referred to Regulation 18(2)(a) to the institution concerned.

• (5) When drawing up a resolution plan, the resolution authority shall identify any material impediments to resolvability and, where necessary and proportionate, outline relevant actions for how those impediments could be addressed, in accordance with this Chapter.

• (6) Subject to paragraph (7), the resolution authority shall review resolution plans, and update them where appropriate, after any material changes to the legal or organisational structure of the institution or to its business or its financial position that could have a material effect on the effectiveness of the plan or otherwise necessitates a revision of the resolution plan.

• (7) The resolution authority shall review resolution plans, and update them where appropriate, at least annually.

• (8) For the purpose of the revision or update of the resolution plans referred to in paragraphs (6) and (7)—

• (a) the resolution authority may direct institutions to assist them in the drawing up and updating of the plans and, where required, institutions shall provide such assistance, and

• (b) institutions and, where it becomes aware, the competent authority shall promptly communicate to the resolution authority any change that necessitates such a revision or update.

• (9) The resolution authority shall ensure that a resolution plan takes into consideration relevant scenarios including the following:

• (a) scenarios in which the institution’s failure occurs at a time of general financial instability or system-wide adverse events;

• (b) scenarios in which its failure is caused by institution-specific factors.

• (10) In preparing and assessing a resolution plan and assessing the resolvability of the institution, the resolution authority shall not assume any of the following:

• (a) any extraordinary public financial support, other than through the use of the Fund;

• (b) any emergency liquidity assistance provided by the Bank or by another central bank;

• (c) any liquidity assistance provided by the Bank or by another central bank under non-standard collateralisation, duration and interest rate terms.

• (11) A resolution plan shall include an analysis of how and when an institution may apply, under the scenarios considered in the plan, to access the Bank’s, or another central bank’s, liquidity facilities and identify those assets which would be expected to qualify as collateral.

Contents of resolution plan.

• (2) A resolution plan drawn up under Regulation 17 shall include the following, which shall be quantified whenever appropriate and possible:

• (a) a summary of the key elements of the plan;

• (b) a summary of any material changes to the institution that have occurred since the most recent resolution information was provided to the resolution authority by the institution pursuant to Regulation 20;

• (c) a demonstration of how any critical functions and core business lines could be legally and economically separated, to the extent necessary, from other functions so as to ensure continuity upon the failure of the institution;

• (d) an estimation of the timeframe for executing each material aspect of the plan;

• (e) a detailed description of the assessment of resolvability carried out in accordance with Regulations 17(5) and 26;

• (f) a description of any measures required pursuant to Regulation 28 to address or remove impediments to resolvability identified as a result of the assessment carried out in accordance with Regulation 26;

• (g) a description of the processes for determining the value of the critical functions, core business lines and assets of the institution, and the extent to which these could be readily sold to another party;

• (h) a detailed description of the arrangements for ensuring that the information required pursuant to Regulation 20 is up to date and at the disposal of the resolution authority and the Union resolution authorities at all times;

• (i) an explanation of how the resolution options could be financed without assuming access to any of the sources mentioned in Regulation 17(10);

• (j) a detailed description of the different resolution strategies that could be applied under different scenarios and the timeframe for the implementation of these strategies;

• (k) a description of any critical interdependencies;

• (l) a description of measures to preserve access to payments and clearing services and other infrastructures, and an assessment of the portability of client positions;

• (m) an analysis of the impact of the plan on the employees of the institution, including an assessment of any associated costs, and a description of any envisaged procedures to consult employees during the resolution process;

• (n) a plan for communicating with the media and the public;

• (o) the level of the minimum requirement for own funds and eligible liabilities pursuant to Regulation 81(1) and a deadline to reach that level, where applicable;

• (p) where applicable, the part of the minimum requirement for own funds and eligible liabilities which the institution is required to meet through contractual bail-in instruments pursuant to Regulation 84(4) and a deadline to reach that level, where applicable;

• (q) a description of essential operations and systems and plans for maintaining the continuous functioning of the institution’s operational processes;

• (r) where applicable, any opinion expressed by the institution in relation to the resolution plan.

Maintenance and production of information for purpose of resolution plans.

• (2) The resolution authority may specify a time limit within which the institution or entity referred to in paragraph (1) shall be capable of producing those records of financial contracts on request and the resolution authority may set different time limits for different types of financial contracts but the same time limits shall apply to all institutions.

Information for purpose of resolution plans and cooperation from institution.

• (a) cooperate with the resolution authority in the preparation, updating and implementation of resolution plans, and

• (b) provide the resolution authority with all information necessary to prepare, update and implement resolution plans, including the items specified in Part 2 of the Schedule.

• (2) The information required under paragraph (1)(b) may include, for the purposes of facilitating a determination in accordance with Regulation 80(2)(i), any information necessary to ascertain which goods or services are critical to the daily functioning of the operations of the institution, including supplier names and details of contracts.

• (3) The competent authority shall cooperate with the resolution authority to verify whether the information referred to in paragraph (1) is in the competent authority’s possession and where such information is in the possession of the competent authority, the competent authority shall provide it to the resolution authority upon written request.

Resolution plans for institutions that are part of a group.

• (a) together with the Union resolution authorities of subsidiaries of the group outside the State, and

• (b) having consulted the Union resolution authorities of significant branches of the group outside the State in so far as is relevent to the significant branch,

prepare the group resolution plan on the basis of information provided to it in accordance with Regulation 20.

• (2) A group resolution plan shall include a plan for resolution of the group as a whole, either through resolution at the level of the Union parent undertaking or through break-up and resolution of the subsidiaries.

• (3) A group resolution plan shall identify measures for the resolution of—

• (a) the Union parent undertaking,

• (b) subsidiaries of the group located in the Union,

• (c) entities referred to in Regulation 2(1)(c) to (i), and

• (d) subject to Part 6, subsidiaries of the group located outside the Union.

• (4) In addition to the matters set out in Regulation 18, a group resolution plan prepared by the resolution authority shall—

• (a) set out the resolution actions that could be taken in relation to group entities, both through resolution actions in respect of the entities referred to in Regulation 2(1)(b) to (i), the parent undertaking and subsidiary institutions and through coordinated resolution actions in respect of subsidiary institutions, in the scenarios provided for in Regulation 17(9),

• (b) examine the extent to which the resolution tools and powers could be applied in a coordinated way to group entities established in the Union, including measures to facilitate the purchase by a third party of—

• (i) the group as a whole,

• (ii) particular group entities, or

• (iii) separate business lines that are delivered by one or more group entities,

• (c) identify any potential impediments to a coordinated resolution of group entities,

• (d) where a group includes entities incorporated in third countries, identify—

• (i) the implications for the resolution of group entities within the Union, and

• (ii) appropriate arrangements for cooperation and coordination with the relevant authorities in those third countries,

• (e) identify any measures, which may include the legal or economic separation of particular functions or business lines, that are necessary to facilitate group resolution when the conditions for resolution are met,

• (f) set out any additional actions, not referred to in these Regulations, which the resolution authority intends to take in relation to the resolution of the group, and

• (g) identify how the group resolution actions could be financed and, where use of the Fund would be required, set out principles, in accordance with paragraph (5), for sharing responsibility for that financing between resolution funds in different Member States.

• (5) The principles referred to in paragraph (4)(g) shall be based on equitable and balanced criteria and shall take into account in particular the following:

• (a) Regulation 172(5);

• (b) the impact on financial stability in all Member States concerned.

• (6) In preparing and assessing a group resolution plan and assessing the resolvability of the group, the resolution authority shall not assume any of the following:

• (a) any extraordinary public financial support, other than through the use of the Fund;

• (b) any emergency liquidity assistance provided by the Bank or by another central bank;

• (c) any liquidity assistance provided by the Bank or by another central bank under non-standard collateralisation, duration and interest rate terms.

• (7) When drawing up and updating a group resolution plan, the resolution authority shall also carry out an assessment of the resolvability of the group pursuant to Regulation 27 and shall include a detailed description of this assessment of resolvability in the group resolution plan.

• (8) When preparing a group resolution plan, the resolution authority shall, together with Union resolution authorities of subsidiaries outside the State, have regard to the need to ensure that the group resolution plan does not have a disproportionate impact on any Member State.

Requirement and procedure for group resolution plans.

• (2) Subject to the confidentiality requirements in these Regulations, the Bank Recovery and Resolution Directive and paragraph (5), the resolution authority shall transmit the information provided in accordance with this paragraph to the following:

• (a) the European Banking Authority;

• (b) the Union resolution authorities of subsidiaries;

• (c) the Union resolution authorities of jurisdictions in which significant branches are located insofar as is relevant to the significant branch;

• (d) the relevant competent authorities referred to in Regulations 103 and 104 of the Capital Requirements Regulations;

• (e) the Union resolution authorities of Member States where entities referred to in Regulation 2(1)(c) to (i) are established.

• (3) The information transmitted to the European Banking Authority under paragraph (2)(a) shall include all information that is relevant to European Banking Authority’s role in group resolution planning.

• (4) The information transmitted to the authorities mentioned in paragraph (2)(b), (c), (d) and (e) shall include at a minimum all information that is relevant to the subsidiary or significant branch concerned.

• (5) The resolution authority shall not be obliged to transmit information relating to subsidiaries established in third countries without the consent of the relevant third-country competent authority or third-country resolution authority concerned.

Resolution authority as group-level resolution authority.

• (2) The resolution authority shall prepare and maintain the plan referred to in paragraph (1) after consulting any relevant Union competent authorities, including the Union competent authorities of the jurisdictions in which any significant branches are located.

• (3) The resolution authority may, at its discretion and subject to the confidentiality requirements of Article 98 of the Bank Recovery and Resolution Directive and Regulation 162, in preparing the plan referred to in paragraph (1), also consult third-country resolution authorities of jurisdictions in which the group has established subsidiaries or financial holding companies or significant branches as referred to in Article 51 of the Capital Requirements Directive.

• (4) Where—

• (a) an institution, or

• (b) the competent authority

becomes aware of any change to—

• (i) the legal or organisational structure,

• (ii) the business, or

• (iii) the financial position,

of a group (including any group entity) that could have a material effect on, or require a change to, a group resolution plan, it shall promptly inform the resolution authority in writing.

• (5) Subject to paragraph (6), the resolution authority shall review group resolution plans, and update them where appropriate, after any material change to the legal or organisational structure, to the business or to the financial position of the group including any group entity that could have a material effect on or require a change to the plan.

• (6) The resolution authority shall review group resolution plans, and update them where appropriate, at least annually.

Assessment of group resolution plan.

• (2) The resolution authority shall endeavour to reach a joint decision on a group resolution plan within 4 months of the date of transmission of the information, referred to in Regulation 22(1).

• (3) The resolution authority, whether in its role as group-level resolution authority or resolution authority for a subsidiary, may request the European Banking Authority to assist in reaching a joint decision in accordance with Article 19 of Regulation (EU) No 1093/2010 but the resolution authority shall not refer the matter to that other authority after the end of the four-month period or after a joint decision has been reached.

• (4) Where the authorities have not reached a joint decision within 4 months, the resolution authority, where it is the group-level resolution authority, shall make its own decision on the adoption of the group resolution plan.

• (5) A decision under paragraph (4) shall—

• (a) be fully reasoned,

• (b) take into account the views and reservations of Union resolution authorities, and

• (c) be provided to the Union parent undertaking by the resolution authority.

• (6) Where at the end of the four-month period referred to in paragraph (2) any Union resolution authority, or the resolution authority, has referred the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the resolution authority shall defer the decision and await any decision that that other authority may take in accordance with Article 19(3) of that Regulation, and shall take its decision in accordance with any decision of that other authority.

• (7) The four-month period under paragraph (6) shall be deemed to be the conciliation period within the meaning of Regulation (EU) No 1093/2010 and where the European Banking Authority has not made a decision within one month of the end of that four-month period, the decision of the resolution authority as group-level resolution authority shall apply.

• (8) Where a group has a subsidiary in the State and the resolution authority is the resolution authority of that subsidiary for the purposes of the Bank Recovery and Resolution Directive, the resolution authority shall endeavour to reach a joint decision with other resolution authorities on the adoption of the group resolution plan for that group.

• (9) Where the Union resolution authorities and the resolution authority have not made a joint decision within 4 months under paragraph (8), the resolution authority, as resolution authority of the subsidiary, shall make its own decision and shall draw up and maintain a resolution plan for the entities under its jurisdiction.

• (10) A decision under paragraph (9) shall—

• (a) be fully reasoned,

• (b) set out the reasons for disagreement with the proposed group resolution plan,

• (c) take into account the views and reservations of the Union competent authorities and Union resolution authorities concerned, and

• (d) be notified to the other members of the resolution college by the resolution authority.

• (11) Where, at the end of the four-month period referred to in paragraph (2), any Union resolution authority or the resolution authority has referred the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the resolution authority shall defer the decision and await any decision that that other authority may take in accordance with Article 19(3) of that Regulation, and shall take its decision in accordance with any decision of that other authority.

• (12) The four-month period under paragraph (9) shall be deemed to be the conciliation period within the meaning of Regulation (EU) No 1093/2010 and where the European Banking Authority has not made a decision within one month of the end of that four-month period, the decision of the resolution authority in relation to the subsidiary shall apply.

• (13) Where a Union resolution authority has made its own decision under Article 13(6) of the Bank Recovery and Resolution Directive, the resolution authority shall not be prevented from reaching a joint decision with the relevant Union resolution authorities on a group resolution plan covering the group entities in the State and in the Member States of those other resolution authorities.

• (14) Any joint decision or decision taken by a Union resolution authority in the absence of a joint decision under Article 13 of the Bank Recovery and Resolution Directive shall be recognised as conclusive and applied by the resolution authority.

• (15) Where the resolution authority is the group-level resolution authority and a joint decision has been taken in relation to the group resolution plan, the resolution authority shall initiate a reassessment of that plan if any of the Union resolution authorities responsible for subsidiaries in other Member States assesses under Article 13(9) of the Bank Recovery and Resolution Directive that the group resolution plan impinges on the fiscal responsibilities of its Member State.

• (16) Where—

• (a) a group has a subsidiary in the State and the resolution authority is the resolution authority for the purposes of the Bank Recovery and Resolution Directive of that subsidiary,

• (b) a joint decision has been taken by one or more of the relevant Union resolution authorities in relation to the group resolution plan, and

• (c) the resolution authority disagrees with some or all of the group resolution plan,

the resolution authority may assess whether the subject matter of the disagreement might in any way impinge on the fiscal responsibilities of the State.

• (17) Following an assessment under paragraph (16), the resolution authority shall immediately notify the European Banking Authority and the other members of the resolution college of any determination that some or all of a group resolution plan may impinge on the fiscal responsibilities of the State.

Transmission of resolution plans by resolution authority.

• (2) Where the resolution authority is the group-level resolution authority, it shall transmit the group resolution plan and any amendments thereto to the relevant Union competent authorities.

Chapter 2 Resolvability

Assessment of resolvability for institutions.

• (2) An institution shall be considered resolvable where the resolution authority assesses that it is feasible and credible that the resolution authority would be capable of—

• (a) either—

• (i) taking resolution action in respect of the institution, or

• (ii) winding up the institution under normal insolvency proceedings,

• (b) avoiding to the maximum extent possible any significant adverse effect on the financial system, including in circumstances of general financial instability or adverse system-wide events within the State or other Member States or the Union, and

• (c) ensuring the continuity of any critical functions carried out by the institution.

• (3) Where an institution is considered not to be resolvable, the resolution authority shall as soon as practicable notify the European Banking Authority in writing.

• (4) When assessing the resolvability of an institution, the resolution authority shall, at a minimum, examine the matters specified in Part 3 of the Schedule.

• (5) The resolution authority shall carry out the resolvability assessment at the same time as, and for the purposes of preparing and updating, the resolution plan in accordance with Regulation 17.

Assessment of resolvability for groups.

• (2) Prior to carrying out the assessment referred to in paragraph (1), the resolution authority shall consult the following:

• (a) the competent authority;

• (b) the Union competent authorities of subsidiaries;

• (c) Union resolution authorities of the jurisdictions in which significant branches are located insofar as is relevant to the significant branch.

• (3) A group shall be considered resolvable if the resolution authority, together with the relevant Union resolution authorities of subsidiaries of that group, assesses that it is feasible and credible that the resolution authorities would be capable of—

• (a) either—

• (i) taking resolution action in respect of group entities, or

• (ii) winding up group entities under normal insolvency proceedings,

• (b) avoiding to the maximum extent possible any significant adverse effect on the financial system, including in circumstances of general financial instability or adverse system-wide events within the State or other Member States or the Union, and

• (c) ensuring the continuity of any critical functions carried out by the group, where they can easily be separated in a timely manner, or by other means.

• (4) The assessment of group resolvability shall be taken into consideration by the resolution colleges referred to in Regulation 152.

• (5) For the purposes of this assessment of group resolvability referred to in paragraph (1), the resolution authority shall, as a minimum, examine the matters specified in Part 3 of the Schedule.

• (6) The resolution authority shall carry out the assessment of group resolvability under this Regulation at the same time as and for the purposes of preparing and updating the group resolution plan in accordance with Regulation 21 and in making the assessment, the resolution authority shall comply with the decision-making procedure set out in Reglations 22 to 24.

• (7) Where the resolution authority, as group-level resolution authority, assesses that a group is not resolvable, the resolution authority shall promptly notify the European Banking Authority in writing.

Powers to address or remove impediments to resolvability.

• (a) the institution concerned;

• (b) the competent authority;

• (c) Union resolution authorities of jurisdictions in which any significant branches of the institution are located.

• (2) Within 4 months of the date of receipt of a notification under paragraph (1)(a), the institution concerned shall propose to the resolution authority possible measures to address or remove the substantive impediments identified in the notification.

• (3) The resolution authority, after consulting the competent authority, shall assess whether the measures referred to in paragraph (2) would effectively address or remove the substantive impediments.

• (4) Where the resolution authority assesses in accordance with paragraph (3) that the measures proposed by an institution would not effectively reduce or remove the impediments in question, it shall, either directly or indirectly through the competent authority, direct the institution to take such alternative measures that may achieve that objective, and notify in writing those alternative measures to the institution.

• (5) On receipt of a notification under paragraph (4), the institution shall propose, within one month, a plan in writing to implement the alternative measures.

• (6) Before deciding on alternative measures referred to in paragraph (4), the resolution authority, after consulting the competent authority and, where appropriate, the national macro prudential authority, shall consider the potential effect of those measures on—

• (a) the institution concerned,

• (b) on the internal market for financial services, and

• (c) on the financial stability in other Member States and Union as a whole.

• (7) In identifying the alternative measures referred to in paragraph (4), the resolution authority shall—

• (a) demonstrate how the measures proposed by the institution under paragraph (2) would not be sufficient to remove the impediments to resolvability,

• (b) take into account—

• (i) any threat to financial stability posed by those impediments to resolvability, and

• (ii) the effect that the alternative measures proposed would have on the business of the institution, its stability and its ability to contribute to the economy,

and

• (c) demonstrate how the the alternative measures proposed would be proportionate in removing the impediments to resolvability.

• (8) Any determination under paragraph (1) or direction under paragraph (4) shall be supported by reasons for the determination or direction, as the case may be, and, in the case of a direction under paragraph (4), shall indicate how the decision complies with the requirement for proportionate application set out in paragraph (7).

• (9) The obligations for the resolution authority to prepare resolution plans and reach joint decisions on group resolution plans shall be suspended upon a notification referred to in paragraph (1) until either—

• (a) the measures proposed by the institution pursuant to paragraph (2) are accepted by the resolution authority, or

• (b) the resolution authority directs pursuant to paragraph (4) the institution to take alternative measures.

• (10) For the purposes of paragraph (4), the resolution authority may direct the institution to take one or more of the following measures:

• (a) revise any intra-group financing agreement or review the absence thereof;

• (b) put in place service agreements, whether with other group entities or third parties, to cover the provision of critical functions;

• (c) limit its maximum individual or aggregate exposures;

• (d) provide additional information relevant for resolution purposes, including through regular reporting requirements;

• (e) divest specific assets;

• (f) prevent, limit or cease specific existing or proposed activities;

• (g) restrict or cease the development of new or existing business lines or sale of new or existing products;

• (h) make changes to legal or operational structures of the institution or any group entity, either directly or indirectly under its control, in order to reduce complexity and ensure that critical functions can be legally and operationally separated from other functions through the application of the resolution tools;

• (i) establish a parent financial holding company in a Member State or a Union parent financial holding company;

• (j) issue eligible liabilities to meet the requirements of Regulation 81;

• (k) take other steps to meet the minimum requirement for own funds and eligible liabilities under Regulation 81, including in particular to attempt to renegotiate any eligible liability, additional Tier 1 instrument or Tier 2 instrument it has issued, with a view to ensuring that any decision of the resolution authority to write-down or convert that liability or instrument would be effected under the law of the jurisdiction governing that liability or instrument;

• (l) where an institution is the subsidiary of a mixed-activity holding company, require the mixed-activity holding company to set up a separate financial holding company to control the institution where this is necessary to facilitate the resolution of the institution and to avoid resolution action adversely affecting the non-financial part of the group.

• (11) A direction under paragraph (10)(i) may also be issued to a parent undertaking of the institution concerned.

• (12) A direction under pargaraph (10)(j) or (k) may also be issued to an entity referred to in Regulation 2(1)(b) to (i).

• (13) A direction under paragraph (4), or an assessment under paragraph (3), by the resolution authority is an appealable decision for the purposes of Part VIIA of the Act of 1942.

Powers to address or remove impediments to resolvability: group treatment.

• (2) Before considering the assessment of resolvability, the resolution authority and the relevant Union resolution authorities shall consult the supervisory college and the Union resolution authorities of any jurisdictions in which significant branches are located insofar as is relevant to the significant branch.

• (3) Where the resolution authority is the group-level resolution authority, it shall, subject to paragraphs (4) and (6), prepare a report analysing the substantive impediments to the effective application of the resolution tools and the exercise of the resolution powers in relation to the group.

• (4) The report referred to in paragraph (3) shall, after considering the impact on the group’s business model, recommend any proportionate and targeted measures that, in the resolution authority’s opinion, are necessary or appropriate to remove those impediments.

• (5) Any joint decision or decision taken by a Union resolution authority in the absence of a joint decision under this Regulation shall be recognised as conclusive and applied by the resolution authority.

• (6) The resolution authority shall prepare the report referred to in paragraph (3) in cooperation with the competent authority and the European Banking Authority in accordance with Article 25(1) of Regulation (EU) No 1093/2010, after consulting the Union competent authorities concerned.

• (7) The resolution authority shall transmit the report referred to in paragraph (3) to the following:

• (a) the parent undertaking of the group concerned;

• (b) the Union resolution authorities of subsidiaries, which will provide it to the subsidiaries under their remit;

• (c) the Union resolution authorities of any jurisdictions in which significant branches are located.

• (8) Where the resolution authority is the resolution authority of a subsidiary for the purposes of the Bank Recovery and Resolution Directive, and a group-level resolution authority submits a report to the resolution authority in accordance with Article 18(2) of the Bank Recovery and Resolution Directive, the resolution authority shall transmit that report to the subsidiary.

• (9) Within 4 months of the date of receipt of the report referred to in paragraph (3), the parent undertaking may—

• (a) submit observations, and

• (b) propose alternative measures to remedy the impediments identified in the report,

to the resolution authority.

• (10) The resolution authority shall communicate any measure proposed by the parent undertaking under paragraph (9)(b) to the following:

• (a) the competent authority;

• (b) the European Banking Authority;

• (c) the Union resolution authorities of subsidiaries of the group;

• (d) the Union resolution authorities of any jurisdictions in which significant branches are located insofar as is relevant to the significant branch.

• (11) The resolution authority shall endeavour to reach a joint decision with the Union resolution authorities of the subsidiaries within the resolution college regarding the identification of the material impediments and, if necessary, the assessment of the measures proposed by the parent undertaking and the measures required by the authorities to address or remove the impediments, which shall take into account the potential impact of the measures in all the Member States where the group operates.

• (12) Before attempting to reach a joint decision under paragraph (11), the resolution authority and the Union resolution authorities shall consult the following:

• (a) the consolidating supervisor;

• (b) the Union competent authorities of subsidiaries;

• (c) the Union resolution authorities of any jurisdictions in which significant branches are located insofar as is relevant to the significant branch.

• (13) The resolution authority shall endeavour to reach the joint decision referred to in paragraph (11) within 4 months of the submission of any observations by the parent undertaking, under paragraph (9), or at the expiry of the four-month period referred to in that paragraph (9).

• (14) Where a joint decision referred to in paragraph (11) is reached, the resolution authority shall provide the decision and reasons for the decision, in writing, to the parent undertaking.

• (15) The resolution authority, whether in its role as—

• (a) a group-level resolution authority, or

• (b) a resolution authority for a subsidiary for the purposes of the Bank Recovery and Resolution Directive,

may request the European Banking Authority to assist in reaching a joint decision in accordance with Article 31(c) of Regulation (EU) No 1093/2010 or, where the joint decision concerns any measure referred to in subparagraphs (h), (i) and (l) of Regulation 28(10), under Article 19 of that Regulation.

• (16) The resolution authority shall not refer a matter to the European Banking Authority, under paragraph (14), after the end of the four-month period or after a joint decision has been reached.

• (17) Where the resolution authority has not reached a joint decision with the relevant Union resolution authorities of subsidiaries, it shall make its own decision on any appropriate measures to be taken in under Regulation 28(4) at the group level.

• (18) The resolution authority’s decision, under paragraph (17)—

• (a) shall be fully reasoned and shall take into account the views and reservations of the relevant Union resolution authorities, and

• (b) shall be provided by the resolution authority along with the reasons for the decision to the parent undertaking.

• (19) Where a Union resolution authority or the resolution authority, in its capacity as resolution authority for the purposes of the Bank Recovery and Resolution Directive, of a subsidiary has referred a direction to require the group to take any measure, referred to in subparagraphs (h), (i) and (l) of Regulation 28(10), to the European Banking Authority at the end of the four-month period referred to in paragraph (13) the resolution authority shall defer its decision under paragraph (17) and await any decision that that other authority may take in accordance with Article 19(3) of Regulation (EU) No 1093/2010.

• (20) Where a matter is referred to the European Banking Authority under paragraph (19), the resolution authority shall take its decision in accordance with any decision of that other authority and the four-month period referred to in paragraph (13) shall be deemed to be the conciliation period within the meaning of Regulation (EU) No 1093/2010.

• (21) Where the European Banking Authority has not made a decision within one month after referral to it under paragraph (15), the decision of the resolution authority as group-level resolution authority shall apply.

• (22) Where the resolution authority is the resolution authority of a subsidiary for the purposes of the Bank Recovery and Resolution Directive, it shall endeavour to reach a joint decision with the Union resolution authorities within the resolution college regarding the identification of material impediments to the resolvability of the group and if necessary the assessment of measures proposed by the parent undertaking and any measures required by the resolution authorities to address or remove those impediments.

• (23) Where the resolution authority has not reached a joint decision with the relevant Union resolution authorities, it shall make its own decision on appropriate measures to address or remove impediments to resolvability to be taken at an individual level by any subsidiaries in the State in accordance with Regulation 28(4).

• (24) The resolution authority’s decision, under paragraph (23)—

• (a) shall be fully reasoned and shall take into account the views and reservations of the Union resolution authorities, and

• (b) shall be provided by the resolution authority along with the reasons for the decision to the subsidiary and to the group-level resolution authority.

• (25) Where a Union resolution authority has referred a direction to require the group to take any measure referred to in Regulation 28(10)(h), (i) and (l) to the European Banking Authority at the end of the four-month period, the resolution authority shall defer its decision under paragraph (23) and await any decision that that other authority may take in accordance with Article 19(3) of Regulation (EU) No 1093/2010.

• (26) Where a matter is referred to the European Banking Authority under paragraph (25), the resolution authority shall take its decision in conformity with the decision of that other authority and the four-month period shall be deemed to be the conciliation period within the meaning of Regulation (EU) No 1093/2010.

• (27) Where the European Banking Authority has not made a decision within one month of a decision being referred to it under paragraph (25), the decision of the resolution authority in relation to the subsidiary shall apply.

• (28) A decision by the resolution authority under paragraph (17) or (23) is an appealable decision for the purposes of Part VIIA of the Act of 1942.

Chapter 3 Intra-group financial support

Application of group financial support agreement.

Group financial support agreement.

• (a) a parent institution;

• (b) a Union parent institution;

• (c) a subsidiary of a group;

• (d) an entity referred to in Regulation 2(1)(c) to (i);

• (e) a subsidiary, which is authorised in the State, of an entity referred to in subparagraph (d), where that subsidiary is an institution or financial institution covered by the consolidated supervision of a parent undertaking in the Union.

• (2) An intra-group financial support agreement shall not be a prerequisite for an entity referred to in paragraph (1) to operate in the State.

• (3) Notwithstanding the absence of a group financial support agreement, a group entity may provide financial support to another group entity that experiences financial difficulties, on a case-by-case basis and in accordance with group policies, provided that such support does not represent a risk for the whole group.

• (4) Subject to paragraph (5), nothing in national law (including under any enactment or rule of law) shall prevent intra-group financial support transactions that are undertaken in accordance with this Chapter.

• (5) Nothing in this Chapter shall operate to prevent the competent authority from—

• (a) imposing limitations on intra group transactions in the exercise of options provided for in the Union Capital Requirements Regulation or the Capital Requirements Regulations, or

• (b) requiring the separation of parts of a group or activities carried on within a group for reasons of financial stability.

• (6) A group financial support agreement may cover one or more subsidiaries of a group and may provide for financial support—

• (a) from a parent undertaking to subsidiaries,

• (b) from subsidiaries to a parent undertaking,

• (c) between subsidiaries of a group that are party to the agreement, or

• (d) between any combination of the entities referred to in subparagraphs (a) to (c).

• (7) A group financial support agreement may provide for financial support in the form of loans, guarantees, the provision of assets for use as collateral, or any combination of those forms of financial support, in one or more transactions, including between the beneficiary of the support and a third party.

• (8) Where a group entity agrees, under a group financial support agreement, that it will provide financial support to another group entity, the agreement may include a reciprocal agreement by the group entity receiving the support that it will provide financial support to the group entity providing the support.

• (9) A group financial support agreement shall specify the principles for the calculation of the consideration to be paid for any transaction made under it.

• (10) The principles referred to in paragraph (9) shall include a requirement that the consideration shall be set at the time of the provision of financial support.

• (11) A group financial support agreement, including the principles referred to in paragraph (9), shall comply with the following:

• (a) each party must be acting freely in entering into the agreement;

• (b) in entering into the agreement and in determining the consideration for the provision of financial support, each party must be acting in its own best interests which may take account of any direct or any indirect benefit that may accrue to a party as a result of provision of the financial support;

• (c) each party providing financial support must have full disclosure of relevant information from any party receiving financial support before the determination of the consideration for the provision of financial support and before any decision to provide financial support;

• (d) the consideration for the provision of financial support may take account of information in the possession of the party providing financial support based on it being in the same group as the party receiving financial support and which is not available to the market;

• (e) the principles for the calculation of the consideration for the provision of financial support need not take account of any anticipated temporary impact on market prices arising from events external to the group.

• (12) A group financial support agreement may be concluded only if, at the time the proposed agreement is made, in the respective opinions of the competent authority and of the Union competent authorities of other parties to the agreement, none of the parties meets the conditions for early intervention.

• (13) Only parties to a group financial support agreement may exercise any right, claim or action arising from such an agreement.

Review of proposed agreement by competent authority and mediation.

• (2) The application referred to in paragraph (1) shall contain the text of the proposed agreement and identify the group entities that it is proposed will be parties and the competent authority shall forward without delay the application to the Union competent authorities of each subsidiary that proposes to be a party to the agreement, with a view to reaching a joint decision on the authorisation of the agreement.

• (3) The competent authority, whether in its role as consolidating supervisor or as the supervisor of a subsidiary, shall endeavour to reach a joint decision on whether to authorise the group financial support agreement with the Union competent authorities of the other parties to the proposed agreement within 4 months of the date of receipt of the application by the consolidating supervisor.

• (4) In making any decision under this Regulation, the competent authority shall have regard to the following:

• (a) the potential impact, including any fiscal consequences, of the agreement in all of the Member States where the group operates;

• (b) whether the terms of the proposed agreement are consistent with the conditions for financial support set out in Regulation 35.

• (5) The competent authority shall, in accordance with the procedure set out in this Regulation, authorise the agreement if the terms of the proposed agreement are consistent with the conditions for financial support set out in Regulation 35.

• (6) The competent authority may, in accordance with the procedure set out in this Regulation, prohibit the conclusion of the proposed agreement if it is considered to be inconsistent with the conditions for financial support set out in Regulation 35.

• (7) Where the competent authority is the consolidating supervisor, it shall provide the joint decision and reasons for the decision to the applicant.

• (8) The competent authority, whether in its role as consolidating supervisor or as the supervisor of a subsidiary, may request the European Banking Authority to assist in reaching a joint decision in accordance with Article 31 of Regulation (EU) No 1093/2010 but the competent authority shall not refer the matter to the European Banking Authority after—

• (a) the end of the four-month period referred to in paragraph (3), or

• (b) a joint decision has been reached.

• (9) Where the competent authority is consolidating supervisor, and a joint decision has not been reached within 4 months, the competent authority shall make its own decision on the application for authorisation.

• (10) The decision, under paragraph (9), shall be fully reasoned and shall take into account the views and reservations expressed by the Union competent authorities during the four-month period.

• (11) The competent authority shall notify its decision, under paragraph (9), to the applicant and the Union competent authorities concerned in writing.

• (12) Where, at the end of the four-month period referred to in paragraph (3), any Union competent authority or the competent authority has referred the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the competent authority shall defer its decision and await any decision that that other authority may take in accordance with Article 19(3) of that Regulation.

• (13) Where the matter has been referred to the European Banking Authority—

• (a) the competent authority shall take its decision in accordance with any decision of that other authority and the four-month period referred to in paragraph (3) shall be deemed to be the conciliation period within the meaning of that Regulation, or

• (b) where that other authority has not made a decision within one month, the decision of the competent authority as consolidating supervisor shall apply.

Approval of proposed agreement by shareholders.

• (2) A group financial support agreement shall be valid in respect of a group entity only where its shareholders have authorised the management body of that group entity to make a decision that the group entity may provide or receive financial support in accordance with the terms of the agreement and in accordance with the conditions set out in Articles 19 to 26 of the Bank Recovery and Resolution Directive, and that shareholder authorisation has not been revoked.

• (3) The management body of each entity that is party to a group financial support agreement shall report annually to shareholders on the performance of the agreement and on the implementation of any decision taken pursuant to the agreement.

Transmission of group financial support agreements to resolution authority.

Conditions for group financial support.

• (a) there is a reasonable prospect that the support would significantly redress the financial difficulties of the group entity receiving the support,

• (b) the provision of financial support has the objective of preserving or restoring the financial stability of the group as a whole or any of the entities of the group,

• (c) the provision of financial support is in the interests of the group entity providing the support,

• (d) the financial support is provided on terms, including consideration, which comply with Regulation 31(9) to (11),

• (e) there is a reasonable prospect, on the basis of the information available to the management body of the group entity providing financial support at the time when the decision to grant financial support is taken, that the consideration for the support will be paid and, if the support is given in the form of a loan, that the loan will be reimbursed, by the group entity receiving the support,

• (f) where the support is given in the form of a guarantee or any form of security, the same condition shall apply to the liability arising for the recipient if the guarantee or the security is enforced,

• (g) the provision of the financial support would not jeopardise the liquidity or solvency of the group entity providing the support,

• (h) the provision of the financial support would not create a threat to financial stability, in particular in the State,

• (i) the group entity providing the support—

• (i) complies at the time the support is provided with the requirements, relating to capital or liquidity, of the Capital Requirements Directive or the Capital Requirements Regulations, as applicable, and

• (ii) complies at the time the support is provided with any requirements imposed pursuant to Article 104(2) of the Capital Requirements Directive,

and the provision of the financial support would not cause that group entity to infringe the requirements referred to in clauses (i) and (ii), unless such an infringement is authorised in writing by the competent authority,

• (j) the group entity providing the support complies, at the time when the support is provided, with the requirements relating to large exposures set out in—

• (i) the Union Capital Requirements Regulation, or

• (ii) the Capital Requirements Directive or the Capital Requirements Regulations, as applicable,

and the provision of the financial support would not cause that group entity to infringe those requirements, unless such an infringement is authorised in writing by the competent authority, and

• (k) the provision of the financial support would not undermine the resolvability of the group entity providing the support.

Decision to provide financial support.

• (2) The decision referred to in paragraph (1) shall—

• (a) be reasoned and indicate the objective of the proposed financial support, and

• (b) indicate how the provision of the financial support complies with the conditions set out in Regulation 35.

• (3) The management body of the group entity providing financial support in accordance with a group financial support agreement shall transmit that decision to the following in writing:

• (a) the competent authority;

• (b) the consolidating supervisor, where it is not the competent authority;

• (c) the Union competent authority of the group entity receiving the financial support, where it is not the consolidating supervisor;

• (d) the European Banking Authority.

• (4) Where the competent authority is the consolidating supervisor and is notified of a decision of a group entity, whether authorised in the State or in another Member State, to provide financial support, the competent authority shall immediately inform other members of the supervisory college and the members of the resolution college in writing.

• (5) Any decision to accept group financial support in accordance with a group financial support agreement shall be taken by the management body of the group entity receiving financial support.

Right of opposition of competent authorities.

• (a) the competent authority;

• (b) the consolidating supervisor, where it is not the competent authority;

• (c) the Union competent authority of the group entity receiving the financial support, where it is not the consolidating supervisor;

• (d) the European Banking Authority.

• (2) The notification referred to in paragraph (1) shall include the reasoned decision of the management body in accordance with Regulation 36 and details of the proposed financial support including a copy of the group financial support agreement.

• (3) Where the competent authority is the supervisor of the group entity providing support, it may, within 5 business days of receipt of a complete notification—

• (a) either agree to the provision of financial support, or

• (b) prohibit or restrict it if it assesses that the conditions for group financial support set out in Regulation 35 have not been met.

• (4) A decision of the competent authority under paragraph (3) to prohibit or restrict the financial support shall be reasoned.

• (5) The competent authority shall without delay, in writing, notify a decision under paragraph (3) to the following:

• (a) the consolidating supervisor, where this is not the competent authority;

• (b) the Union competent authority of the group entity receiving the support, where it is not the consolidating supervisor;

• (c) the European Banking Authority;