S.I. No. 710/2020 - European Union (Capital Requirements) (Amendment) Regulations 2020

• “(5A) When conducting the review and evaluation, the Bank shall apply the principle of proportionality in accordance with the criteria published in accordance with Regulation 131(1)(c).

• (5B) The Bank may tailor the methodologies for the application of the review and evaluation to take into account institutions with a similar risk profile, including having a similar business model or geographical location of exposures.

• (5C) A tailored methodology referred to in paragraph (5B)—

  • (a) may include risk-oriented benchmarks and quantitative indicators,

  • (b) shall allow for due consideration of the specific risks that each institution may be exposed to, and

  • (c) shall not affect the institution-specific nature of measures imposed in accordance with Regulation 92.

• (5D) Where the Bank uses a tailored methodology referred to in paragraph (5B), it shall notify the EBA.”, and

• (c) by the insertion of the following paragraphs after paragraph (6):

• “(6A) Where a review and evaluation (including the evaluation of the governance arrangements, the business model, or the activities of an institution) gives the Bank reasonable grounds to suspect that, in connection with an institution, money laundering or terrorist financing is being or has been committed or attempted, or there is increased risk thereof, the Bank shall immediately notify the EBA.

• (6B) Where the Bank (following liaison with the authority or body that supervises the institution in accordance with the Directive (EU) 2015/849 and is competent for ensuring compliance with that Directive, in a case in which that authority or body is not the Bank) has reasonable grounds to suspect that, in connection with an institution, there is an increased risk of money laundering or terrorist financing—

  • (a) the Bank (together with the authority or body referred to above, where applicable) shall notify its assessment immediately to the EBA, and

  • (b) the Bank shall take, as appropriate, measures in accordance with these Regulations or other financial services legislation.”.

Amendment of Regulation 86 of Principal Regulations

26.

• (a) in paragraph (1)—

• (i) in subparagraph (i), by the substitution of “concerned.” for “concerned;”, and

• (ii) by the deletion of subparagraph (j),

• (b) in paragraph (6), by the substitution of “non-trading book activities” for “non-trading activities”,

• (c) by the substitution of the following paragraph for paragraph (7):

• “(7) Subject to paragraph (7A), the Bank shall exercise supervisory powers, at a minimum, in the following cases:

  • (a) where an institution’s economic value of equity as referred to in Regulation 72(1) declines by more than 15 per cent of its Tier 1 capital as a result of a sudden and unexpected change in interest rates as set out in any of the six supervisory shock scenarios applied to interest rates;

  • (b) where an institution’s net interest income, as referred to in Regulation 72(1), experiences a large decline as a result of a sudden and unexpected change in interest rates as set out in any of the two supervisory shock scenarios applied to interest rates.”, and

• (d) by the insertion of the following paragraphs after paragraph (7) (as substituted by the preceding subparagraph):

• “(7A) The Bank shall not be obliged to exercise supervisory powers where it considers, based on the review and evaluation performed by the Bank pursuant to Regulation 85, that—

  • (a) the institution’s management of interest rate risk arising from non-trading book activities is adequate, and

  • (b) the institution is not excessively exposed to interest rate risk arising from non-trading book activities.

• (7B) For the purposes of paragraphs (7) and (7A), ‘supervisory powers’ means—

  • (a) the powers referred to in Regulation 92(1) and (2), or

  • (b) the power to specify modelling and parametric assumptions, other than those identified by the EBA pursuant to point (b) of paragraph 5a of Article 98 of the Capital Requirements Directive, to be reflected by institutions in their calculation of the economic value of equity under Regulation 72(1).”.

Amendment of Regulation 87 of Principal Regulations

27.

Amendment of Regulation 90 of Principal Regulations

28.

• “(1) The Bank shall require an institution, financial holding company or mixed financial holding company to take the necessary measures at an early stage to address relevant problems in the following circumstances:

  • (a) the institution, financial holding company or mixed financial holding company, as the case may be, does not meet the requirements of these Regulations or of the Capital Requirements Regulation;

  • (b) the Bank has evidence that the institution, financial holding company or mixed financial holding company, as the case may be, is likely to breach the requirements of these Regulations, or of the Capital Requirements Regulation, within the subsequent 12 months.”.

Amendment of Regulation 91 of Principal Regulations

29.

Amendment of Regulation 92 of Principal Regulations

30.

• (a) by the substitution of the following paragraph for paragraph (1):

• “(1) For the purposes of—

  • (a) Regulation 85,

  • (b) Regulation 86(5), (6), (7) and (7A),

  • (c) Regulation 89(3) to (5),

  • (d) Regulation 90, and

  • (e) the application of the Capital Requirements Regulation,

  the Bank shall have, without limitation to the Bank’s powers under other financial services legislation, the powers specified in paragraph (2).”,

• (b) in paragraph (2)—

• (i) by the substitution of the following for subparagraph (a):

• “(a) to require institutions to have additional own funds in excess of the requirements set out in the Capital Requirements Regulation, under the conditions set out in Regulation 92A;”,

• (ii) in subparagraph (b), by the substitution of “Regulations 60 and 61” for “Regulations 60 to 62”,

• (iii) in subparagraph (c), by the substitution of “submit a plan” for “present a plan”,

• (iv) in subparagraph (f), by the substitution of “systems of institutions, including outsourced activities;” for “systems of institutions;”, and

• (v) in subparagraph (j), by the substitution of “reporting on own funds, liquidity and leverage;” for “reporting on capital and liquidity positions;”,

• (c) by the deletion of paragraphs (3) and (4), and

• (d) by the insertion of the following paragraphs after paragraph (5):

• “(6) The Bank may only impose additional or more frequent reporting requirements on institutions under paragraph (2)(j) where—

  • (a) the relevant requirement is appropriate and proportionate with regard to the purpose for which the information is required, and

  • (b) the information requested is not duplicative.

• (7) Where the power under paragraph (2)(j) is being exercised for the purposes of Regulations 85 to 90, any additional information that may be required from institutions shall be deemed to be duplicative where the same or substantially the same information has already been otherwise reported to the Bank or may be produced by the Bank.

• (8) The Bank shall not require an institution to report additional information where it has previously received the information in a different format or level of granularity and that different format or granularity does not prevent the Bank from producing information of the same quality and reliability as that which would be produced on the basis of the additional information.”.

Additional own funds requirement

31.

“Additional own funds requirement

92A. (1) The Bank shall impose the additional own funds requirement referred to in Regulation 92(2)(a) where, on the basis of the reviews carried out in accordance with Regulations 85 and 89, it determines in respect of an individual institution that—

• (a) the institution is exposed to risks or elements of risk that are not covered or not sufficiently covered by the own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation,

• (b) the institution does not meet the requirements set out in Regulation 60 and 61 or in Article 393 of the Capital Requirements Regulation and it is unlikely that other supervisory measures would be sufficient to ensure that those requirements can be met within an appropriate timeframe,

• (c) the adjustments referred to in Regulation 86(5) are deemed to be insufficient to enable the institution to sell or hedge out its positions within a short period without incurring material losses under normal market conditions,

• (d) the evaluation carried out in accordance with paragraphs (3) to (5) of Regulation 89 reveals that the non-compliance with the requirements for the application of the permitted approach will likely lead to inadequate own funds requirements,

• (e) the institution repeatedly fails to establish or maintain an adequate level of additional own funds to cover the guidance communicated in accordance with Regulation 92B(4), or

• (f) there are other institution-specific situations deemed by the Bank to raise material supervisory concerns.

• (2) The Bank shall only impose the additional own funds requirement referred to in Regulation 92(2)(a) to cover the risks incurred by individual institutions due to their activities, including those reflecting the impact of certain economic and market developments on the risk profile of an individual institution.

• (3) For the purposes of paragraph (1)(a), risks or elements of risk shall only be considered as not covered or not sufficiently covered by the own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402 where the amounts, types and distribution of capital considered adequate by the Bank, taking into account the supervisory review of the assessment carried out by institutions in accordance with Regulation 60(1), are higher than the own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402.

• (4) For the purposes of paragraph (3), the Bank shall assess, taking into account the risk profile of each individual institution, the risks to which the institution is exposed, including—

  • (a) institution-specific risks or elements of such risks that are explicitly excluded from or not explicitly addressed by the own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402, and

  • (b) institution-specific risks or elements of such risks likely to be underestimated despite compliance with the applicable requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402.

• (5) For the purposes of paragraph (4)(b), to the extent that risks or elements of risk are subject to transitional arrangements or grandfathering provisions laid down in these Regulations or in the Capital Requirements Regulation, they shall not be considered risks or elements of such risks likely to be underestimated despite compliance with the applicable requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402.

• (6) For the purposes of paragraph (3), the capital considered adequate shall cover all risks or elements of risks identified as material pursuant to the assessment laid down in paragraph (4) that are not covered or not sufficiently covered by the own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402.

• (7) Interest rate risk arising from non-trading book positions may be considered material at least in the cases referred to in Regulation 86(7), unless the Bank, in performing the review and evaluation, comes to the conclusion that the institution’s management of interest rate risk arising from non-trading book activities is adequate and that the institution is not excessively exposed to interest rate risk arising from non-trading book activities.

• (8) Where additional own funds are required to address risks, other than the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, the Bank shall determine the level of the additional own funds required under paragraph (1)(a) as the difference between the capital considered adequate pursuant to paragraph (3) and the relevant own funds requirements set out in Parts Three and Four of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402.

• (9) Where additional own funds are required to address the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, the Bank shall determine the level of the additional own funds required under paragraph (1)(a) as the difference between the capital considered adequate pursuant to paragraph (3) and the relevant own funds requirements set out in Parts Three and Seven of the Capital Requirements Regulation.

• (10) Subject to paragraph (12), an institution shall meet the additional own funds requirement, imposed by the Bank under Regulation 92(2)(a) to address risks other than the risk of excessive leverage, with own funds that satisfy the following conditions:

  • (a) at least three quarters of the additional own funds requirement shall be met with Tier 1 capital;

  • (b) at least three quarters of the Tier 1 capital referred to in subparagraph (a) shall be composed of Common Equity Tier 1 capital.

• (11) Subject to paragraph (12), an institution shall meet the additional own funds requirement, imposed by the Bank under Regulation 92(2)(a) to address the risk of excessive leverage, with Tier 1 capital.

• (12) The Bank may require an institution to meet its additional own funds requirement with a higher portion of Tier 1 capital or Common Equity Tier 1 capital than that required under paragraph (10), where necessary, and having regard to the specific circumstances of the institution.

• (13) Own funds that are used to meet the additional own funds requirement referred to in Regulation 92(2)(a) imposed by the Bank to address risks other than the risk of excessive leverage shall not be used to meet any of the following:

  • (a) own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation;

  • (b) the combined buffer requirement;

  • (c) the guidance on additional own funds referred to in Regulation 92B(4) where that guidance addresses risks other than the risk of excessive leverage.

• (14) Own funds that are used to meet the additional own funds requirement referred to in Regulation 92(2)(a) imposed by the Bank to address the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation shall not be used to meet any of the following:

  • (a) the own funds requirement set out in point (d) of Article 92(1) of the Capital Requirements Regulation;

  • (b) the leverage ratio buffer requirement referred to in Article 92(1a) of the Capital Requirements Regulation;

  • (c) the guidance on additional own funds referred to in Regulation 92B(4), where that guidance addresses risks of excessive leverage.

• (15) The Bank shall duly justify in writing to each institution the decision to impose an additional own funds requirement under Regulation 92(2)(a), at a minimum by giving a clear account of the full assessment of the elements referred to in paragraphs (1) to (13).

• (16) The justification referred to in paragraph (15) shall include, in the case set out in paragraph (1)(e), a specific statement of the reasons for which the imposition of guidance on additional own funds is no longer considered sufficient.

Guidance on additional own funds

92B. (1) Pursuant to the strategies and processes referred to in Regulation 60, institutions shall set their internal capital at an adequate level of own funds that is sufficient—

- (*a*) to cover all the risks that an institution is exposed to, and

- (*b*) to ensure that the institution’s own funds can absorb potential losses resulting from stress scenarios, including those identified under the supervisory stress test referred to in Regulation 88.

• (2) The Bank shall regularly review the level of the internal capital set by each institution in accordance with paragraph (1) as part of the reviews and evaluations performed in accordance with Regulations 85 and 89, including the results of the stress tests referred to in Regulation 88.

• (3) The Bank shall, pursuant to the review referred to in paragraph (2), determine for each institution the overall level of own funds it considers appropriate.

• (4) The Bank shall communicate its guidance on additional own funds to institutions.

• (5) The guidance on additional own funds referred to in paragraph (4) shall be the own funds exceeding the relevant amount of own funds required pursuant to Parts Three, Four and Seven of the Capital Requirements Regulation, Chapter 2 of Regulation (EU) 2017/2402, Regulation 92(2)(a) and Regulation 115(g) or pursuant to Article 92(1a) of the Capital Requirements Regulation, as relevant, which are needed to reach the overall level of own funds considered appropriate by the Bank pursuant to paragraph (2).

• (6) The Bank’s guidance on additional own funds pursuant to paragraph (4) shall be institution-specific.

• (7) The guidance referred to in paragraph (4) may cover risks addressed by the additional own funds requirement imposed pursuant to Regulation 92(2)(a) only to the extent that it covers aspects of those risks that are not already covered under that requirement.

• (8) Own funds that are used to meet the guidance on additional own funds communicated in accordance with paragraph (4) to address risks other than the risk of excessive leverage shall not be used to meet any of the following:

  • (a) the own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation;

  • (b) the requirement laid down in Regulation 92A imposed by the Bank to address risks other than the risk of excessive leverage and the combined buffer requirement.

• (9) Own funds that are used to meet the guidance on additional own funds communicated in accordance with paragraph (4) to address the risk of excessive leverage shall not be used to meet—

  • (a) the own funds requirement set out in point (d) of Article 92(1) of the Capital Requirements Regulation,

  • (b) the requirement laid down in Regulation 92A imposed by the Bank to address the risk of excessive leverage, or

  • (c) the leverage ratio buffer requirement referred to in Article 92(1a) of the Capital Requirements Regulation.

• (10) Failure to meet the guidance referred to in paragraph (4) shall not trigger the restrictions referred to in Regulation 129 or 129B where an institution meets—

  • (a) the relevant own funds requirements set out in Parts Three, Four and Seven of the Capital Requirements Regulation and in Chapter 2 of Regulation (EU) 2017/2402,

  • (b) the relevant additional own funds requirement referred to in Regulation 92(2)(a), and

  • (c) where relevant, the combined buffer requirement or the leverage ratio buffer requirement referred to in Article 92(1a) of the Capital Requirements Regulation.

  Cooperation with resolution authorities

  92C. The Bank shall notify the relevant resolution authorities of—

  • (a) the additional own funds requirement imposed on institutions pursuant to Regulation 92(2)(a), and

  • (b) any guidance on additional own funds communicated to institutions in accordance with Regulation 92B(4).”.

Amendment of Regulation 93 of Principal Regulations

32.

• (a) in subparagraph (c), by the substitution of “with Regulation 85.” for “with Regulation 85;”, and

• (b) by the deletion of subparagraph (d).

Amendment of Regulation 96 of Principal Regulations

33.

Amendment of Regulation 97 of Principal Regulations

34.

• (a) in paragraph (2), by the substitution of “ensure that the arrangements” for “ensure that their arrangements”,

• (b) in paragraph (3), by the substitution of “in their subsidiaries, including those established in offshore financial centres,” for “in their subsidiaries,”,

• (c) by the insertion of the following paragraph after paragraph (3):

• “(3A) Subsidiary undertakings that are not themselves subject to this Regulation shall comply with their sector-specific requirements on an individual basis.”,

• (d) by the substitution of the following paragraph for paragraph (5):

• “(5) The obligations contained in Regulations 61 to 84 concerning subsidiary undertakings, that are not themselves subject to these Regulations, shall not apply where the EU parent institution can demonstrate to the Bank that the application of those Regulations is unlawful under the laws of the third country where the subsidiary is established.”, and

• (e) by the insertion of the following paragraphs after paragraph (5):

• “(6) Subject to paragraph (7), the remuneration requirements specified in Regulations 80, 82 and 83 shall not apply on a consolidated basis to either of the following:

  • (a) subsidiary undertakings established in the European Union, where they are subject to specific remuneration requirements in accordance with European Union legal acts other than the Capital Requirements Directive;

  • (b) subsidiary undertakings established in a third country where they would be subject to specific remuneration requirements in accordance with other Union legal acts if they were established in the Union.

• (7) Regulations 80, 82 and 83 apply to members of staff of subsidiaries that are not subject to these Regulations on an individual basis where—

  • (a) the subsidiary is either an asset management company, or an undertaking that provides the investment services and activities listed in paragraphs 2, 3, 4, 6 and 7 of Part 1 of Schedule 1 to the European Union (Markets in Financial Instruments) Regulations 2017 ( S.I. No. 375 of 2017 ), and

  • (b) those members of staff have been mandated to perform professional activities that have a direct material impact on the risk profile or the business of the institutions within the group.”.

Amendment of Regulation 99 of Principal Regulations

35.

“Determination of the consolidating supervisor

1. (1) Where—

2. (a) the Bank supervises a parent credit institution in a Member State or an EU parent credit institution on an individual basis, and

3. (b) that parent credit institution in a Member State or that EU parent credit institution, as the case may be, is a parent undertaking,

the Bank shall be the consolidating supervisor of the group of which the parent undertaking is the parent undertaking.

• (2) Where—

  • (a) the Bank supervises a parent investment firm in a Member State or an EU parent investment firm on an individual basis,

  • (b) that parent investment firm in a Member State or that EU parent investment firm, as the case may be, is a parent undertaking, and

  • (c) none of the subsidiaries of the parent undertaking is a credit institution,

  the Bank shall be the consolidating supervisor of the group of which the parent undertaking is the parent undertaking.

• (3) Subject to paragraph (7), where—

  • (a) a parent undertaking is a parent investment firm in a Member State or an EU parent investment firm,

  • (b) one or more of the subsidiaries of the parent undertaking is a credit institution, and

  • (c) either—

    • (i) only one of the subsidiaries is a credit institution and the Bank is the competent authority for that credit institution, or

    • (ii) more than one of the subsidiaries is a credit institution and the Bank is the competent authority for the credit institution with the largest balance sheet total,

    the Bank shall be the consolidating supervisor of the group of which the parent undertaking is the parent undertaking.

• (4) Where—

  • (a) the parent undertaking of an institution is—

    • (i) a parent financial holding company in a Member State,

    • (ii) a parent mixed financial holding company in a Member State,

    • (iii) an EU parent financial holding company, or

    • (iv) an EU parent mixed financial holding company, and

  • (b) the Bank supervises the institution on an individual basis,

  the Bank shall be the consolidating supervisor of the group of which the parent undertaking is the parent undertaking.

• (5) Where —

  • (a) two or more institutions authorised in the European Union have the same parent financial holding company in a Member State, parent mixed financial holding company in a Member State, EU parent financial holding company or EU parent mixed financial holding company, and

  • (b)

    • (i) in a case in which there is only one credit institution within the group, the Bank is the competent authority of the credit institution,

    • (ii) subject to paragraph (7), in a case in which there are several credit institutions within the group, the Bank is the competent authority of the credit institution with the largest balance sheet total, or

    • (iii) subject to paragraph (8), in a case in which the group does not include any credit institution, the Bank is the competent authority of the investment firm within the group with the largest balance sheet total,

    the Bank shall be the consolidating supervisor of the group of which the institutions referred to in subparagraph (a) are members.

• (6) Subject to paragraph (7), where consolidation is required pursuant to Article 18(3) or (6) of the Capital Requirements Regulation, the Bank shall be the consolidating supervisor of a group where it is—

  • (a) the competent authority of the credit institution in the group with the largest balance sheet total, or

  • (b) in a case in which the group does not include any credit institution, the competent authority of the investment firm with the largest balance sheet total.

• (7) Notwithstanding paragraphs (3), (5)(b)(ii) and (6), where—

  • (a) the Bank supervises on an individual basis more than one credit institution within a group, and

  • (b) the sum of the balance sheet totals of those supervised credit institutions is higher than that of the credit institutions within the group supervised on an individual basis by any other competent authority,

  the Bank shall be the consolidating supervisor for that group.

• (8) Notwithstanding paragraph (5)(b)(iii), where—

  • (a) the Bank supervises on an individual basis more than one investment firm within a group,

  • (b) the aggregate balance sheet total of those investment firms is higher than the aggregate balance sheet total of the investment firms, within that group, supervised by any other competent authority,

  the Bank shall be the consolidating supervisor for that group.

• (9) Paragraphs (1), (2), (3), (5) and (6) shall not apply where the Bank has, by common agreement with other competent authorities—

  • (a) waived the application of those paragraphs on the grounds that their application would be inappropriate, taking into account the institutions concerned and the relative importance of their activities in the relevant Member States, or the need to ensure the continuity of supervision on a consolidated basis by the same competent authority, and

  • (b) appointed a different consolidating supervisor.

• (10) Where the Bank would not be the consolidating supervisor for a group, in accordance with paragraph (1), (2), (3), (5) or (6), the Bank shall be the consolidating supervisor for that group where the Bank has by common agreement with other competent authorities—

  • (a) waived the application of paragraph (1), (2), (3), (5) or (6) on the grounds that their application would be inappropriate, taking into account the institutions concerned and the relative importance of their activities in the relevant Member States, or the need to ensure the continuity of supervision on a consolidated basis by the same competent authority, and

  • (b) the Bank has, pursuant to that agreement, been appointed as the consolidating supervisor.

• (11) Where it is proposed that the application of paragraph (1), (2), (3), (5) or (6) be waived in accordance with paragraph (9) or (10), the EU parent institution, EU parent financial holding company, EU parent mixed financial holding company or the institution with the largest balance sheet total, as the case may be, shall have the right to be heard before the competent authorities take the decision.

• (12) The Bank shall, together with the other competent authorities concerned, notify the European Commission and EBA without delay of any agreement referred to in paragraph (9) or (10).”.

Amendment of Regulation 101 of Principal Regulations

36.

• (a) by the substitution of the following paragraph for paragraph (1):

• “(1) Where, in respect of subsidiaries of an EU parent institution, an EU parent financial holding company or EU parent mixed-financial holding company, the Bank is responsible for supervision as—

  • (a) the consolidating supervisor, or

  • (b) a competent authority,

  the Bank shall—

  - (i) where it is such a consolidating supervisor, make all efforts to reach a joint decision with such competent authorities, or
  
  - (ii) where it is such a competent authority, make all efforts to reach a joint decision with the consolidating supervisor and other such competent authorities, if any,
  
    on the following:
  
      - (I) the application of Regulations 60 and 85 to determine the adequacy of the consolidated level of own funds held by the group of institutions with respect to its financial situation and risk profile and the required level of own funds for the application of Regulation 92(2)(a) to each entity within the group of institutions and on a consolidated basis;
  
      - (II) the measures to address any significant matters and material findings relating to liquidity supervision including relating to the adequacy of the organisation and the treatment of risks, as required pursuant to Regulation 74, and relating to the need for institution-specific liquidity requirements in accordance with Regulation 93;
  
      - (III) any guidance on additional own funds referred to in Regulation 92B(4).”,
  

• (b) by the substitution of the following paragraph for paragraph (2):

• “(2) The joint decisions referred to in paragraph (1) shall be reached—

  • (a) for the purpose of paragraph (1)(I), not later than 4 months after submission by the consolidating supervisor of a report containing the risk assessment of the group of institutions in accordance with Regulations 92A to the other relevant competent authorities,

  • (b) for the purpose of paragraph (1)(II), not later than four months after submission by the consolidating supervisor of a report containing the assessment of the liquidity risk profile of the group of institutions in accordance with Regulations 74 and 93, and

  • (c) for the purpose of paragraph (1)(III), not later than four months after submission by the consolidating supervisor of a report containing the assessment of the liquidity risk profile of the group of institutions in accordance with Regulation 92B.”,

• (c) by the substitution of the following paragraph for paragraph (3):

• “(3) The Bank shall, together with the other competent authorities and, where applicable, the consolidating supervisor, duly consider the risk assessment of subsidiaries performed by the competent authorities in accordance with Regulations 60, 85, 92A and 92B when reaching a joint decision referred to in subparagraph (I), (II) or (III) of paragraph (1).”,

• (d) by the insertion of the following paragraph after paragraph (3):

• “(3A) The joint decisions referred to in subparagraphs (I) and (II) of paragraph (1) shall be set out in documents containing full reasons which shall be provided to the EU parent institution concerned by the consolidating supervisor.”,

• (e) in paragraph (4), by the substitution of “the joint decisions referred to in subparagraphs (I) and (II) of paragraph (1), the Bank, where it is the consolidating supervisor” for “the joint decisions referred to in paragraph (1), the Bank, where it is responsible for supervision on a consolidated basis”,

• (f) in paragraph (5), by the substitution of “a decision on the application of Regulations 60, 74, 85, 92(2)(a), 92B and 93” for “a decision on the application of Regulations 60, 74, 85, 92(2)(a) and 93”,

• (g) in paragraph (8), by the substitution of “The decision on the application of Regulations 60, 74, 85, 92(2)(a), 92B and 93” for “The decision on the application of Regulations 60, 74, 85, 92(2)(a) and 93”,

• (h) in paragraph (13)(b)—

• (a) by the substitution of “a written and fully reasoned request” for “a written and reasoned request”, in each place where it occurs, and

• (b) by the substitution of “update a decision on the application of Regulations 92(2)(a), 92B and 93” for “update a decision on the application of Regulations 92(2)(a) and 93”, in each place where it occurs, and

• (i) in paragraph (14), by the substitution of “in paragraph (13)(b)” for “in paragraph (13)”.

Amendment of Regulation 103 of Principal Regulations

37.

• (a) by the substitution of the following paragraph for paragraph (1):

• “(1) In order to facilitate and establish effective supervision, the Bank shall have written coordination and cooperation arrangements in place—

  • (a) where the Bank is the consolidating supervisor, with the other competent authorities and the parent company competent authority, if any,

  • (b) where the Bank is not the consolidating supervisor, with the consolidating supervisor, the other competent authorities, if any, and the parent company competent authority, if any, and

  • (c) where the Bank is the parent company competent authority, with the consolidating supervisor and the other competent authorities, if any.”, and

• (b) by the insertion of the following paragraph after paragraph (1):

• “(1A) In paragraph (1), ‘parent company competent authority’ means, where the consolidating supervisor is different from the competent authority in the Member State where a financial holding company or mixed financial holding company that has been granted approval in accordance with Article 21a of the Capital Requirements Directive is established, the competent authority of the Member State where the parent undertaking is established.”.

Amendment of Regulation 104 of Principal Regulations

38.

• (a) by the insertion of the following paragraphs after paragraph (1):

• “(1A) The Bank, where it is responsible for supervision on a consolidated basis, shall also establish colleges of supervisors to facilitate the tasks referred to in Regulations 100(1), 102(1) and (2) and 103(1) and (2), where all the cross-border subsidiaries of an EU parent institution, an EU parent financial holding company or an EU parent mixed financial holding company have their head offices in third countries, provided that the third countries’ supervisory authorities are subject to confidentiality requirements that are equivalent to the requirements laid down in Section II of Chapter 1 of Title VII of the Capital Requirements Directive and, where applicable, in Articles 76 and 81 of the Capital Requirements Directive.”, and

• (b) in paragraph (5)—

• (i) in subparagraph (e), by the substitution of “EBA;” for “EBA.”, and

• (ii) by the insertion of the following subparagraph after subparagraph (e)—

• “(f) the competent authority in the Member State where a financial holding company or a mixed financial holding company that has been granted approval in accordance with Article 21a of the Capital Requirements Directive is established.”.

Amendment of Regulation 105 of Principal Regulations

39.

• “(13) Subject to paragraph (14), the Bank, where it is a competent authority, financial intelligence units and authorities entrusted with the public duty of supervising the obliged entities listed in points (1) and (2) of Article 2(1) of Directive (EU) 2015/849 for compliance with that Directive shall—

  • (a) cooperate closely with other competent authorities, and

  • (b) shall provide to and procure from those authorities information relevant for their respective tasks under these Regulations, the Capital Requirements Regulation and under the law of the State giving effect to Directive (EU) 2015/849.

• (14) Paragraph (13)(a) or (b), as the case may be, shall not apply where the cooperation or information exchange concerned would impinge on an on-going inquiry, investigation or proceedings in accordance with the criminal or administrative laws of the Member State where the competent authority, financial intelligence unit or authority entrusted with the public duty of supervising the obliged entities listed in points (1) and (2) of Article 2(1) of Directive (EU) 2015/849, as the case may be, is located.”.

Amendment of Regulation 107 of Principal Regulations

40.

Amendment of Regulation 108 of Principal Regulations

41.

• “(2) Where a mixed-financial holding company is subject to equivalent provisions under these Regulations and the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ), in particular in terms of risk-based supervision, the Bank, where it is responsible for exercising supervision on a consolidated basis, may, in agreement with the group supervisor in the insurance sector, apply to that mixed-financial holding company only the provisions of the Regulations, being either these Regulations or the European Union (Insurance and Reinsurance) Regulations 2015, which relate to the most significant financial sector, as defined in Regulation 4(2) of the European Communities (Financial Conglomerates) Regulations 2004 ( S.I. No. 727 of 2004 ).”.

Amendment of Regulation 113 of Principal Regulations

42.

• “(5) Where, in accordance with Article 111 of the Capital Requirements Directive, the consolidating supervisor of a group with a parent mixed financial holding company is different from the coordinator determined in accordance with Article 10 of Directive 2002/87/EC, the Bank, where it is either that consolidating supervisor or the coordinator, as so determined, shall cooperate with the consolidating supervisor or coordinator, as the case may be, for the purpose of applying these Regulation and the Capital Requirements Regulation on a consolidated basis.

• (6) In order to facilitate and establish effective cooperation under paragraph (5), the Bank shall have written coordination and cooperation arrangements in place with the consolidating supervisor or the coordinator, as the case may be.”.

Restrictions on use of Common Equity Tier 1 Capital maintained to meet the combined buffer requirement

43.

“Restrictions on use of Common Equity Tier 1 Capital maintained to meet the combined buffer requirement

116A. (1) Institutions shall not use Common Equity Tier 1 capital that is maintained to meet the combined buffer requirement—

• (a) to meet any of the requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation,

• (b) to meet the additional own funds requirements imposed pursuant to Regulation 92A to address risks other than the risk of excessive leverage, or

• (c) to comply with the guidance communicated in accordance with Regulation 92B(4) to address risks other than the risk of excessive leverage.

• (2) Institutions shall not use Common Equity Tier 1 capital that is maintained to meet one of the elements of its combined buffer requirement to meet the other applicable elements of its combined buffer requirement.

• (3) Institutions shall not use Common Equity Tier 1 capital that is maintained to meet the combined buffer requirement to meet the risk-based components of the requirements set out in Articles 92a and 92b of the Capital Requirements Regulation and in Regulations 80E and 80F of the European Union (Bank Recovery and Resolution) Regulations 2015 ( S.I. No. 289 of 2015 ).”.

Amendment of Regulation 117 of Principal Regulations

44.

• (a) in paragraph (1), by the substitution of “maintained to meet any of the own funds requirements specified in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation” for “maintained to meet the own funds requirement imposed by Article 92 of the Capital Requirements Regulation”, and

• (b) by the deletion of paragraph (2).

Amendment of Regulation 118 of Principal Regulations

45.

• “(2) The institution-specific countercyclical capital buffer referred to in paragraph (1) shall consist of Common Equity Tier 1 capital.”.

Amendment of Regulation 120 of Principal Regulations

46.

• (a) in paragraph (1), by the substitution of “authority responsible for the application” for “authority in charge of the application”, and

• (b) by the substitution of the following paragraph for paragraph (3):

• “(3) Where it applies an exemption under paragraph (1), the Bank shall notify the ESRB.”.

Amendment of Regulation 121 of Principal Regulations

47.

• (a) in paragraph (1), by the substitution of “G-SIIs” for “global systemically important institutions (in these Regulations referred to as ‘G-SIIs’)”, and

• (b) by the substitution of the following paragraph for paragraph (2):

• “(2) For the purposes of paragraph (1)—

  • (a) G-SIIs shall be—

    • (i) a group headed by an EU parent institution, an EU parent financial holding company, an EU parent mixed-financial holding company, or

    • (ii) an institution that is not a subsidiary of an EU parent institution, of an EU parent financial holding company or of an EU parent mixed-financial holding company,

  • (b) O-SIIs may either be an institution or a group headed by an EU parent institution, an EU parent financial holding company, an EU parent mixed financial holding company, a parent institution in a Member State, a parent financial holding company in a Member State or a parent mixed financial holding company in a Member State,

  • (c) the identification methodology for G-SIIs shall be based on the following categories:

    • (i) size of the group;

    • (ii) interconnectedness of the group with the financial system;

    • (iii) substitutability of the services or of the financial infrastructure provided by the group;

    • (iv) complexity of the group;

    • (v) cross-border activity of the group, including cross-border activity between Member States and between a Member State and a third country,

  • (d) each category, referred to in subparagraph (c), shall receive an equal weighting and shall consist of quantifiable indicators,

  • (e) the methodology, referred to in subparagraph (c), shall produce an overall score for each entity referred to in this Regulation that is assessed, which allows G-SIIs to be identified and allocated into a sub-category as described in Regulation 123(6),

  • (f) an additional identification methodology for G-SIIs shall be based on the following categories:

    • (i) the categories referred to in subparagraph (c)(i) to (iv);

    • (ii) cross-border activity of the group, excluding the group’s activities across participating Member States as referred to in Article 4 of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014¹⁷ ,

  • (g) each category referred to in subparagraph (f) shall receive an equal weighting and shall consist of quantifiable indicators,

  • (h) for the categories referred to in clause (i) of subparagraph (f) of this paragraph, the indicators shall be the same as the corresponding indicators determined pursuant to subparagraph (c), and

  • (i) the additional identification methodology shall produce an additional overall score for each entity as referred to in subparagraph (a) assessed, on the basis of which the Bank may take one of the measures referred to in Regulation 123(7)(c).”.

Amendment of Regulation 123 of Principal Regulations

48.

• (a) by the substitution of the following paragraph for paragraph (2):

• “(2) The Bank may require each O-SII, on a consolidated or sub-consolidated or individual basis, as applicable, to maintain an O-SII buffer of up to 3 per cent of the total risk exposure amount calculated in accordance with Article 92(3) of the Capital Requirements Regulation, taking into account the criteria for the identification of the O-SII.”,

• (b) by the insertion of the following paragraph after paragraph (2):

• “(2A) Subject to the Commission authorisation referred to in the third subparagraph of Article 131(5a) of the Capital Requirements Directive, the Bank may require each O-SII, on a consolidated, sub-consolidated or individual basis, as applicable, to maintain an O-SII buffer higher than 3 per cent of the total risk exposure amount calculated in accordance with Article 92(3) of the Capital Requirements Regulation.

• (2B) The buffers referred to in paragraphs (2) and (2A) shall consist of Common Equity Tier 1 capital.”,

• (c) by the substitution of the following paragraph for paragraph (4):

• “(4) Before setting or resetting an O-SII buffer, the Bank shall, not later than one month before the publication of the decision referred to in paragraph (2) and not later than three months before the publication of the decision of the Bank referred to in paragraph (2A) notify the ESRB, and such notifications shall include details of—

  • (a) the grounds on which the O-SII buffer is considered likely to be effective and proportionate to mitigate the risk,

  • (b) based on information which is available to the Bank, an assessment of the likely positive or negative impact of the O-SII buffer on the internal market, and

  • (c) the O-SII buffer rate that the Bank wishes to set.”,

• (d) by the substitution of the following paragraph for paragraph (5):

• “(5) Without prejudice to Article 133 of the Capital Requirements Directive and paragraph (2), where an O-SII is a subsidiary of either a G-SII or an O-SII which is either an institution or a group headed by an EU parent institution and subject to an O-SII buffer on a consolidated basis, the buffer that applies on an individual or sub-consolidated basis for the O-SII shall not exceed the lower of the following:

  • (a) the sum of the higher of the G-SII or the O-SII buffer rate applicable to the group on a consolidated basis and one per cent of the total risk exposure amount calculated in accordance with Article 92(3) of the Capital Requirements Regulation;

  • (b) 3 per cent of the total risk exposure amount calculated in accordance with Article 92 (3) of the Capital Requirements Regulation, or the rate the Commission has authorised to be applied to the group on a consolidated basis in accordance with Article 131(5a) of the Capital Requirements Directive.”,

• (e) by the substitution of the following paragraph for paragraph (6):

• “(6)

  • (a) There shall be at least 5 subcategories of G-SIIs.

  • (b) The lowest boundary and the boundaries between each subcategory shall be determined by the scores in accordance with the identification methodology referred to in Regulation 121(2)(c).

  • (c) The cut-off scores between adjacent sub-categories shall be defined clearly and shall adhere to the principle that there is a constant linear increase of systemic significance, between each sub-category resulting in a linear increase in the requirement of additional Common Equity Tier 1 capital, with the exception of sub-category 5 and any added higher sub-category.

  • (d) For the purposes of this paragraph, systemic significance is the expected impact exerted by the G-SII’s distress on the global financial market.

  • (e) The lowest sub-category shall be assigned a G-SII buffer of 1 per cent of the total risk exposure amount calculated in accordance with Article 92(3) of the Capital Requirements Regulation and the buffer assigned to each sub-category shall increase in gradients of at least 0.5 per cent of the total risk exposure amount calculated in accordance with Article 92(3) of the Capital Requirements Regulation.”,

• (f) by the substitution of the following paragraph for paragraph (7):

• “(7) Without prejudice to Regulation 121(2)(a) and (c) and paragraph (6) and using the sub-categories and cut-off scores referred to in paragraph (6), the Bank may, in the exercise of sound supervisory judgment—

  • (a) re-allocate a G-SII from a lower sub-category to a higher sub-category,

  • (b) allocate an entity referred to in Regulation 121(2) that has an overall score as referred to in Regulation 121(2)(e) that is lower than the cut-off score of the lowest sub-category, to that sub-category or to a higher sub-category, thereby designating it as a G-SII, or

  • (c) taking into account the Single Resolution Mechanism, on the basis of the additional overall score referred to in Regulation 121(2)(i) re-allocate a G-SII from a higher sub-category to a lower sub-category.”,

• (g) by the deletion of paragraph (8),

• (h) by the substitution of the following paragraph for paragraph (9):

• “(9) The Bank shall—

  • (a) notify the names of the G-SIIs and O-SIIs and the respective subcategory to which each G-SII is allocated, to the ESRB,

  • (b) disclose the names of the G-SIIs and O-SIIs and the sub-category to which each G-SII is allocated to the public,

  • (c) review annually the identification of G-SIIs and O-SIIs and the G-SII allocation into the respective sub-categories and report the result to the systemically important institution concerned and the ESRB, and

  • (d) disclose the updated list of identified systemically important institutions, and the sub-category into which each identified G-SII is allocated, to the public.”,

• (i) by the insertion of the following paragraph after paragraph (9):

• “(9A) A notification under paragraph (9)(a) shall contain full reasons why supervisory judgment has been exercised or not in accordance with paragraph (7).”,

• (j) by the deletion of paragraph (10),

• (k) by the substitution of the following paragraph for paragraph (11):

• “(11) Where a group, on a consolidated basis, is subject to a G-SII buffer and to an O-SII buffer, the higher buffer shall apply.”,

• (l) by the substitution of the following paragraph for paragraph (12):

• “(12) Where an institution is subject to a systemic risk buffer, set in accordance with Regulations 123A to 123N, that buffer shall be cumulative with the O-SII buffer or the G-SII buffer that is applied in accordance with this Regulation.”,

• (m) by the insertion of the following paragraph after paragraph (12):

• “(12A) Where the sum of the systemic risk buffer rate as calculated for the purposes of Regulation 123I, 123J or 123K and the O-SII buffer rate or the G-SII buffer rate to which the same institution is subject to would be higher than 5 per cent, the procedure set out in paragraph (2A) shall apply.”, and

• (n) by the deletion of paragraphs (13) and (14).

Systemic risk buffer

49.

“Designation of authority for the systemic risk buffer

123A. The Bank is designated as the authority responsible for setting the systemic risk buffer and for identifying the exposures and subsets of institutions to which it applies.

Power to set systemic risk buffer

123B. (1) The Bank may set a systemic risk buffer of Common Equity Tier 1 capital for the financial sector or one or more subsets of that sector on all or a subset of exposures as referred to in Regulation 123E, in order to prevent and mitigate macroprudential or systemic risks not covered by the Capital Requirements Regulation and by Regulations 118 to 123.

• (2) In this Regulation, ‘macroprudential or systemic risk’ means a risk of disruption in the financial system with the potential to have serious negative consequences to the financial system and the real economy in a specific Member State.

Calculation of systemic risk buffer

123C. Institutions shall calculate the systemic risk buffer as follows:

where:

BSR is the systemic risk buffer;

rT is the buffer rate applicable to the total risk exposure amount of an institution;

ET is the total risk exposure amount of an institution calculated in accordance with Article 92(3) of the Capital Requirements Regulation;

i is the index denoting the subset of exposures as referred to in Regulation 123E;

ri is the buffer rate applicable to the risk exposure amount of the subset of exposures i;

Ei is the risk exposure amount of an institution for the subset of exposures i calculated in accordance with Article 92(3) of the Capital Requirements Regulation.

Systemic risk buffer of Common Equity Tier 1 capital

123D. For the purposes of Regulation 123B, the Bank may require institutions to maintain a systemic risk buffer of Common Equity Tier 1 capital calculated in accordance with Regulation 123C, on an individual, consolidated, or sub-consolidated basis, as applicable in accordance with Title II of Part One of the Capital Requirements Regulation.

Exposures to which systemic risk buffer may apply

123E. A systemic risk buffer set by the Bank may apply to—

- (*a*) all exposures located in the State,

- (*b*) the following sectoral exposures located in the State:

    - (i) all retail exposures to natural persons which are secured by residential property;

    - (ii) all exposures to legal persons which are secured by mortgages on commercial immovable property;

    - (iii) all exposures to legal persons, excluding those specified in subparagraph (ii);

    - (iv) all exposures to natural persons, excluding those specified in point (i),

- (*c*) all exposures located in Member States other than the State, subject to Regulations 123K and 123N,

- (*d*) sectoral exposures, as identified in paragraph (b), located in Member States other than the State, only to enable recognition of a buffer rate set by that other Member State in accordance with Regulation 124,

- (*e*) exposures located in third countries, and

- (*f*) subsets of any of the exposure categories identified in paragraph (b).

  *Systemic risk buffer requirements*

  123F. (1) A systemic risk buffer set by the Bank shall—

- (*a*) apply to all exposures, or a subset of exposures as referred to in Regulation 123E, of all institutions, or one or more subsets of those institutions, for which the Bank is a competent authority under these Regulations, and

- (*b*) be set in steps of adjustment of 0.5 percentage points or multiples thereof.

• (2) The Bank may set different systemic risk buffer requirements for different subsets of institutions and of exposures.

• (3) The systemic risk buffer set by the Bank shall not address risks that are covered by Regulations 118 to 123.

Obligations on Bank

123G. When requiring a systemic risk buffer to be maintained, the Bank shall—

- (*a*) ensure that the systemic risk buffer does not entail disproportionate adverse effects on the whole or parts of the financial system of other Member States or of the European Union as a whole forming or creating an obstacle to the proper functioning of the internal market,

- (*b*) review the systemic risk buffer not less than once in every two years, and

- (*c*) not use the systemic risk buffer to address risks that are covered by Regulations 118 to 123.

  *Notification prior to publication of decision under Regulation 123L*

  123H. (1) The Bank shall notify the ESRB before the publication of the decision referred to in Regulation 123L.

• (2) Where the institution to which one or more systemic risk buffer rates apply is a subsidiary the parent of which is established in another Member State, the Bank shall also notify the authorities of that Member State.

• (3) Where a systemic risk buffer rate applies to exposures located in third countries, the Bank shall also notify the ESRB.

• (4) The notifications required under paragraphs (1), (2) and (3) shall specify in detail—

  • (a) the macroprudential or systemic risks in the State,

  • (b) the reasons why the dimension of the macroprudential or systemic risks threatens the stability of the financial system at national level justifying the systemic risk buffer rate,

  • (c) the justification for the systemic risk buffer being considered likely to be effective and proportionate to mitigate the risk,

  • (d) an assessment of the likely positive or negative impact of the systemic risk buffer on the internal market, based on information which is available to the State,

  • (e) the systemic risk buffer rate or rates that the Bank intends to impose,

  • (f) the exposures to which the rates referred to in subparagraph (e) shall apply,

  • (g) the institutions which shall be subject to the rates referred to in subparagraph (e), and

  • (h) where the systemic risk buffer rate applies to all exposures, the justification for the Bank considering that the systemic risk buffer is not duplicating the functioning of the O-SII buffer provided for in Regulation 123.

• (5) Where the decision to set the systemic risk buffer rate results in a decrease or no change from the previously set buffer rate, Regulations 123I, 123J and 123K shall not apply.

Notification: SyRB less than 3 per cent

123I. (1) Where—

- (*a*) a set or subset of exposures referred to in Regulation 123E is subject to one or more systemic risk buffers, and

- (*b*) the setting or resetting of a systemic risk buffer rate or rates by the Bank would result in a combined systemic risk buffer rate less than or equal to 3 per cent for any of those exposures,

  the Bank shall notify the ESRB in accordance with Regulation 123H one month before the publication of the decision referred to in Regulation 123L.

• (2) The recognition of a systemic risk buffer rate set by another Member State in accordance with Regulation 124 shall not count towards the 3 per cent threshold referred to in paragraph (1)(b).

Notification: SyRB between 3 and 5 per cent

123J. (1) Where—

- (*a*) a set or subset of exposures referred to in Regulation 123E is subject to one or more systemic risk buffers, and

- (*b*) the setting or resetting of a systemic risk buffer rate or rates by the Bank would result in a combined systemic risk buffer rate greater than 3 per cent and less than or equal to 5 per cent for any of those exposures,

  the Bank shall request, in the notification submitted in accordance with Regulation 123H, the opinion of the European Commission on the proposed setting or resetting of the rate or rates, as the case may be.

• (2) Where the opinion of the European Commission on the proposed setting or resetting of the rate or rates, as the case may be, referred to in paragraph (1) is negative, the Bank shall comply with that opinion or give reasons for not doing so.

• (3) Where—

  • (a) paragraph (1) applies,

  • (b) an institution to which one or more systemic risk buffer rates referred to in paragraph (1)(b) would apply is a subsidiary, and

  • (c) the parent of that subsidiary is established in another Member State,

  the Bank shall request, in the notification submitted in accordance with Regulation 123H, a recommendation by the European Commission and the ESRB.

• (4) Where

  • (a) paragraph (3) applies,

  • (b) the Bank and the competent authority or the designated authority, as the case may be, of the parent disagree on the systemic risk buffer rate or rates applicable to that institution, and

  • (c) the recommendation provided by the Commission and the ESRB on foot of the request referred to in paragraph (3) is negative,

  the Bank may refer the matter to the EBA and request its assistance in accordance with Article 19 of Regulation (EU) No 1093/2010.

• (5) Where the Bank refers a matter to the EBA under paragraph (4), the decision to set or reset the systemic risk buffer rate or rates shall be suspended until the EBA has taken a decision.

Notification: SyRB above 5 per cent

123K. Where—

- (*a*) a set or subset of exposures referred to in Regulation 123E is subject to one or more systemic risk buffers, and

- (*b*) the setting or resetting of a systemic risk buffer rate or rates by the Bank would result in a combined systemic risk buffer rate greater than 5 per cent for any of those exposures,

  the Bank shall seek the authorisation of the European Commission before implementing the systemic risk buffer.

  *Publication of SyRBs on website*

  123L. (1) The Bank shall announce the setting or resetting of one or more systemic risk buffer rates by way of publication on a website maintained by the Bank.

• (2) Subject to paragraph (3), the publication referred to in paragraph (1) shall include at least the following information:

  • (a) the systemic risk buffer rate or rates;

  • (b) the institutions to which the systemic risk buffer applies;

  • (c) the exposures to which the systemic risk buffer rate or rates apply;

  • (d) a justification for setting or resetting the systemic risk buffer rate or rates;

  • (e) the date from which the institutions shall apply the setting or resetting of the systemic risk buffer;

  • (f) where exposures located in those countries are recognised in the systemic risk buffer, the names of the countries.

• (3) Where the publication of the information referred to in paragraph (2)(d) could jeopardise the stability of the financial system, that information shall not be included in the publication.

Additional measures

123M. (1) Where an institution fails to maintain a systemic risk buffer at the rate set by the Bank under Regulation 123B, it shall be subject to the restrictions on distributions set out in Regulation 129(3) and (4).

• (2) Where the application of the restrictions on distributions leads to an unsatisfactory improvement of the Common Equity Tier 1 capital of an institution in light of the relevant systemic risk, the Bank may take additional measures in accordance with—

  • (a) Regulation 90,

  • (b) Regulation 92,

  • (c) Regulation 93,

  • (d) section 11 of the Act of 1971,

  • (e) section 40 of the Act of 1989, and

  • (f) section 45(1) of the Act of 2013.

  Exposures in another Member State

  123N. Where the Bank decides to set the systemic risk buffer on the basis of exposures located in other Member States, the buffer shall be set equally on all exposures located within the European Union, unless the buffer is set to recognise the systemic risk buffer rate set by another Member State in accordance with Regulation 124.”.

Amendment of Regulation 124 of Principal Regulations

50.

• (a) by the substitution of the following paragraph for paragraph (2):

• “(2) Where the Bank recognises a systemic risk buffer rate, referred to in paragraph (1), for domestically-authorised institutions, it shall notify the ESRB.”,

• (b) by the substitution of the following paragraph for paragraph (3):

• “(3) When deciding whether to recognise a systemic risk buffer rate, in accordance with paragraph (1), the Bank shall take into consideration the information presented by the Member State that sets that buffer rate in accordance with Article 133(9) and (13) of the Capital Requirements Directive.”, and

• (c) by the insertion of the following paragraphs after paragraph (3):

• “(4) Where—

  • (a) the Bank recognises a systemic risk buffer rate for domestically authorised institutions in accordance with paragraph (1), and

  • (b) that systemic risk buffer rate and the systemic risk buffer rate applied by the Bank in accordance with Regulations 123A to 123N address different risks,

  those systemic risk buffer rates may be cumulative.

• (5) Where—

  • (a) the Bank recognises a systemic risk buffer rate for domestically authorised institutions in accordance with paragraph (1), and

  • (b) that systemic risk buffer rate and the systemic risk buffer rate applied by the Bank in accordance with Regulations 123A to 123N address the same risks,

  only the higher systemic risk buffer rate shall apply.

• (6) Where the Bank sets a systemic risk buffer rate in accordance with Regulations 123A to 123N, the Bank may ask the ESRB to issue a recommendation, as referred to in Article 16 of Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 (as amended by Regulation (EU) 2019/2176 of the European Parliament and of the Council of 18 December 2019¹⁸ )¹⁹ , to one or more Member States which may recognise the systemic risk buffer rate.”.

Amendment of Regulation 125 of Principal Regulations

51.

• (a) by the substitution of the following paragraph for paragraph (3):

• “(3) The Bank shall—

  • (a) assess—

    • (i) the intensity of cyclical systemic risk, and

    • (ii) the appropriateness of the countercyclical buffer rate for the State,

    on a quarterly basis, and

  • (b) set or adjust the countercyclical buffer rate, if necessary.”,

• (b) by the insertion of the following paragraph after paragraph (3):