S.I. No. 713/2020 - European Union (Bank Recovery and Resolution) (Amendment) Regulations 2020

Amendment of Regulation 84A of Regulations of 2015

23.

“Non-application of Regulation 80J to certain entities.

84A. Regulation 80J, insofar as it concerns a joint decision or any decision taken in the absence of a joint decision, shall not apply to the entities referred to in Article 2 of the SRM Regulation.”.

Amendment of Regulation 85 of Regulations of 2015 (assessment of amount of bail-in)

24.

Amendment of Regulation 86 of Regulations of 2015 (treatment of shareholders in bail-in or write-down or conversion of capital instruments)

25.

Amendment of Regulation 87 of Regulations of 2015 (sequence of write-down and conversion)

26.

• (a) in paragraph (1), by the substitution of the following for subparagraph (e):

• “(e) where the total reduction of shares or other instruments of ownership, relevant capital instruments and bail-inable liabilities pursuant to subparagraphs (a) to (d) is less than the sum of the amounts referred to in Regulation 86(4)(b) and (c), the resolution authority shall reduce, to the extent required, the principal amount of, or outstanding amount payable in respect of, the rest of bail-inable liabilities, including debt instruments referred to in section 1428A(1)(d) of the Act of 2014, in accordance with the hierarchy of claims in normal insolvency proceedings, including the ranking of deposits provided for in the said section 1428A(1)(d) , pursuant to Regulation 80, in conjunction with the write-down pursuant to subparagraphs (a) to (d) to produce the sum of the amounts referred to in Regulation 86(4)(b) and (c).”,

and

• (b) in paragraphs (2) and (3), by the substitution of “bail-inable liabilities” for “eligible liabilities” in each place where it occurs.

Contractual recognition of bail-in

27.

“94. (1) Institutions and entities referred to in Regulation 2(1)(b) to (i) shall include a contractual term by which the creditor or party to the agreement or instrument creating the liability recognises that such liability may be subject to the write-down and conversion powers, and agrees to be bound by any reduction of the principal or outstanding amount due, conversion or cancellation that is effected by the exercise of those powers by a resolution authority (within the meaning of the Bank Recovery and Resolution Directive), provided that that liability complies with all of the following conditions:

• (a) the liability is not excluded under Regulation 80(2) to (8);

• (b) the liability is not a deposit referred to in section 1428A(1)(b)(i) or (ii) of the Act of 2014;

• (c) the liability is governed by the law of a third country;

• (d) the liability is issued or entered into on or after 28 December 2020.

• (2) The resolution authority may decide that the obligation in paragraph (1) shall not apply to institutions or entities in respect of which the requirement under Regulation 80B(1) equals the loss-absorption amount (within the meaning of Regulation 80E(2)(a)(i)), provided that liabilities that meet the conditions referred to in paragraph (1) and which do not include the contractual term referred to in that paragraph are not counted towards that requirement.

• (3) Paragraph (1) shall not apply where the resolution authority determines that the liabilities or instruments referred to in paragraph (1) can be subject to write-down and conversion powers by the resolution authority, or by the resolution authority of another Member State, pursuant to the law of the third country or to a binding agreement concluded with that third country.

• (4) Where an institution or entity referred to in Regulation 2(1)(b) to (i) determines that it is legally or otherwise impracticable to include in the contractual provisions governing a relevant liability a term required in accordance with paragraph (1), such institution or entity shall notify its determination, including the designation of the class of the liability and the justification for that determination, to the resolution authority.

• (5) The institution or entity shall provide the resolution authority with all information that the resolution authority requests, within a reasonable timeframe following the receipt of the notification under paragraph (4), in order for the resolution authority to assess the effect of such notification on the resolvability of that institution or entity.

• (6) Where there is a notification under the paragraph (4), the obligation to include in the contractual provisions a term required in accordance with paragraph (1) is suspended immediately on receipt by the resolution authority of the notification.

• (7) Where the resolution authority concludes that it is not legally or otherwise impracticable to include in the contractual provisions a term required in accordance with paragraph (1), taking into account the need to ensure the resolvability of the institution or entity, it shall require, within a reasonable timeframe after the notification under to paragraph (4), the inclusion of such contractual term.

• (8) The resolution authority may, in addition to requiring the inclusion of a contractual term under paragraph (7), require the institution or entity to amend its practices concerning the application of the exemption from contractual recognition of bail-in.

• (9) The liabilities referred to in paragraph (4) shall not include Additional Tier 1 instruments, Tier 2 instruments and debt instruments within the meaning of section 1428A of the Act of 2014, where those instruments are unsecured liabilities.

• (10) The liabilities referred to in paragraph (4) shall be senior to the liabilities referred to in section 1428A(1)(c) and (d) of the Act of 2014.

• (11) Where the resolution authority, in the context of the assessment of the resolvability of an institution or entity referred to in Regulation 2(1)(b) to (i) in accordance with Regulations 26 and 27, or at any other time, determines that, within a class of liabilities which includes eligible liabilities, the amount of liabilities that, in accordance with the paragraph (4), do not include the contractual term required in accordance with paragraph (1), together with the liabilities which are excluded from the application of the bail-in tool in accordance with Regulation 80(2) to (8) or which are likely to be excluded in accordance with Regulation 80(9) and (10) amounts to more than 10 per cent of that class, it shall immediately assess the impact of that particular fact on the resolvability of that institution or entity, including the impact on the resolvability resulting from the risk of breaching the creditor safeguards provided in Regulation 132 when applying write-down and conversion powers to eligible liabilities.

• (12) Where the resolution authority concludes, on the basis of the assessment referred to in paragraph (11), that the liabilities which, in accordance with paragraph (4), do not include the contractual term required in accordance with paragraph (1), create a substantive impediment to resolvability, it shall apply the powers provided in Regulation 28, as appropriate, to remove that impediment to resolvability.

• (13) Liabilities for which the institution or entity referred to in Regulation 2(1)(b) to (i) fails to include in the contractual provisions the term required in accordance with paragraph (1) or for which, in accordance with paragraphs (4) to (12) that requirement does not apply, shall not be counted towards the minimum requirement for own funds and eligible liabilities.

• (14) The resolution authority may require institutions and entities referred to in Regulation 2(1)(b) to (i) to provide it with a legal opinion relating to the legal enforceability and effectiveness of the contractual term referred to in paragraph (1).

• (15) Where an institution or entity referred to in Regulation 2(1)(b) to (i) does not include in the contractual provisions governing a relevant liability a contractual term required in accordance with paragraph (1), that shall not prevent the resolution authority from exercising the write-down and conversion powers in relation to that liability.

• (16) The resolution authority shall specify, where it deems it necessary, the categories of liabilities for which an institution or entity referred to in Regulation 2(1)(b) to (i) may reach the determination referred to in paragraph (4) that it is legally or otherwise impracticable to include the contractual term required in accordance with paragraph (1), based on the conditions further specified in the regulatory technical standards referred to in Article 55(6) of the Bank Recovery and Resolution Directive.”.

Amendment of title to Chapter 4 of Part 4 of Regulations of 2015

28.

“Write-down or conversion of capital instruments and eligible liabilities”.

Amendment of Regulation 95 of Regulations of 2015 (requirement to write down or convert capital instruments)

29.

“Requirement to write down or convert relevant capital instruments and eligible liabilities.

1. (1) The Court shall, on the application of the resolution authority, have the power to make an order (in these Regulations referred to as a ‘capital instruments order’) to write-down or convert relevant capital instruments and eligible liabilities into shares or other instruments of ownership of institutions and entities referred to in Regulation 2(1)(b) to (i).

2. (2) The power to write down or convert relevant capital instruments and eligible liabilities referred to in paragraph (1) may be exercised either —

   • (a) independently of resolution action, or

   • (b) in combination with a resolution action, where the conditions for resolution specified in Regulation 62, 62A or 63 are met.

3. (3) Where relevant capital instruments and eligible liabilities have been purchased by the resolution entity indirectly through other entities in the same resolution group, the power to write-down or convert those relevant capital instruments and eligible liabilities shall be exercised together with the exercise of the same power at the level of the parent undertaking of the entity concerned or at the level of other parent undertakings that are not resolution entities, so that the losses are effectively passed on to, and the entity concerned is recapitalised by, the resolution entity.

4. (4) After the exercise of the power to write-down or convert relevant capital instruments and eligible liabilities independently of resolution action, the valuation provided for in Regulation 133 shall be carried out, and Regulation 134 shall apply.

5. (5)

   • (a) The power to write-down or convert eligible liabilities independently of resolution action may be exercised only in relation to eligible liabilities that meet the conditions referred to in Regulation 80H(6)(a), except the condition related to the remaining maturity of liabilities as set out in Article 72c(1) of the Union Capital Requirements Regulation.

   • (b) When the power referred to in subparagraph (a) is exercised, the write-down or conversion shall be done in accordance with the principle referred to in Regulation 64(1)(g).

6. (6) Where a resolution action is taken in relation to a resolution entity or, in exceptional circumstances in deviation from the resolution plan, in relation to an entity that is not a resolution entity, the amount that is reduced, written down or converted in accordance with Regulation 96(1) at the level of such an entity shall count towards the thresholds laid down in Regulation 80(12)(a) that apply to the entity concerned.

7. (7) Where a determination has been made that conditions for resolution specified in Regulations 62 and 63 have been met, the proposed resolution order made in accordance with Regulation 104 shall provide for the write-down and conversion of relevant capital instruments and eligible liabilities referred to in paragraph (5).

8. (8) The resolution authority shall exercise the write-down or conversion power, in accordance with Regulation 96 and without delay, in relation to relevant capital instruments, and eligible liabilities referred to in paragraph (5), issued by an institution or entity referred to in Regulation 2(1)(b) to (i) when one or more of the following circumstances apply:

   • (a) where the determination has been made that the conditions for resolution specified in Regulation 62, 62A or 63 have been met, before any proposed resolution order is made;

   • (b) the competent authority determines that unless that power is exercised in relation to the relevant capital instruments, and eligible liabilities as referred to in paragraph (5), the institution or entity referred to in Regulation 2(1)(b) to (i) will no longer be viable;

   • (c) in the case of relevant capital instruments issued by a subsidiary and where those capital instruments are recognised for the purposes of meeting own funds requirements on an individual and on a consolidated basis, the competent authority and the appropriate authority of another Member State have made a joint determination taking the form of a joint decision in accordance with Regulation 156(5) to (9) that unless the write-down or conversion power is exercised in relation to those instruments, the group will no longer be viable;

   • (d) in the case of relevant capital instruments issued at the level of the parent undertaking and where those capital instruments are recognised for the purposes of meeting own funds requirements on an individual basis at the level of the parent undertaking or on a consolidated basis, the competent authority, where it is the consolidating supervisor of the group concerned, has made a determination that unless the write-down or conversion power is exercised in relation to those instruments, the group will no longer be viable;

   • (e) extraordinary public financial support is required by the institution or entity referred to in Regulation 2(1)(b) to (i) other than in any of the circumstances set out in Regulation 62(3)(d)(iii).

9. (9) For the purposes of paragraph (8), an institution or entity referred to in Regulation 2(1)(b) to (i) or a group shall be considered to be no longer viable only if both of the following conditions are met:

   • (a) the institution or entity referred to in Regulation 2(1)(b) to (i) or the group is failing or likely to fail;

   • (b) having regard to timing and other relevant circumstances, there is no reasonable prospect that any action, including alternative private sector measures or supervisory action (including early intervention measures), other than the write-down or conversion of capital instruments, or eligible liabilities as referred to in paragraph (5), independently or in combination with a resolution action would prevent the failure of the institution or entity referred to in Regulation 2(1)(b) to (i) or the group within a reasonable timeframe.

10. (10) For the purposes of paragraph (9)(a) —

    • (a) an institution or entity referred to in Regulation 2(1)(b) to (i) shall be considered to be failing or likely to fail where one or more of the circumstances set out in Regulation 62(3) occurs, and

    • (b) a group shall be considered to be failing or likely to fail where the group infringes or there are objective elements to support a determination that the group, in the near future, will infringe its consolidated prudential requirements in a way that would justify action by the competent authority including but not limited to because the group has incurred or is likely to incur losses that will deplete all or a significant amount of its own funds.

11. (11) A relevant capital instrument issued by a subsidiary shall not be written down to a greater extent or converted pursuant to paragraph (8)(b) on worse terms than equally ranked capital instruments at the level of the parent undertaking which have been written down or converted.

12. (12) Before making a determination referred to in paragraph (8)(c) in relation to a subsidiary that issues relevant capital instruments that are recognised for the purposes of meeting the own funds requirements on an individual and on a consolidated basis, the competent authority shall comply with the notification and consultation requirements set out in Regulation 98.

13. (13) Before making a proposed capital instruments order, the resolution authority shall ensure that a valuation of the assets and liabilities of the institution or entity referred to in Regulation 2(1)(b) to (i) has been carried out in accordance with Regulation 65 or 66 and that valuation shall form the basis of the calculation of the write-down to be applied to the relevant capital instruments, or eligible liabilities as referred to in paragraph (5) in order to absorb losses and the level of conversion to be applied to relevant capital instruments, or eligible liabilities as referred to in paragraph (5) in order to recapitalise the institution or the entity concerned.”.

Amendment of Regulation 96 of Regulations of 2015 (provisions governing write-down or conversion of capital instruments)

30.

• (a) in paragraph (1) —

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

• (ii) by the insertion of the following subparagraph after subparagraph (c):

• “(d) the principal amount of eligible liabilities referred to in Regulation 95(5)(a) is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives or to the extent of the capacity of the relevant eligible liabilities, whichever is lower.”,

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

• “(2) Where the principal amount of a relevant capital instrument, or an eligible liability as referred to in Regulation 95(5)(a) is written down —

  • (a) the reduction of that principal amount shall be permanent, subject to any write up in accordance with the reimbursement mechanism in Regulation 85(4) and (5),

  • (b) no liability to the holder of the relevant capital instrument, or of the eligible liability as referred to in Regulation 95(5)(a), shall remain under or in connection with that amount of the instrument, which has been written down, except for any liability already accrued, and any liability for damages that may arise as a result of an appeal challenging the legality of the exercise of the write-down power, and

  • (c) no compensation is paid to any holder of the relevant capital instruments, or of the liabilities as referred to in Regulation 95(2)(a), other than in accordance with paragraph (4).”,

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

• “(4) In order to effect a conversion of relevant capital instruments, and eligible liabilities as referred to in Regulation 95(5)(a), under paragraph (1)(b), (c) and (d), the resolution authority may direct institutions and entities referred to in Regulation 2(1)(b) to (i) to issue Common Equity Tier 1 instruments to the holders of the relevant capital instruments and such eligible liabilities.”,

• (d) in paragraph (5), by the substitution of “The relevant capital instruments and liabilities referred to in paragraph (4) may only be converted where the Common Equity Tier 1 instruments referred to in that paragraph are — ” for “The Common Equity Tier 1 instruments referred to in paragraph (4) shall be — ”, and

• (e) in paragraph (6), by the substitution of “each relevant capital instrument, or each eligible liability as referred to in Regulation 95(5)(a)” for “each relevant capital instrument”.

Amendment of Regulation 97 of Regulations of 2015 (authorities responsible for determination)

31.

• “(4) Where —

  • (a) the relevant capital instruments, or eligible liabilities as referred to in Regulation 95(5)(a), have been issued by an institution or entity referred to in Regulations 2(1)(b) to (i), and

  • (b) those relevant capital instruments or eligible liabilities are recognised for the purposes of meeting the requirement referred to in Regulation 80H(1) to (5),

  the competent authority shall be responsible for making the determination referred to in Regulation 95(8)(b).”.

Amendment of Regulation 98 of Regulations of 2015 (consolidated application: procedure for determination)

32.

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

• “(1) The competent authority, before making a determination referred to in Regulation 95(8)(b), (c), (d) or (e) in relation to a subsidiary that issues relevant capital instruments, or eligible liabilities as referred to in Regulation 95(5)(a), for the purposes of meeting the requirement referred to in Regulation 80H on an individual basis or relevant capital instruments that are recognised for the purposes of meeting the own funds requirements on an individual or consolidated basis, shall comply with the following requirements:

  • (a) when considering whether to make a determination referred to in Regulation 95(8) (b), (c), (d) or (e), after consulting with the resolution authority of the relevant resolution entity, it shall notify, within 24 hours of consulting with that resolution authority —

    • (i) the consolidating supervisor and, if different, the appropriate authority in the Member State where the consolidating supervisor is located, and

    • (ii) resolution authorities of other entities within the same resolution group that directly or indirectly purchased liabilities referred to in Regulation 80H(6) from the entity that is subject to Regulation 80H(1) to (5);

  • (b) when considering whether to make a determination referred to in Regulation 95(8)(c), it shall notify, without delay, the competent authority responsible for each institution or entity referred to in Regulation 2(1)(b) to (i) that has issued the relevant capital instruments in relation to which the write-down or conversion powers are to be exercised if that determination were made, and, if different, the appropriate authorities in the Member States where those competent authorities and the consolidating supervisor are located.”,

and

• (b) in paragraph (3), by the substitution of the following for “The competent authority, after consulting with the authorities notified under paragraph (1), shall assess the following matters:”:

“Where a notification has been made pursuant to paragraph (1), the competent authority, after consulting with the authorities notified in accordance with subparagraph (a)(i) or (b) of that paragraph, shall assess the following matters:”.

Amendment of Regulation 111 of Regulations of 2015 (powers of Court in making resolution order — general)

33.

Amendment of Regulation 126 of Regulations of 2015 (power of another Member State to enforce crisis management measures or crisis prevention measures)

34.

Amendment of Regulation 128 of Regulations of 2015 (exclusion of certain contractual terms in early intervention and resolution)

35.

• (a) in paragraph (4), by the substitution of “a crisis prevention measure, a suspension of obligation under Regulation 63A” for “a crisis prevention measure”, and

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

• “(6) A suspension or restriction under Regulation 63A, 129 or 130 shall not constitute non-performance of a contractual obligation for the purposes of paragraphs (1), (2) and (4) and of Regulation 131(1).”.

Amendment of Regulation 129 of Regulations of 2015 (power to suspend certain obligations)

36.

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

• “(4) The power referred to in paragraph (1) shall not apply to payment or delivery obligations owed to the following:

  • (a) systems and operators of systems designated in accordance with Directive 98/26/EC;

  • (b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation;

  • (c) central banks.”,

and

• (b) by the insertion of the following paragraphs after paragraph (4):

• “(5) The resolution authority shall —

  • (a) exercise the power referred to in paragraph (1) having regard to the circumstances of each case, and

  • (b) in particular, carefully assess the appropriateness of extending the suspension to eligible deposits, especially to covered deposits held by natural persons and micro, small and medium-sized enterprises.

• (6) Where the power to suspend payment or delivery obligations pursuant to paragraph (1) is exercised in respect of eligible deposits, the resolution authority shall direct any institution or entity in respect of whom that power is exercised to ensure that the depositors concerned have access to an appropriate daily amount (in this Regulation referred to as the ‘appropriate daily amount’) from those deposits determined by the resolution authority in accordance with paragraphs (7) and (8).

• (7) For the purposes of paragraph (6), the resolution authority —

  • (a) shall determine the appropriate daily amount having regard to all or any of the factors set out in paragraph (8), and

  • (b) may direct the entity to provide the resolution authority with such information as the resolution authority considers reasonably necessary for the purpose of determining the appropriate daily amount.

• (8) The factors referred to in paragraph (7) are as follows:

  • (a) the balance sheet position of the institution or entity concerned, including its liquidity position;

  • (b) the total amount of eligible deposits held by the institution or entity concerned;

  • (c) the total number of depositors of the institution or entity concerned;

  • (d) the period of the suspension pursuant to paragraph (1);

  • (e) the amount which is likely to be required by different classes of depositors to meet reasonable daily expenses under the economic conditions prevailing in the State when the power of suspension pursuant to paragraph (1) is exercised;

  • (f) such further information as may be provided to the resolution authority pursuant to a direction under paragraph (7)(b).”.

Amendment of Regulation 130 of Regulations of 2015 (power to restrict enforcement of security interests)

37.

• “(2) The resolution authority shall not exercise the power referred to in paragraph (1) in relation to any of the following:

  • (a) security interest of systems or operators of systems designated for the purposes of Directive 98/26/EC;

  • (b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of Regulation (EU) No 648/2012;

  • (c) central banks, over assets pledged or provided by way of margin or collateral by the institution under resolution.”.

Amendment of Regulation 131 of Regulations of 2015 (power to temporarily suspend termination rights)

38.

• “(4) Any suspension under paragraph (1) or (2) shall not apply to —

  • (a) systems or operators of systems designated for the purposes of Directive 98/26/EC,

  • (b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation, or

  • (c) central banks.”.

Contractual recognition of resolution stay powers

39.

“131A. (1) Institutions and entities referred to in Regulation 2(1)(b) to (i) shall include in any financial contract which they enter into and which is governed by third-country law, terms by which the parties recognise that the financial contract may be subject to the exercise of powers by the resolution authority to suspend or restrict rights and obligations under Regulations 63A, 129, 130 and 131 and recognise that they are bound by the requirements of Regulation 128.

• (2) Union parent undertakings shall ensure that their third-country subsidiaries which are credit institutions, financial institutions, investment firms, or those firms which would be investment firms if they had a head office in the State, include, in the financial contracts referred to in paragraph (1), terms to exclude that the exercise of the power of the resolution authority to suspend or restrict rights and obligations of the Union parent undertaking, in accordance with paragraph (1), constitutes a valid ground for early termination, suspension, modification, netting, exercise of set-off rights or enforcement of security interests on those contracts.

• (3) Paragraph (1) shall apply to any financial contract which —

  • (a) creates a new obligation or materially amends an existing obligation on or after 28 December 2020, or

  • (b) provides for the exercise of one or more termination rights or rights to enforce security interests to which Regulation 63A, 128, 129, 130 or 131 would apply if the financial contract were governed by the laws of the State.

• (4) Where an institution or entity does not include the contractual term required in accordance with paragraph (1), it shall not prevent the resolution authority from applying the powers referred to in Regulation 63A, 128, 129, 130 or 131 in relation to that financial contract.”.

Amendment of Regulation 152 of Regulations of 2015 (resolution colleges)

40.

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

• “(1) Subject to Regulation 153, where the resolution authority is a group-level resolution authority it shall establish resolution colleges to carry out the tasks referred to in Regulations 21 22, 27, 29, 80B to 80J, 155 and 156 and, where appropriate, to ensure cooperation and coordination with third-country resolution authorities.”,

and

• (b) in paragraph (2) —

• (i) by the substitution of “Resolution colleges” for “The resolution college”, and

• (ii) in subparagraph (c)(ix), by the substitution of “Regulations 80B to 80J” for “Regulations 82 and 83”.

Amendment of Regulation 153 of Regulations of 2015 (European resolution colleges)

41.

“153. (1) Where a third-country institution or third-country parent undertaking has -

• (a) subsidiaries established in the Union or Union parent undertakings, established in two or more Member States, or

• (b) two or more Union branches that are regarded as significant by two or more Member States,

the resolution authority, where it is the resolution authority of any such entity, shall, in cooperation with any other relevant resolution authority, establish one single European resolution college.

• (2) Where the resolution authority is a member of the European resolution college referred to in paragraph (1) it shall perform the functions and carry out the tasks specified in Regulation 152 with respect to the entities referred in paragraph (1) and, in so far as those tasks are relevant, to their branches.

• (3) The tasks referred to in paragraph (2) shall include the setting of the requirement referred to in Regulations 80B to 80J.

• (4) When setting the requirement referred to in Regulations 80B to 80J, members of the European resolution college shall take into consideration the global resolution strategy, if any, adopted by third-country authorities.

• (5) Where, in accordance with the global resolution strategy, subsidiaries established in the Union or a Union parent undertaking and its subsidiary institutions are not resolution entities and the members of the European resolution college agree with that strategy, subsidiaries established in the State or, on a consolidated basis, the Union parent undertaking, where it is established in the State, shall comply with the requirement of Regulation 80H(1) to (5) by issuing instruments referred to in subparagraphs (a) and (b) of Regulation 80H(6) to their ultimate parent undertaking established in a third country, or to the subsidiaries of that ultimate parent undertaking that are established in the same third country or to other entities under the conditions set out in subparagraphs (a)(i) and (b)(ii) of Regulation 80H(6).

• (6) Where only one Union parent undertaking holds all Union subsidiaries of a third-country institution or third-country parent undertaking and such Union parent undertaking is established in the State, the resolution authority shall chair the European resolution college.

• (7) Where paragraph (6) does not apply and the resolution authority is the resolution authority of a Union parent undertaking or a Union subsidiary with the highest value of total on-balance sheet assets held, the resolution authority shall chair the European resolution college.

• (8) Where the resolution authority and Union resolution authorities of other Member States concerned agree that another group or college, including a resolution college established under Regulation 152, performs the same functions, carries out the same tasks and complies with all conditions and procedures, including those covering membership and participation in European resolution colleges, specified in this Regulation and in Regulation 154, the resolution authority shall not be required to establish a European resolution college.

• (9) Where paragraph (8) applies, all references in this Regulation to a European resolution college shall also be understood as references to that other group or college.

• (10) Subject to paragraphs (6) to (9), the European resolution college shall otherwise function in accordance with Regulation 152.

• (11) The resolution authority, the competent authority and the Minister may act as a member of, or participate in, the European resolution college, in the manner specified in Regulation 152.”.

Amendment of Regulation 174 of Regulations of 2015 (penalties: specific provisions)

42.

• (a) in subparagraph (d), by the substitution of “Regulation 143(1);” for “Regulation 143(1).”, and

• (b) by the insertion of the following subparagraph after subparagraph (d):

• “(e) failure to comply with the minimum requirement for own funds and eligible liabilities referred to in Regulation 80G or 80H.”.

Amendment of Schedule to Regulations of 2015

43.

• (a) paragraph 6 of Part 2, and

• (b) paragraph 17 of Part 3.

Revocation

44.

Amendment of Regulation 2 of European Communities (Settlement Finality) Regulations 2010

45.

• (a) in the definition of “participant”, by the substitution of the following subparagraph for subparagraph (a):

• “(a) an institution, a central counterparty, a settlement agent, a clearing house, a system operator or a clearing member of a CCP authorised pursuant to Article 17 of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012⁹ , or”,

• (b) by the substitution of the following for the definition of “Settlement Finality Directive”:

“ ‘Settlement Finality Directive’ means Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998¹⁰ as amended by Directive 2009/44/EC of the European Parliament and of the Council of 6 May 2009¹¹ , Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 ¹² , Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012¹³ , Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014¹⁴ and Directive (EU) 2019/879 of the European Parliament and of the Council of 20 May 2019¹⁵ ;”,

and

• (c) by the insertion of the following definition:

“ ‘central counterparty’ or ‘CCP’ means a CCP as defined in point (1) of Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012¹⁶ ; ”.

Amendment of Companies Act 2014

46.

• (a) in section 1428A —

• (i) in subsection (1)(d), by the substitution of “the item listed in subparagraph (d)” for “the items listed in subparagraphs (a) to (d)”,

• (ii) by the insertion of the following subsection after subsection (1):

• “(1A) Claims resulting from an instrument the whole or part only of which is recognised as an item listed in subparagraph (a), (b) or (c) of Regulation 87(1) of the Bank Recovery and Resolution Regulations shall rank lower than any claim that does not result from such instrument.”,

and

• (iii) in subsection (3), by the insertion of “(other than claims referred to in subsection (1A))” after “claims”,

and

• (b) by the insertion of “and Directive (EU) 2019/879 of the European Parliament and of the Council of 20 May 2019¹⁷ ” after “2017” in each place where it occurs in the following provisions:

• (i) section 998A;

• (ii) section 1122A;

• (iii) section 1280A;

• (iv) section 1328(1);

• (v) section 1428A(5).

GIVEN under my Official Seal,

22 December, 2020.

PASCHAL DONOHOE,

Minister for Finance.

Footnotes