S.L. 330.9 Art. 17Powers to address or remove impediments to resolvability.

(1) Where an assessment of resolvability for an entity is carried out in accordance with regulations 15 and 16, and where the

Resolution Committee, after consulting the Authority, determines that there are substantive impediments to the resolvability of that entity, the

Resolution Committee shall notify in writing such determination to the entity concerned, to the Authority and to the European resolution authorities of the jurisdictions in which significant branches are located.

(2) The requirement for the Resolution Committee to draw up resolution plans or for the Resolution Committee and the relevant European resolution authorities to reach a joint decision on group resolution plans in accordance with regulations 10(1) and 13(6) respectively shall be suspended following the notification referred to in sub-regulation (1) until the measures to remove the substantive impediments to resolvability have been accepted by the Resolution Committee pursuant to sub-regulation (3) or decided pursuant to sub-regulation (4).

(3) Within four months of the date of receipt of a notification made in accordance with sub-regulation (1), the entity shall propose to the Resolution Committee possible measures to address or remove the substantive impediments identified in the said notification. Provided that, the entity shall within two weeks of the date of receipt of a notification made in accordance with sub-regulation (1), propose to the Resolution Committee possible measures and the timeline for their implementation to ensure that the entity complies with regulations 45E or 45F and the combined buffer requirement, where a substantive impediment to resolvability is due to either of the following situations:

(a) the entity meets the combined buffer requirement when considered in addition to each of the requirements referred to in points (a), (b) and (c) of Article 141a(1) of the CRD, but it does not meet the combined buffer requirement when considered in addition to the requirements referred to in regulations 45C and 45D when calculated in accordance with paragraph (a) of regulation 45(2); or

(b) the entity does not meet the requirements referred to in Articles 92a and 494 of the CRR or the requirements referred to in regulations 45C and 45D: Provided further that, the timeline for the implementation of measures proposed under paragraph

(b) of the first proviso hereof shall take into account the reasons for the substantive impediment: Provided further that, the Resolution Committee shall, after consulting the Authority, assess whether the measures proposed under paragraphs (a) and (b) of the first proviso hereof effectively address or remove the substantive impediment in question.

(4) Where the Resolution Committee finds that the measures proposed by an entity in accordance with sub-regulation (3) do not effectively reduce or remove the impediments in question, it shall either directly or indirectly through the Authority, require the entity to take alternative measures that may achieve that objective, and notify in writing those measures to the said entity, which shall propose within one month a plan to comply with them: Provided that, in identifying alternative measures, the Resolution Committee shall demonstrate how the measures proposed by the entity would not be able to remove the impediments to resolvability and how the alternative measures proposed are proportionate in removing them. The Resolution Committee shall take into account the threat that those impediments to resolvability present for financial stability and the effect of the measures on the business of the entity, its stability and its ability to contribute to the economy.

(5) For the purposes of sub-regulation (4), the Resolution Committee shall have the power to take any of the following measures:

(a) require the entity to revise any intra-group financing agreements or review the absence thereof, or draw up service agreements, whether intra-group or with third parties, to cover the provision of critical functions;

(b) require the entity to limit its maximum individual and aggregate exposures;

(c) impose specific or regular additional information requirements relevant for resolution purposes;

(d) require the entity to divest specific assets;

(e) require the entity to limit or cease specific existing or proposed activities;

(f) restrict or prevent the development of new or existing business lines or sale of new or existing products;

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

(h) require an entity or a parent undertaking to set up a parent financial holding company in a Member State or a Union parent financial holding company;

(ha) require an institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) to submit a plan to restore compliance with the requirements of regulations 45E or 45F, expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) of the CRR and, where applicable, with the combined buffer requirement and with the requirements referred to in regulations 45E or 45F, expressed as a percentage of the total exposure measure referred to in Articles 429 and 429a of the CRR;

(i) require an institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) to issue eligible liabilities to meet the requirements of regulations 45E or 45F;

(j) require an institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1), to take other steps to meet the minimum requirement for own funds and eligible liabilities under regulations 45E or 45F, including in particular to attempt to renegotiate any eligible liability, additional Tier 1 or Tier 2 instruments it has issued, with a view to ensuring that any decision of the Resolution Committee to write down or convert that liability or instrument would be effected under the law of the jurisdiction governing that liability or instrument;

(ja) for the purpose of ensuring ongoing compliance with regulations 45E or 45F, require an institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1), to change the maturity profile of:

(i) own funds instruments, after having obtained the consent of the Authority, and

(ii) eligible liabilities referred to in regulation 45B and in paragraph (a) of regulation 45F(2);

(k) where an entity is the subsidiary of a mixed-activity holding company, requiring that the mixed-activity holding company set up a separate financial holding company to control the entity, if necessary in order to facilitate the resolution of the entity and to avoid the application of the resolution tools and the exercise of the powers referred to in regulations 31 to 86, both inclusive, having an adverse effect on the non-financial part of the group.

(6) A decision made pursuant to sub-regulation (1) or (4) shall meet the following requirements:

(a) it shall be supported by reasons for the assessment or determination in question;

(b) it shall indicate how that assessment or determination complies with the requirement for proportionate application laid down in sub-regulation (4); and

(c) it shall be subject to a right of appeal.

(7) Before identifying any measure referred to in sub-regulation (4), the Resolution Committee, after consulting the Authority and, if appropriate, the Central Bank, shall duly consider the potential effect of those measures on the particular entity, on the internal market for financial services, and on the financial stability in other Member States and in the Union as a whole.