S.L. 330.9 Art. 40Bridge institution tool.

(1) In order to give effect to the bridge institution tool and having regard to the need to maintain critical functions in the bridge institution, the Resolution Committee shall have the power to transfer to a bridge institution:

(a) shares or other instruments of ownership issued by one or more institutions under resolution;

(b) all or any assets, rights or liabilities of one or more institutions under resolution: Provided that, subject to regulation 85, the transfer referred to in this sub-regulation may take place without obtaining the consent of the shareholders of the institutions under resolution or any third party other than the bridge institution, and without complying with any procedural requirements under company or securities law, and it shall not constitute a default or termination event in relation to any obligation relating to such assets or liabilities or under any contract to which the failed institution is a party.

(2) The bridge institution shall be a legal person that meets all of the following requirements:

(a) it is wholly or partially owned by one or more public authorities which may include the Resolution Committee or the resolution financing arrangement and is controlled by the Resolution Committee;

(b) it is created for the purpose of receiving and holding some or all of the shares or other instruments of ownership issued by an institution under resolution or some or all of the assets, rights and liabilities of one or more institutions under resolution with a view to maintaining access to critical functions and selling the institution or entity referred to in paragraphs (b), (c) or

(d) of the definition "entity" in regulation 2(1):

Provided that, the application of the bail-in tool for the purpose referred to in paragraph (b) of regulation 43(2) shall not interfere with the ability of the Resolution Committee to control the bridge institution.

(3) When applying the bridge institution tool, the Resolution Committee shall ensure that the total value of liabilities transferred to the bridge institution does not exceed the total value of the rights and assets transferred from the institution under resolution or provided by other sources.

(4) Subject to regulation 37(7), any consideration paid by the bridge institution shall benefit:

(a) the owners of the shares or instruments of ownership, where the transfer to the bridge institution has been effected by transferring shares or instruments of ownership issued by the institution under resolution from the holders of those shares or instruments to the bridge institution;

(b) the institution under resolution, where the transfer to the bridge institution has been effected by transferring some or all of the assets or liabilities of the institution under resolution to the bridge institution.

(5) When applying the bridge institution tool, the Resolution Committee may exercise the transfer power more than once in order to make supplemental transfers of shares or other instruments of ownership issued by an institution under resolution or, as the case may be, assets, rights or liabilities of the institution under resolution.

(6) Following an application of the bridge institution tool, the Resolution Committee may:

(a) transfer rights, assets or liabilities back from the bridge institution to the institution under resolution, or the shares or other instruments of ownership back to their original owners, and the institution under resolution or original owners shall be obliged to take back any such assets, rights or liabilities, or shares or other instruments of ownership, provided that the conditions laid down in sub-regulation (7) are met;

(b) transfer, shares or other instruments of ownership, or assets, rights or liabilities from the bridge institution to a third party.

(7) The Resolution Committee may transfer shares or other instruments of ownership, or assets, rights or liabilities back from the bridge institution in one of the following circumstances:

(a) the possibility that the specific shares or other instruments of ownership, assets, rights or liabilities might be transferred back is stated expressly in the instrument by which the transfer was made;

(b) the specific shares or other instruments of ownership, assets, rights or liabilities do not in fact fall within the classes of, or meet the conditions for transfer of shares or other instruments of ownership, assets, rights or liabilities specified in the instrument by which the transfer was made: Provided that such a transfer back may be made within any period, and shall comply with any other conditions, stated in that instrument for the relevant purpose.

(8) Transfers between the institution under resolution, or the original owners of shares or other instruments of ownership, on the one hand, and the bridge institution on the other, shall be subject to the safeguards referred to in regulations 73 to 80.

(9) For the purposes of exercising the rights to provide services or to establish itself in another Member State in accordance with the CRD or Directive 2014/65/EU, a bridge institution shall be considered to be a continuation of the institution under resolution, and may continue to exercise any such right that was exercised by the institution under resolution in respect of the assets, rights or liabilities transferred:

Provided that, for other purposes, the Resolution Committee may require that a bridge institution is considered to be a continuation of the institution under resolution, and is able to continue to exercise any right that was exercised by the institution under resolution in respect of the assets, rights or liabilities transferred.

(10) The bridge institution may continue to exercise the rights of membership and access to payment, clearing and settlement systems, stock exchanges, investor compensation schemes and deposit guarantee schemes of the institution under resolution, provided that it meets the membership and participation criteria for participation in such systems: Provided that:

(a) access shall not be denied on the ground that the bridge institution does not possess a rating from a credit rating agency, or that rating is not commensurate to the rating levels required to be granted access to the systems referred to in this sub-regulation;

(b) where the bridge institution does not meet the membership or participation criteria for a relevant payment, clearing or settlement system, stock exchange, investor compensation scheme or deposit guarantee scheme, the rights referred to in this sub-regulation shall be exercised for such a period of time as may be specified by the Resolution Committee, not exceeding 24 months, renewable on application by the bridge institution to the Resolution Committee.

(11) Without prejudice to regulations 73 to 80, shareholders or creditors of the institution under resolution and other third parties whose assets, rights or liabilities are not transferred to the bridge institution shall not have any rights over or in relation to the assets, rights or liabilities transferred to the bridge institution, its board of directors or senior management.

(12) The objectives of the bridge institution shall not imply any duty or responsibility to shareholders or creditors of the institution under resolution, and the board of directors or senior management shall have no liability to such shareholders or creditors for acts and omissions in the discharge of their duties unless the act or omission implies gross negligence or serious misconduct which directly affects rights of such shareholders or creditors.

(13) The Resolution Committee may further limit the liability of a bridge institution and its board of directors or senior management for acts and omissions in the discharge of their duties.