S.L. 330.9 Art. 43The bail-in tool.

(1) In order to give effect to the bail-in tool, the Resolution Committee shall have the resolution powers specified in regulation 63(1).

(2) The Resolution Committee shall apply the bail-in tool to meet the resolution objectives specified in regulation 31, in accordance with the resolution principles specified in regulation 34 for any of the following purposes:

(a) to recapitalise an institution or an entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) that meets the conditions for resolution to the extent sufficient to restore its ability to comply with the conditions for obtaining a licence (to the extent that those conditions apply to the entity) and to continue to carry out the activities for which it is licensed under the CRD or Directive 2014/65/EU, where the entity is licensed under those Directives, and to sustain sufficient market confidence in the institution or entity;

(b) to convert to equity or reduce the principal amount of claims or debt instruments that are transferred:

(i) to a bridge institution with a view to providing capital for that bridge institution; or

(ii) under the sale of business tool or the asset separation tool.

(3) The Resolution Committee may apply the bail-in tool for the purpose referred to in sub-regulation (2)(a) only if there is a reasonable prospect that the application of that tool together with other relevant measures including measures implemented in accordance with the business reorganisation plan required by regulation 52 will, in addition to achieving relevant resolution objectives, restore the institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) in question to financial soundness and long-term viability:

Provided that, where the conditions laid down in this sub-regulation are not met, the Resolution Committee may apply any of the resolution tools referred to in regulation 37(3)(a), (b) and (c) and the bail-in tool referred to in sub-regulation (2) (b).

(4) The Resolution Committee may apply the bail-in tool to all institutions or entities referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) while respecting in each case the legal form of the institution or entity concerned or may change the legal form.