Regulatory Alerts2021-01-15 | 2021_NBB_02Added · Updated
Circular of the Resolution College of the National Bank of Belgium regarding the granting of authorization for the reduction of eligible commitment instruments
The Resolution College of the National Bank of Belgium establishes the conditions and procedures for Belgian credit institutions and investment firms to obtain prior authorization to redeem or repurchase eligible commitment instruments before their contractual maturity. The circular specifies that applications must be submitted at least four months in advance and require detailed information on capital requirements, MREL compliance, and risk assessments. It defines three substantive conditions for ad hoc authorization, including replacement with equal or higher quality instruments, demonstration of excess capital buffers, or necessity for regulatory compliance, and outlines a general authorization mechanism capped at 3% of eligible instruments with a maximum duration of one year. The document mandates coordination with the competent authority and specifies that eligible amounts are deducted from commitments upon obtaining sufficient assurance of the operation.