Regulatory Alerts2019-10-16
Added · Updated
Circular to Institutions on a New CRR Requirement
As of 27 June 2019, all institutions subject to a minimum requirement for own funds and eligible liabilities ("MREL") decision outside the remit of the Single Resolution Board must obtain approval from the Resolution Committee under new article 78a of the CRR2 prior to calling, redeeming, repaying, or repurchasing eligible liabilities instruments defined under article 72b. The Resolution Committee issues either instrument-by-instrument permissions or general prior permissions for a predetermined amount and period not exceeding one year, while institutions with an MREL shortfall may reduce eligible liabilities only if replaced by other eligible liabilities instruments or own funds. Applications must be submitted at least four months prior to the intended action, although a transitional arrangement waives prior permission for market making activities until 31 December 2019 provided the aggregate trading volume does not exceed 1% of the total consolidated risk exposure amount.
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