EBA Guidelines on Recovery Plans under Articles 46 and 55 of Regulation (EU) 2023/1114

EBA/GL/2024/07
13 June 2024
Guidelines on recovery plans under Articles 46 and 55 of Regulation (EU) 2023/1114

1. Compliance and reporting obligations
   Status of these Guidelines

2. This document contains guidelines issued under Article 16 of Regulation (EU) No 1093/2010 1 . In accordance with Article 16(3) of Regulation (EU) No 1093/2010, competent authorities and financial institutions shall make every effort to comply with these guidelines.

3. These guidelines present the EBA’s view on appropriate supervisory practices within the European System of Financial Supervision and on how Union law should be applied in this specific area. Competent authorities, as defined in Article 4(2) of Regulation (EU) No 1093/2010, to which these guidelines apply, should comply with them by incorporating them into their supervisory practices (e.g. by modifying their legal framework or supervisory processes), including when the guidelines are addressed primarily to institutions.
   Reporting obligations

4. In accordance with Article 16(3) of Regulation (EU) No 1093/2010, competent authorities must notify the EBA whether they comply or intend to comply with these guidelines, or, if not, the reasons for non-compliance, by 13.11.2024. In the absence of notification by that date, competent authorities will be considered by the EBA as not complying with the guidelines. Notifications should be submitted using the form available on the EBA website, under reference ‘EBA/GL/2024/07’. Notifications should be communicated by persons duly authorised to report on compliance with the guidelines on behalf of the competent authorities they represent. Any change in the compliance status with the guidelines must also be reported to the EBA.

5. Notifications will be published on the EBA website, in accordance with Article 16(3).
   1 Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).

6. Subject matter, scope and definitions
   Subject matter

7. These guidelines specify the format of the recovery plan and the information to be provided therein that issuers of asset-referenced tokens and e-money tokens must draw up and maintain in accordance with Articles 46 and 55 of Regulation (EU) 2023/1114 2 .
   Scope

8. These guidelines apply to issuers of asset-referenced tokens and e-money tokens as defined in Article 3(1), points 6 and 7, of Regulation (EU) 2023/1114 (hereinafter, for the purposes of these guidelines, jointly referred to as ‘issuers’).

9. The provisions of these guidelines regarding the content of the recovery plan concerning the reserve asset, in particular paragraph 29, points 1 and 3, paragraph 30, points 6 and 7, paragraph 31 and paragraph 53, do not apply to e-money token issuers that are not subject to the obligation to hold a reserve asset in accordance with Regulation (EU) 2023/1114.
   Addressees

10. These guidelines are addressed to competent authorities as defined in Article 3(1), point 35, of Regulation (EU) 2023/1114.

11. They are also addressed to issuers, as defined in Article 3(1), point 10, of Regulation (EU) 2023/1114, of:
    a) asset-referenced tokens as defined in Article 3(1), point 6, of that Regulation (issuers of asset-referenced tokens); and b) e-money tokens as defined in Article 3(1), point 7, of that Regulation (issuers of e-money tokens).
    2 Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (OJ L 150, 9.6.2023, p. 40).

Definitions
10. Unless otherwise specified, the terms and expressions used and defined in Regulation (EU) 2023/1114 have the same meaning in these guidelines. Furthermore, for the purposes of these guidelines, the following definitions apply:

Terms and expressions	Definition
Overall recovery capacity	Refers to the ability to recover by implementing recovery options within a range of financial and non-financial distress scenarios.
Multi-chain issuance	Refers to the issuance and distribution on more than one distributed ledger technology (DLT) or similar technology of an asset-referenced token or an e-money token.
Misalignment risk	Refers to the risk that the value of the asset-referenced token or the e-money token is not aligned with the market value of the underlying asset(s), i.e. that a gap widens between the market value of the token and the market value of the referenced asset.

3. Implementation
   Date of application

4. These guidelines apply from 13.11.2024.

5. Recovery plans for issuers of asset-referenced tokens and issuers of e-money tokens
   4.1 Consideration of proportionality

6. In order to ensure that the information to be provided in a recovery plan, its format and its examination by competent authorities are compatible with the individual risk profile, the nature and business model of the issuer of asset-referenced tokens or e-money tokens, as well as with the scale and complexity of its activities, issuers and competent authorities should, when drawing up or assessing recovery plans, take into account the principle of proportionality.

7. To apply the preceding paragraph, issuers and competent authorities should take into account all of the following criteria:
   a. the size, complexity, nature and business model of the issuer; b. the classification of the asset-referenced token or e-money token issued as being of significant importance in accordance with Articles 43 and 44 and Articles 56 and 57 of Regulation (EU) 2023/1114;
   c. for issuers of asset-referenced tokens, the size, volatility, composition, concentration and nature of the reserve assets as well as of the asset-referenced token itself;
   d. for issuers of e-money tokens, the size, volatility, composition and concentration of the assets backing the funds received; e. the importance and risk profiles of crypto-asset service providers used to provide services related to asset-referenced tokens or e-money tokens issued by the issuer concerned; f. the importance and risk profiles of the DLT networks used by the issuer concerned to issue, through their intermediation, asset-referenced tokens or e-money tokens; g. the risk profile of third-party providers other than crypto-asset service providers and DLT networks that provide a significant or critical ICT service to the issuer concerned.

8. For the purposes of applying the principle of proportionality, issuers of tokens classified as being of significant importance should apply the requirements set out in paragraph 62 at least once a year and include in their recovery plan all categories of indicators for recovery plans provided for in paragraphs 29 and 30.
   4.2 Content of the recovery plan

9. The recovery plan should comprise all of the following elements:
   a) the summary of the essential elements of the recovery plan, as specified in section 4.3 of these guidelines; b) information on governance, including a framework of indicators for recovery plans and monitoring thresholds, as specified in section 4.4 of these guidelines; c) the description of applicable recovery options, including at least an analysis of the recovery scenario, a description of preparatory measures and information on the preservation of services, as specified in section 4.5 of these guidelines; d) the communication and information plan for the recovery plan, as specified in section 4.6 of these guidelines.
   4.3 Summary of the essential elements of the recovery plan

10. Issuers should include in their recovery plan a summary of the essential elements it contains as provided for in paragraph 15, points b), c) and d).

11. In the summary of the essential elements of the recovery plan, issuers should also list and highlight the main changes made to the previous version of the recovery plan submitted to the competent authority.
    4.4 Governance information

12. Issuers should include in their recovery plan a clear and detailed description of the governance processes related to the drawing up, updating and implementation of the recovery plan.

13. The governance information referred to in the preceding paragraph should cover at least the following elements:
    a) the role(s) and function(s) of the person(s) responsible for the drawing up, implementation and updating of the plan; b) the description of how the recovery plan fits into the issuer’s internal governance, business strategy and risk management framework (including the risk appetite statement); c) the description of the processes and timelines applicable to the periodic updating of the plan and its revision to respond to any significant change affecting the token in question, the issuer or its environment; d) the policies and procedures governing the approval of the recovery plan as well as its revisions and updates; e) the description of the step-by-step procedures, i.e. the conditions and procedures necessary for the timely implementation of specific recovery options provided for in the recovery plan. These should include at least clear information on the decision-making process for activating the recovery plan based on a clearly detailed step-by-step procedure, which applies when a breach of a threshold of an indicator of the recovery plan is observed or is likely to occur in the near future, in order to examine and determine which recovery option might need to be applied to restore compliance with the relevant regulatory requirements applicable to the reserve asset or to continue providing services related to the token concerned; f) the timeframe within which the decision to take recovery measures must be taken and when the competent authority must be informed, as well as the arrangements for doing so; g) the description of quantitative and qualitative indicators reflecting vulnerabilities, weaknesses or potential threats to the amount, liquidity and allocation of the reserve asset and the funds that issuers are required to hold at all times in accordance with Regulation (EU) 2023/1114, as specified in paragraphs 22 to 41.

14. When issuers have entered into agreements with third-party entities for the operation of the reserve asset, as well as for the investment of reserve assets, their custody and, where applicable, the distribution to the public of tokens in accordance with Article 34(5), point (h), of Regulation (EU) 2023/1114, they should include in their recovery plan a clear and detailed description of the processes put in place to exchange information so that the step-by-step procedure provided for in paragraph 37 is activated in a timely manner, if the issuer or the concerned third-party entity observes a breach of a threshold of an indicator of the recovery plan. The issuer should also specify in the recovery plan how the agreement concluded with one of these third parties guarantees that information is shared in a timely manner to enable the issuer to become aware of the breach or to observe that it is likely to occur in the near future, so that the plan can be activated in a timely manner.

15. Furthermore, issuers should ensure that the measures provided for in their recovery plan align with the requirements of ICT incident response and recovery plans as well as with other relevant parts of ICT risk management set out in Regulation (EU) 2022/2554 3 , when the concerned issuers were also subject to those requirements.
    3 Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ L 333, 27.12.2022, p. 1).

Recovery plan indicators and monitoring thresholds
22. Issuers should delineate in the recovery plan an adequate framework of indicators for recovery plans, which enables them to set predetermined criteria that may highlight the need to increase the frequency of monitoring or to activate the recovery plan. These criteria should be defined in such a way as to enable the issuer to monitor, report and activate recovery options, where applicable.
23. Recovery plan indicators should reflect both the specific risk profile of the token and the issuer as well as the operational environment. To this end, the calibration of recovery plan indicators and thresholds should be applied at the token level, with the exception of capital adequacy indicators which should be calibrated at the issuer level, based on its specific size, complexity, nature and business model, as well as operational risk indicators and market confidence indicators which should be calibrated both at the issuer level and at the token level.
24. In assessing the type of indicators to include in recovery plans, each issuer should carefully examine the types of events that could lead to non-compliance with regulatory requirements and define specific indicators based on its internal risk assessment. Consequently, issuers should consider the list of indicators presented in Annex I as indicative, and choose one or more or all of the indicators from each category.
25. Furthermore, issuers should not limit their set of indicators for recovery plans to the list presented in Annex I. They should rather consider including the most appropriate indicators, even if they are not listed in Annex I, based on the criteria set out in these guidelines, including indicators that would be useful to address environmental, social and governance risks, and in any other circumstance where issues relevant to a particular domain have been identified.
26. Issuers should ensure that the list of indicators for recovery plans and the calibration of their thresholds are based on their internal risk assessment and always align with their risk appetite framework. In the event of a change in the risk appetite of issuers, they should trigger a review of the list of indicators and recovery thresholds, in order to assess whether they remain appropriate.
27. Issuers should indicate in the recovery plan that they will monitor recovery plan indicators at a frequency adequate to transmit data reports concerning the indicators to the competent authority upon request in a timely manner. Issuers should also specify how they will monitor said indicators.
28. Issuers should include indicators for recovery plans of both quantitative and qualitative nature. When setting the thresholds of quantitative recovery plan indicators, in a manner that aligns with their overall risk management framework established in accordance with Article 45(3) and Article 45(7), point (b), of Regulation (EU) 2023/1114, issuers should use graduated measures (‘traffic light approach’) to alert their management body that these indicator thresholds could potentially be reached.

29. Issuers should include in the recovery plan at least the following categories of indicators for recovery plans, as explained in more detail in Annex I (section A – Minimum categories for all issuers of asset-referenced tokens or e-money tokens), namely:

1. liquidity risk indicators, informing the issuer of a potential or actual deterioration of the liquidity profile of the reserve asset;
2. operational risk indicators describing risks that may arise from inadequacy or failure of internal processes, personnel and systems or external events, including legal risk. When calibrating this type of indicator, issuers should specifically take into account the type of underlying technology (e.g. permissioned/permissioned distributed ledger) as well as its complexity (e.g. the existence of bridges, the quality of cryptography, etc.). Issuers should also consider that relying on a single and complex infrastructure rather than a standard infrastructure may have repercussions not only on their ability to replace it, but also on the availability of persons capable of maintaining and repairing it. In the case of multi-chain issuances, issuers should include specific indicators for each distributed ledger technology used to distribute the asset-referenced token and/or the e-money token;
3. credit risk/asset quality indicators, measuring the evolution of the quality of the reserve assets;
4. indicators related to the referenced asset(s), measuring the risk of mass redemption requests, triggered for example by misalignment;
5. capital adequacy indicators, measuring the potential deterioration of the quantitative and qualitative situation of the issuer’s capital, including the degree of compliance with the own funds requirements provided for in Article 35 of Regulation (EU) 2023/1114. These indicators should be calibrated at a level above the minimum regulatory requirement applicable to them. Capital adequacy indicators should only be used by issuers of asset-referenced tokens and e-money tokens that are not credit institutions.

30. Issuers should also include in the recovery plan the following categories of indicators for recovery plans, as explained in more detail in Annex I (section B – Additional minimum categories for issuers of asset-referenced tokens or e-money tokens of significant importance, and for other issuers that do not provide the competent authority with appropriate justification for non-inclusion):

6. market risk indicators, arising from all positions included in the reserve asset, including volatility related to that of the referenced asset(s);

7. concentration risk indicators, highlighting the excessive exposure of the reserve asset to a single counterparty or a set of interconnected counterparties;

8. market confidence indicators, reflecting the potential negative perception of the issuer or the token by market participants that could disrupt the issuer's access to funding and capital markets or trigger a rapid increase in redemption requests.

31. By way of derogation, issuers of tokens of non-significant importance are exempted from the obligation to include the categories of indicators for recovery plans set out in the previous paragraph, provided that they provide their competent authority with appropriate justifications indicating that these categories are not appropriate or relevant for their risk profile, business model, size and/or complexity.

32. Among the indicators related to the asset or assets referenced, issuers should always include at least one misalignment risk indicator, aimed at reflecting the risk that the market value of the token deviates from the market value of the referenced asset(s). The misalignment risk indicator should be measured as the ratio between the market value of the token and the market value of the referenced asset(s) and should at all times be equal to 1, with a tolerance interval not exceeding 1%. Cases of ratios below 1 should trigger the measure provided for in the issuer's recovery plan.

33. Issuers should clearly indicate in the recovery plan, to the satisfaction of the competent authority, how the calibration of the plan's indicators was determined and how the thresholds would be breached early enough to be effective.

34. Issuers should describe in the recovery plan how they will ensure the regular monitoring and updating of the adequacy of the recovery plan indicators and the calibration of their thresholds. In particular, issuers should specify how they will ensure that the recovery plan is updated when necessary due to a change in their financial and commercial situation and/or that of the token concerned. Issuers should specify in the recovery plan that any update to the calibration of the recovery plan indicator thresholds should be promptly notified and explained to the competent authority. Issuers should ensure at all times that the recovery plan indicators and their thresholds are fully compatible with their risk management framework.

35. The content of the recovery plan should be drawn up by issuers taking into account the fact that the activation of recovery options in case of non-compliance with the recovery plan indicator thresholds should not be automatic, and that it should be up to the issuer to decide whether and when to activate the recovery plan in case of non-compliance. When calibrating the recovery plan indicators, issuers should ensure that this decision is taken at a sufficiently early stage to be able to act, if necessary.

36. Issuers should establish in the recovery plan their internal decision-making process. Issuers should ensure that this process is thorough and well-founded, in accordance with paragraphs 39, 40 and 41. Furthermore, issuers should indicate in their recovery plan that they will maintain an open and active dialogue with the competent authority, whether or not they decide to take measures.

37. For non-compliance with recovery plan indicator thresholds to effectively serve as a warning, issuers should indicate in their recovery plan that they will promptly and in any event:

• within a maximum period of 24 hours from the breach of the recovery plan indicator threshold, alert the issuer's management body by activating the appropriate hierarchical and orderly procedure to ensure that any breach is taken into consideration and, where appropriate, followed up on; and
• no later than 24 hours after the activation of the internal hierarchical and orderly procedure, notify the competent authority of the breach of the recovery plan indicator threshold.

38. In order to take into account the probability that the deadlines set out in the previous paragraph do not allow the issuer to react in good time to the breach of a threshold, issuers should determine the most appropriate deadline for carrying out these activities, based on the specifics of their operations as well as the size and complexity of the asset reserve. In any event, the deadlines specified in the previous paragraph should not be extended.
39. Issuers should specify in the recovery plan that when a recovery plan indicator threshold is not met, the issuer's management body will assess the situation, decide whether to trigger the activation of the recovery plan and promptly inform the competent authorities. Issuers should also indicate in the recovery plan that the decision to activate the recovery plan will cover the type of recovery measures to be taken.
40. Issuers should also specify in the recovery plan that the decision referred to in the previous paragraph should be based on a reasoned analysis of the circumstances surrounding the breach.
41. Issuers should indicate in the recovery plan that, when they decide to take measures in accordance with the recovery plan, the competent authority will receive, as soon as possible, an action plan based on a list of credible and feasible recovery options to be used in this stress situation, as well as a timetable for remedying the breach. The recovery plan should also provide that, if no measures have been decided, the competent authority will receive an explanation clearly setting out the reasons and, where appropriate, demonstrating how the restoration of certain types of indicators and their non-compliance is possible without recourse to recovery measures.
    4.5 Recovery Options
42. Issuers should provide in their recovery plan a series of recovery options appropriate to their business model and the nature of the token referring to one or more assets or the e-money token issued.
43. With regard to the recovery options provided for in Article 46 of Regulation (EU) 2023/1114, issuers should apply the following:

a) the recovery plan should set a maximum amount for liquidity fees to be imposed on redemptions and specify how the duration of the measure will be communicated to the public; b) when setting the maximum amount of liquidity fees to be imposed on redemptions, issuers should ensure that this recovery option does not serve to increase the issuer's liquidity resources at the expense of token holders. Issuers should ensure that this recovery option is only applied temporarily during the distress phase, solely for the purpose of reducing redemption requests while stabilizing the value of the token; c) the recovery plan should set different quantitative levels of limits regarding the number or amount of tokens that can be redeemed per business day. These levels should be determined based on the severity of the breach(es) of the recovery plan indicator threshold(s) and should be set at both the aggregate level (e.g., as a percentage of the total amount of tokens issued) and the portfolio level; d) the recovery plan should explain the other corrective measures the issuer will take once redemptions are suspended. Issuers should indicate in their recovery plan that they will take into account the fact that the suspension of redemptions could have a negative impact on their reputation and the confidence of token holders and result in an increase in the number of redemption requests once the suspension is lifted. Issuers should specify in their recovery plan that they will examine in particular whether the lifting of the suspension should be accompanied by other measures, including liquidity fees or limits on the amount of tokens that can be redeemed daily; e) issuers should indicate in the recovery plan how they intend to restore compliance with regulatory requirements and clearly communicate to the market the steps to be taken.
44. In addition to the recovery options listed in Article 46 of Regulation (EU) 2023/1114, issuers should include at least one recovery option that would strengthen the capital position and one recovery option aimed at improving the issuer's liquidity position. A non-exhaustive list of possible recovery options is provided in Annex III.
45. The recovery plan should also detail any preparatory measures the issuer should take to facilitate the implementation of the recovery plan or improve its effectiveness, as well as an implementation schedule for these measures, and a description of all measures necessary to overcome obstacles to the effective implementation of the recovery options defined in the recovery plan.
46. For each recovery option, issuers should include in the recovery plan a feasibility assessment, which covers at least:

a) the assessment of risks associated with the recovery option, relying, if possible, on any experience of executing the recovery option or an equivalent measure; and b) an analysis and description of any significant obstacles to the effective and timely execution of the recovery option, specifying whether these obstacles could be overcome and how.
47. Furthermore, issuers should indicate, for each recovery option, how operational continuity will be ensured during the implementation of the relevant option. This should include an analysis of internal operations (e.g., IT systems, suppliers, and human resources operations) and the issuer's access to key third-party services that are essential for the regular conduct of its operations.
48. In order to prove the credibility of the recovery options, issuers should provide quantitative and qualitative evidence to support the expected benefits of each option. In any event, the recovery plan should at least detail the items listed in Annex II.
49. Issuers who also carry out activities other than the issuance of tokens referring to one or more assets and/or e-money tokens should assess the implications for their overall recovery capacity arising from these other activities and should indicate in the recovery plan that they will adopt the most appropriate measures to ensure compliance with Articles 46 and 55 of Regulation (EU) 2023/1114.
50. Issuers should specify in their recovery plan how they intend to monitor the implementation of recovery options to ensure that the execution of the recovery plan is likely to restore compliance with the regulatory requirements applicable to the asset reserve.
51. Issuers should indicate in the recovery plan the process envisaged for the implementation phase, always engaging in an open and active dialogue with the competent authority to ensure a smooth transition to the implementation of their orderly repayment plan in accordance with Articles 47 and 55 of Regulation (EU) 2023/1114 if it becomes clear that compliance with the regulatory requirements applicable to the asset reserve cannot be restored.
Recovery Scenarios
52. Issuers should ensure that they provide in their recovery plans an adequate number of scenarios of sufficiently varied nature to address a wide range of shocks.
53. When drawing up their recovery plans, issuers should use system-wide financial distress scenarios and/or idiosyncratic financial distress scenarios and/or non-financial distress scenarios (including affecting services) to test their recovery planning capabilities. The scenarios used for recovery planning should be designed in such a way as to compromise the issuer's compliance with the requirements applicable to the asset reserve if the issuer has not implemented the recovery measures in good time. The number and complexity of the

scenarios should be determined by each issuer taking into account the principle of proportionality, in accordance with section 4.1.
Preservation of Services
54. Issuers should define in the recovery plan how they intend to recover operations in good time and meet their obligations in the event of events that pose a significant risk of disruption to operations. Issuers should also list in the recovery plan the services they intend to preserve based on their business model and detail how they will ensure the preservation of services related to tokens referring to one or more assets and e-money tokens. The list of services to be preserved should at least include services related to the issuance and redemption of tokens. When the implementation of recovery options is likely to have a negative impact on the issuer's provision of one of the identified services, the description of the recovery options should specify how the issuer intends to ensure the continuity of said services during the implementation of the recovery plan.
55. Issuers who use euro payment instruments, as defined by the Eurosystem's supervisory framework for payment instruments, systems and devices (PISA framework), should ensure that the recovery measures provided for in the recovery plan are consistent with the objective of maintaining compliance with the principles set out in said framework.
56. Furthermore, issuers should ensure that the measures provided for in their recovery plan do not unduly affect the ability of crypto-asset service providers with which they deal4 to comply with Regulation (EU) 2022/2554.
4.6 Communication and Information Plan
57. Issuers should include in the recovery plan a communication and information plan describing how the issuer intends to inform token holders and other stakeholders, including the public, of the implementation of recovery options. The communication and information plan should also include effective proposals to manage any potentially negative market reaction.
58. The communication and information plan should specify how the issuer intends to communicate:
a) internally, in particular with staff, works councils and other staff representatives, where applicable; and 4 Reference is made to crypto-asset service providers providing custody services and offering exchange services for the conversion of tokens referring to one or more assets into fiat, and vice versa. The recovery measures taken by the issuer should not hinder the ability of crypto-asset service providers to remain in compliance with the Digital Operational Resilience Act for the financial sector.

b) externally, in particular with token holders, shareholders and other investors, competent authorities, financial markets and financial market infrastructures, other counterparties and the general public, where applicable.
59. In the communication and information plan, issuers should also specify how they will ensure the preservation of their token-related services, as well as the timeframes envisaged for the recovery of their operations and compliance with their obligations. The communication and information plan should also take into account scenarios in which it is unlikely that the issuer will recover its operations or honor its obligations, resulting in the activation of its repayment plan.
60. The communication and information plan should clarify the communication channels (or their combination) and strategies that the issuer intends to use during the recovery phase. In doing so, issuers should take into account the fact that:
a) different stakeholders may have different communication needs; b) internal and external stakeholders may need to be informed at different stages; and c) different recovery options may justify specific communication strategies.
4.7 Format and Maintenance of the Recovery Plan
61. Issuers should draw up their recovery plan in clear and understandable language. The recovery plan should be complete, explicit and precise, and contain at least all the information listed in these guidelines.
62. Issuers should indicate in their recovery plan that the information it contains will be updated regularly and at least at each significant change in their commercial or financial profile and/or the token issued. Any revision or update of the plan should be notified to the competent authority as soon as possible. Issuers of tokens of significant importance should specify in their recovery plan that they will update the information contained therein at least once a year.
4.8 Interactions between the different recovery planning obligations
Multiple issuers of the same token and issuers who offer the public two or more tokens
63. When a token referring to one or more assets or an e-money token is issued by several issuers, all issuers should indicate in their recovery plan how they will ensure effective coordination of their respective recovery plans.

In particular, issuers should put in place in their recovery plan appropriate measures to ensure that:
a) the indicators of the recovery plans are aligned to the greatest extent possible; b) the thresholds of the recovery plan indicators related to the tokens are set at the same level; c) the recovery options provided for in each plan are consistent with each other; d) the activation and execution of the respective recovery plans are agreed upon and coordinated among all issuers; e) the implementation of certain recovery options by one of the issuers does not have an undue impact on the implementation of other recovery options by the other issuers; f) the execution of the recovery plans is carried out in such a way that all token holders are treated fairly and equitably.
64. With regard to the format, issuers who offer the public two or more tokens should draw up a recovery plan for each token referring to one or more assets and/or e-money token they issue and calibrate the indicators and thresholds specific to the tokens defined therein.
65. Competent authorities should examine whether it is appropriate for issuers who offer the public two or more tokens to draw up a separate recovery plan for each token issued or a single recovery plan divided into different sections, each setting out elements specific to the token. This second option should be excluded when one of the tokens is issued by several issuers.
66. Issuers who offer the public two or more tokens should at least ensure that:
a) the recovery plan indicators related to the issuer are consistent and the respective thresholds are set at the same level; b) the recovery options provided for each token are not contradictory to each other; c) the activation and execution of a recovery plan would not have a negative impact on the activation and execution of other recovery plans; d) the implementation of any recovery option does not interfere with the provision of services related to other tokens issued.

Issuers subject to other recovery planning obligations under EU sectoral legislation
67. Where the issuer is a credit institution or investment firm required to draw up a recovery plan in accordance with Directive 2014/59/EU5, subject to the prior agreement of the competent authorities designated under Regulation (EU) 2023/1114 and Directive 2014/59/EU, and subject to compliance with the confidentiality requirements provided for in Directive 2014/59/EU, such issuer:
a) may add to the recovery plan drawn up and approved in accordance with Directive 2014/59/EU (the “BRRD recovery plan”) an annex containing all the information specified in these Guidelines, by referring to the relevant sections of the BRRD recovery plan that are appropriate to comply with sections 4.2 to 4.6 of these Guidelines, and/or by including new sections or information, where appropriate, to comply with these Guidelines; b) should submit, if it opts for the option referred to in point a) above, the recovery plan under Regulation (EU) 2023/1114 drawn up in the form of the annex referred to in point a) above to the competent authority designated under Regulation (EU) 2023/1114; the issuer should also clearly indicate in a statement/index the specific sections and pages of the BRRD recovery plan where the information provided for in these Guidelines is set out.
68. The preceding paragraph does not apply to credit institutions and investment firms that are issuers of tokens referencing one or more assets of significant importance.
5 Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 laying down a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU of the European Parliament and of the Council and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190).

Annex I — List of minimum categories of indicators for recovery plans and indicative list of indicators for recovery plans
List of minimum categories and non-exhaustive list of indicators for recovery plans A. Minimum categories for all issuers of tokens referencing one or more assets or electronic money tokens Category 1. Liquidity risk indicators a) Demand deposits with credit institutions and (where applicable) central banks/daily redemption amount (5-day rolling average) b) Demand deposits with credit institutions and (where applicable) central banks + repurchase agreements that can be terminated with one business day notice + highly liquid financial instruments/highest daily redemption amount over the last three months c) Demand deposits with credit institutions and (where applicable) central banks + repurchase agreements that can be terminated with five business days notice + highly liquid financial instruments/sum of the five highest daily redemption amounts over the last twelve months d) Demand deposits with credit institutions and (where applicable) central banks + repurchase agreements that can be terminated with one business day notice + highly liquid financial instruments/highest daily redemption amount over the last three months to the (x6) largest token holders e) Net daily flow, i.e., tokens issued – tokens redeemed (5-day rolling average) Category 2. Operational risk indicators a) Any incident significantly disrupting the normal functioning of the issuer’s services or the continuity of its activities (for example, prolonged unavailability affecting IT systems or token delivery systems; infrastructure failures, including distributed ledger technology malfunctions; risks arising from the interoperability of different infrastructures, for example via bridges), including when caused by a third-party service provider 6 Number of largest token holders taking into account the principles set out in these Guidelines. Several indicators may be used, each with a different number of largest token holders if this better corresponds to their risk management practices.

b) Recovery time objective (i.e., the maximum acceptable time to recover in the event of a product or system failure) c) Maximum time since the resignation or prolonged absence of a key staff member d) Actual or expected breach of any regulatory requirement e) Legal risk Category 3. Credit risk/asset quality indicators a) Highly liquid financial assets with impairment indicators [for example, credit quality impairment indicators as per International Financial Reporting Standard (IFRS) 9]/asset reserve b) Total amount of the asset reserve held as deposits placed with credit institutions having the lowest credit rating according to the issuer’s risk appetite in accordance with Article 36(4) of Regulation (EU) 2023/1114/total bank deposit within the asset reserve c) Distance to the minimum overcollateralisation level [as specified in Article 36(4) of Regulation (EU) 2023/1114] d) Negative evolution of the credit rating of key counterparties (for example, the credit institution holding the issuer’s deposit) Category 4. Indicators related to the referenced asset or assets a) Misalignment risk, measured as the ratio between the market value of the token and the market value of the referenced asset(s) b) Regulatory changes having a negative impact on the referenced asset(s) c) Freezing or significant negative modification of the market liquidity on which the referenced asset(s) are traded Category 5. Capital adequacy indicators a) Equity indicator B. Additional minimum categories for issuers of tokens referencing one or more assets or electronic money tokens of significant importance, and for other issuers who do not provide the competent authority with appropriate justification for non-inclusion Category 6. Market risk indicators a) Ratio “Daily change in market value of the asset reserve/rolling average over (x7) days” b) Ratio “Volatility of the asset reserve/volatility of the referenced assets” c) Sensitivity to interest rate changes of the asset reserve d) Ratio “Value at risk of the asset reserve/issuer’s equity” 7 Number of days, taking into account the principles set out in these Guidelines. Several indicators may be used, each with a different time horizon if this better corresponds to their risk management practices.

Category 7. Concentration risk indicators a) Ratio “Value of token held by the five largest counterparties/total value of tokens issued” b) Ratio “(Deposit with the same banking group + securities issued by a single counterparty)/maximum concentration limit8” c) Deposit concentration ratio of deposits held in credit institutions/maximum deposit concentration ratio Category 8. Market confidence indicators a) Negative media coverage9 for the issuer or tokens issued b) News or negative media coverage for key counterparties (for example, custodian service provider; banks holding a significant amount of deposits) c) Actual or expected breach of recovery plan indicator thresholds with respect to any other token issued d) Significant changes in the frequency or amount of payments executed using the token as well as in the way tokens are used as a means of payment e) Damage to the reputation of the issuer or its main representatives f) Sudden increase in redemption requests g) Sudden decrease in token issuances 8 In accordance with Article 36(4) of Regulation (EU) 2023/1114. 9 The reference to media includes social networks and specialised blog platforms.

Annex II – List of items to be included in the description of each recovery option

1. Items to be included in the description of recovery options:
   a) a summary of the essential elements; b) a description of the recovery option; c) an overview of the main assumptions underpinning each recovery option; d) an assessment of the strategic implications of executing the recovery option; e) an assessment of the financial impact under normal and stressed market conditions; f) the potential negative consequences of the recovery option; g) an effective execution schedule, including the planned schedule for implementing the necessary measures; h) any dependence on external counterparties for effective execution; i) mutual exclusivity – if certain recovery options exclude each other; j) interdependencies – if the activation of a recovery option could have an impact on the subsequent or simultaneous implementation of another option; k) operational considerations, such as approval requirements and the capacity to implement two or more recovery options simultaneously; l) an assessment of potential constraints to effective execution. This assessment is particularly relevant with regard to the options referred to in Article 46(1) of Regulation (EU) 2023/1114; m) the communication strategy to inform token holders of any measure likely to have a negative impact on them.

Annex III — Non-exhaustive list of recovery options that issuers may use in their recovery plans

1. Capital raising
2. Injection of additional funds
3. Access to standard central bank facilities, where applicable
4. Modification of the composition and/or reduction of the risk level of the asset reserve
5. Change of third-party provider (for example, crypto-asset service provider)
6. Purchase of financial guarantees from a credit institution or insurance company covering the value of the asset reserve
7. Sale of activities
8. Merger with another issuer
9. Merger of a token issuance referencing one or more assets with another
10. Commercial measures