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L 302/104

EN

Official Journal of the European Union

17.11.2009

Dated and undated instruments may be called or redeemed only with the prior consent of the competent authorities. The competent authorities may grant permission provided the request is made at the initiative of the credit institution and either financial or solvency conditions of the credit institu­ tion are not unduly affected. The competent authorities may require institutions to replace the instrument by items of the same or better quality referred to in point (a) or (ca) of Article 57.

11. in Article 65(1), point (a) is replaced by the following:

‘(a) any minority interests within the meaning of Article 21 of Directive 83/349/EEC, where the global integration method is used. Any instruments referred to in Article 57(ca), which give rise to minority interests shall meet the requirements under points (a), (c), (d) and (e) of Article 63(2) and Articles 63a and 66;’;

The competent authorities shall require the suspension of the redemption for dated instruments if the credit institution does not comply with the capital requirements set out in Article 75 and may require such suspension at other times based on the financial and solvency situation of credit institutions.

12. Article 66 is amended as follows:

(a) paragraphs 1 and 2 are replaced by the following:

The competent authority may at any time grant permission for early redemption of dated or undated instruments in the event that there is a change in the applicable tax treatment or regulatory classification of such instruments which was unforeseen at the date of issue.

3.

The provisions governing the instrument shall allow

the credit institution to cancel, when necessary, the payment of interest or dividends for an unlimited period of time, on a

non-cumulative basis.

However, the credit institution shall cancel such payments if it does not comply with the capital requirements set out in Article 75.

‘1.

The items referred to in Article 57(d) to (h) shall

be subject to the following limits:

  • (a)

    the total of the items referred to in Article 57(d) to (h) must not exceed a maximum of 100 % of the items in points (a) to (ca) minus (i), (j) and (k) of that Article; and

  • (b)

    the total of the items referred to in Article 57(g) to (h) must not exceed a maximum of 50 % of the items in points (a) to (ca) minus (i), (j) and (k) of that Article.

1a.

Notwithstanding paragraph 1 of this Article, the

The competent authorities may require the cancellation of such payments based on the financial and solvency situation of the credit institution. Any such cancellation shall not prejudice the right of the credit institution to substitute the payment of interest or dividend by a payment in the form of an instrument referred to in Article 57(a), provided that any such mechanism allows the credit institution to preserve financial resources. Such substitution may be subject to spe­ cific conditions established by the competent authorities.

4.

The provisions governing the instrument shall provide

for principal, unpaid interest or dividend to be such as to absorb losses and to not hinder the recapitalisation of the credit institution through appropriate mechanisms, as elabo­ rated by the Committee of European Banking Supervisors

under paragraph 6.

5.

In the event of the bankruptcy or liquidation of the

credit institution, the instruments shall rank after the items

referred to in Article 63(2).

6.

The Committee of European Banking Supervisors shall

elaborate guidelines for the convergence of supervisory prac­ tices with regard to the instruments referred to in paragraph 1 of this Article and in Article 57(a) and shall monitor their application. By 31 December 2011, the Commission shall review the application of this Article and shall report to the European Parliament and the Council together with any appropriate proposals to ensure the quality of own funds.’;

total of the items in Article 57(ca) shall be subject to the

following limits:

  • (a)

    instruments that must be converted during emer­ gency situations and may be converted at the initia­ tive of the competent authority, at any time, based on the financial and solvency situation of the issuer into items referred to in Article 57(a) within a pre- determined range must in total not exceed a maxi­ mum of 50 % of the items in points (a) to (ca) minus (i), (j) and (k) of that article;

  • (b)

    within the limit referred to in point (a) of this para­ graph, all other instruments must not exceed a maximum of 35 % of the items in points (a) to (ca) minus (i), (j) and (k) of Article 57;

  • (c)

    within the limits referred to in points (a) and (b) of this paragraph, dated instruments and instruments with provisions that provide for an incentive for the credit institution to redeem must not exceed a maxi­ mum of 15 % of the items in points (a) to (ca) minus (i), (j) and (k) of Article 57;

  • (d)

    the amount of items exceeding the limits set out in points (a), (b) and (c) must be subject to the limit set out in paragraph 1 of this Article.

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