Commission Delegated Regulation (EU) 2023/827 of 11 October 2022 laying down regulatory technical standards amending Delegated Regulation (EU) No 241/2014 as regards the prior permission to reduce own funds and the requirements related to eligible liabilities instruments (Text with EEA relevance)

A new Delegated Regulation as regards „prior permission to reduce own funds and the requirements related to eligible liabilities instruments“ was published in the Official Journal (OJ) of the EU. The delegated regulation modifies Commission Delegated Regulation (EU) No 241/2014, a delegated regulation under the Capital Requirements Regulation (CRR), to reflect the changes to the CRR made by Regulation (EU) 2019/876 (CRR II) as regards new criteria and requirements for eligible liabilities and as regards new requirements pertaining to own funds and to harmonize the CRR requirements with those stipulated in Directive (EU) 2019/879, the Bank Recovery and Resolution Directive II (BRRD II).
Specifically, the new delegated regulation
– specifies such criteria to ensure a high-quality loss absorbing capacity of the liabilities (no incentive to redeem, no funding by the resolution entity, no call on, redemption, or repurchase of eligible liabilities without explicit prior consent by the resolution authority);
– defines „sustainable for the income capacity of the institution“ for purposes of receiving permission to reduce eligible liabilities and replace them with own funds or equally or higher quality eligible liabilities;
– specifies the application procedure for reducing eligible liabilities by qualifying institutions;
– specifies the information that needs to be provided to the authorities for both general and ad-hoc permissions; and
– specifies the time limits that must be observed by institutions when seeking permission to reduce eligible liabilities (at least four months prior to the planned action).
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As the above paragraph only briefly summarizes the key provisions of the new delegated regulation, please refer to the original document for detailed, comprehensive information.