Explanatory Memorandum to COM(2014)710 - Specification of uniform conditions of application of Regulation 806/2014 with regard to ex-ante contributions to the Single Resolution Fund - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2014)710 - Specification of uniform conditions of application of Regulation 806/2014 with regard to ex-ante contributions to the Single ... |
|---|---|
| source | COM(2014)710  |
| date | 24-11-2014 |
Regulation (EU) No 806/2014 establishing uniform rules and uniform procedures for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund (‘SRM Regulation’) provides for the establishment of the Single Resolution Fund (‘Fund’) which is owned and administrated by the Single Resolution Board (‘Board’), also established by the SRM Regulation. The Fund, as part of the Board’s budget is financed through contributions from the banking sector of the Member States participating in the SRM.
A sufficiently funded Single Resolution Fund is essential for the SRM to function properly and protect financial stability without recourse to taxpayers' money. It is also in the interest of the banking sector that the Fund has the necessary resources to intervene where necessary in resolution procedures to ensure the effective application of the resolution tools.
Pursuant to Articles 58 and 59 of Regulation (EU) No 806/2014, the Board has an autonomous budget which is not part of the Union budget, comprising of two parts: Part I for the administration of the Board and Part II for the Single Resolution Fund ('the Fund'). This proposal for a Council implementing act refers only to Part II of the budget of the Board.
Pursuant to Article 60 of Regulation (EU) No 806/2014, the revenues of Part II of the budget, the Fund, shall consist, in particular, of annual contributions from entities within the scope of the SRM Regulation. Such contributions cover, in particular, the amounts used by the Board in resolution procedures to ensure the effective application of the resolution tools.
The Board is required under Article 70(2) of Regulation (EU) No 806/2014 to calculate each year the individual contributions of the institutions subject to the SRM to the Fund. The annual contribution of each entity shall be based on a basic contribution that is pro rata to the amount of its liabilities (excluding own funds) less covered deposits, with respect to the aggregate liabilities (excluding own funds) less covered deposits of all the institutions authorised in the territories of the participating Member States in the SRM which shall be risk adjusted based on the criteria listed in Article 103(7) of Directive 2014/59/EU.
Pursuant to Article 70(6) of Regulation (EU) No 806/2014, for the purpose of determining the annual contributions to the Fund, the Board shall apply the Commission Delegated Regulation (EU) No xxxx/2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex-ante contributions to resolution financing arrangements which is adopted pursuant to Article 103(7) of Directive 2014/59/EU and specifies the notion of adjusting contributions in proportion to the risk profile of institutions. When determining the annual contribution of entities the Board is also required under Article 70(2) of Regulation (EU) No 806/2014 to take into account the principle of proportionality, to avoid creating distortions between banking sector structures of the participating Member States in the SRM, and to allow for a balanced distribution of contributions across different types of banks.
Under Article 70(7)(a) and (b) of the SRM Regulation, the Council, acting on a proposal from the Commission, is empowered to adopt implementing acts on the contributions to the Fund in particular in relation to the application of the methodology for the calculation of individual contributions and the practical modalities for allocating to institutions the risk factors specified in the Commission Delegated Regulation (EU) No xxx/2014 with regard ex-ante contributions to the resolution financing arrangements.
This proposal from the Commission for a Council implementing act specifies the manner in which the additional risk adjustment component of the annual contribution and the methodology for the application of the risk adjustment to the basic annual contribution provided for in the Commission delegated Regulation (EU) No xxx/2014 with regard to ex-ante contributions to the resolution financing arrangements has to be applied when calculating the annual contributions by the Board in order to adapt the methodology laid down in that delegated act to the specificities of a unified system of contributions pooled into a single Fund on the basis of a European target level.
In accordance with Article 67 i of the SRM Regulation, the contributions to the Fund decided by the Board shall be raised by national resolution authorities and transferred to the Fund in accordance with the Agreement among the participating Member States in the SRM on the transfer of contributions the Fund and the progressive mutualisation of such contributions.
Contents
No additional formal impact assessment has been carried out for this delegated Regulation because the impacts have been assessed in the Impact Assessment conducted for the adoption of the Directive 2014/59/EU.
This proposal for a Council implementing Regulation covers in particular the following areas:
Article 1 lays down provisions on the application by the Board of the methodology for the calculation of individual contributions and the practical modalities for allocating to institutions the risk factors specified in the Commission Delegated Regulation (EU) No xxxx/2014 supplementing Directive 2014/59/EU of the European Parliament and of the Councilwith regard to ex-ante contributions to the resolution financing arrangements.
Article 2 defines the scope of the Implementing Regulation. The addressees are all the entities falling within the scope of the SRM Regulation.
Article 3 lays down the applicable definitions.
Article 4 provides for the rules on the determination of the annual contributions to the single resolution fund.
Article 5 sets out communication requirements to be complied with by the Board.
Article 6 sets out reporting requirements.
Article 7 lays down transitional provisions.