Implementing regulation 2016/911 - Implementing technical standards with regard to the form and the content of the description of group financial support agreements in accordance with Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms - Main contents

EN

Official Journal of the European Union

L 153/25

Chapter III — Title II of Directive 2014/59/EU sets rules for group financial support agreements to provide financial support among a Union parent institution, or an entity referred to in point (b), (c) or (d) of Article 1(1) of Directive 2014/59/EU and its subsidiaries in other Member States or third countries that are institutions or financial institutions covered by the consolidated supervision of the parent undertaking, provided that the entity receiving the support meets the conditions for early intervention. This allows transfers of funding in a situation where a group entity is in severe distress. To make informed investment decisions, creditors and investors need transparency regarding risks and potential obligations resulting from these agreements and the chances of a recovery of the group resulting from the support agreement. Therefore the agreement should be in a form easily accessible to the public, comparable to financial statements.

The general terms of the group financial support agreement to be disclosed should include relevant information, such as the maximum amount of support, the principles for calculation of the consideration for the provision of the support, a general description of the maturity profile and the maximum term of loans provided as support. However, the disclosure should respect the need for confidentiality of more specific information.

This Regulation is based on the draft implementing technical standards submitted by the European Banking Authority to the Commission.

The European Banking Authority has conducted open public consultations on the draft implementing technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the opinion of the Banking Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council (2),

the names of the group entities being a party to the group financial support agreement;

the form the support may take;

in case of a loan, the purposes for which the capital advanced under the loan may be used;

in case of a guarantee, which transactions and which third parties are potentially covered;

to which extent obligations to provide group financial support and entitlement to receive group financial support of each of the parties to the group financial support agreement are reciprocal; if the agreement is not fully reciprocal, the information shall differentiate between the different parties following the different terms of agreement;

the limitations of the group financial support for each form of support covered by the financial support agreement;

the principles for calculation of the consideration for the provision of the group financial support and how they relate to market conditions at the time of the support;

a general description of the seniority, the maturity profile and the maximum term of any loans provided as support;

a general description of any further repayment obligations;

a general description of the circumstances or indicators relating to the receiving entity and the providing entity that trigger the provision of the support;

a general description of collateral and margin requirements.