Supplementary requirements for the own funds resources of institutions, institutional groups, financial holding groups, and mixed financial holding groups; power to issue a statutory instrument

(1) In the interest of institutions, institutional groups, financial holding groups, and mixed financial holding groups meeting their obligations towards their creditors, in particular in the interest of the safety of the assets entrusted to them, the Federal Ministry of Finance is empowered, by statutory instrument not requiring the consent of the Bundesrat, in consultation with the Deutsche Bundesbank, to issue, in supplementation of Regulation (EU) No 575/2013, more detailed provisions on the adequate own funds resources (solvency) of institutions, institutional groups, financial holding groups, and mixed financial holding groups, in particular
1. supplementary provisions on the requirements for approval of internal approaches,
2. provisions on the ongoing monitoring of internal approaches by the supervisory authority, in particular on measures where the requirements for internal approaches are not met and on the withdrawal of approval of internal approaches,
3. more detailed procedural provisions on the approval, ongoing monitoring, and withdrawal of approval of internal approaches,
4. more detailed provisions on the supervisory authority's review of the requirements for internal approaches, in particular on suitability assessments and follow-up examinations,
5. more detailed provisions on
a) ordering and determining the rate for the countercyclical capital buffer under section 10d, in particular on determining a buffer guide, on the procedure for recognising countercyclical capital buffers of states of the European Economic Area and third countries, on the Federal Institute's publication duties, and on calculating the institution-specific capital buffer rate,
b) ordering and determining the rate for the systemic risk buffer under section 10e, in particular on taking into account systemic or macroprudential risks, on determining the risk exposures to be taken into account and their location, and on the procedure for recognising systemic risk buffers of states of the European Economic Area and third countries,
c) ordering and determining the rate for the buffer for global systemically important institutions under section 10f, in particular on determining the global systemically important institutions and their allocation to size classes, on upgrading and downgrading between size classes, and on publishing the indicators underlying the quantitative analysis,
d) ordering and determining the rate for the buffer for other systemically important institutions under section 10g, in particular on determining the other systemically important institutions and on setting the rate at individual institution level, consolidated level, or sub-consolidated level,
e) the amount, and the more detailed particulars of the calculation, of the maximum distributable amount for the combined capital buffer requirement under section 10i,
f) the amount, and the more detailed particulars of the calculation, of the maximum distributable amount for the leverage ratio buffer requirement under section 10j,
6. more detailed provisions on setting the percentages and factors under Article 465(2), Article 467(3), Article 468(3), Article 478(3), Article 479(4), Article 480(3), Article 481(5), and Article 486(6) of Regulation (EU) No 575/2013,
7. more detailed provisions on the application and notification procedures provided for in Regulation (EU) No 575/2013, and
8. requirements for assessing the mortgage lending value of real property under Article 4(1), point 74, of Regulation (EU) No 575/2013, as amended from time to time,
9. more detailed provisions on supervisory benchmarking when applying internal approaches to determine own funds requirements, in particular more detailed provisions on the procedure and on the type, scope, and frequency of the information to be submitted by institutions, and more detailed provisions on the requirements to be prescribed by the supervisory authority for the composition of specific benchmarking portfolios, and
10. the duty of CRR institutions to disclose the particulars named in section 26a(1), second sentence, on a consolidated basis, and the return on assets under section 26a(1), fourth sentence, including the subject matter of the disclosure requirement, and the medium, the means of transmission, the frequency of disclosure, and the scope of the data to be transmitted confidentially to the European Commission under section 26a(1), fifth sentence. The Federal Ministry of Finance may, by statutory instrument, transfer the power to the Federal Institute, on the condition that the statutory instrument is issued in agreement with the Deutsche Bundesbank. Before issuing the statutory instrument, the institutions' umbrella associations must be heard.
(2) Institutions may process the personal data of their customers, of persons with whom they enter into contract negotiations on transactions giving rise to counterparty default risk, and of persons who are to answer for the fulfilment of a counterparty default risk, for the purposes of Regulation (EU) No 575/2013 and of the statutory instrument to be issued under subsection (1), first sentence, insofar as
1. that data, on the basis of a scientifically recognised mathematical-statistical method, is demonstrably significant for determining and taking into account counterparty default risks,
2. that data is necessary for building and operating, including developing and further developing, internal rating systems for estimating the credit institution's counterparty default risk parameters, and
3. it does not concern particulars of nationality or special categories of personal data under Article 9(1) of Regulation (EU) 2016/679. Trade and business secrets are treated as equivalent to personal data. To develop and further develop the rating systems, data may also be processed, by way of derogation from the first sentence, point 1, that, on a comprehensible economic assessment, may be significant for determining and taking into account counterparty default risks. Data may in particular be significant for determining and taking into account counterparty default risks where it belongs to, or has been obtained from data belonging to, the following categories:
1. income, asset, and employment circumstances and other economic circumstances, in particular the nature, scale, and economic viability of the data subject's business activity,
2. the data subject's payment behaviour and contractual fidelity,
3. enforceable claims and enforcement proceedings and measures against the data subject,
4. insolvency proceedings concerning the data subject's assets, where these have been opened or their opening has been applied for. This data may be collected
1. from the data subject,
2. from institutions belonging to the same institutional group,
3. from rating agencies and credit reference agencies, and
4. from generally accessible sources. Institutions may transmit personal data collected under the first sentence to other institutions of the same institutional group, and, in pseudonymised form, also to service providers engaged with building and operating, including developing and further developing, rating systems, insofar as this is necessary for building and operating, including developing and further developing, internal rating systems for estimating counterparty default risk parameters.
(3) The supervisory authority may order that an institution, an institutional group, a financial holding group, or a mixed financial holding group must meet own funds requirements, in respect of risks and elements of risk not covered by Article 1 of Regulation (EU) No 575/2013, that go beyond the own funds requirements under Regulation (EU) No 575/2013 and the additional own funds requirement under section 6c and under a statutory instrument issued under subsection (1). The supervisory authority may order additional own funds requirements under the first sentence in particular
1. to take account of a special business situation of the institution, institutional group, financial holding group, or mixed financial holding group, for instance on commencing business, or
2. where the institution, institutional group, financial holding group, or mixed financial holding group does not have proper business organisation within the meaning of section 25a(1). For institutions for which supervisory colleges are established under section 8e, the supervisory authority, in deciding on an order under the first sentence, takes into account the assessments of the respective supervisory college.
(3a) Where an institution has provided implicit support to a securitisation more than once, the supervisory authority orders that the significant risk transfer, for all securitisations for which the institution is deemed the originator, is not recognised, or is only partly recognised, in calculating the own funds required, in order to take account of further implicit support to be expected.
(4) The Federal Institute may, for a limited period, also require individual institutions, institutional groups, financial holding groups, and mixed financial holding groups, or individual types or groups of institutions, institutional groups, financial holding groups, and mixed financial holding groups, to hold own funds beyond the own funds requirements under Regulation (EU) No 575/2013 and under the statutory instrument under subsection (1), where this strengthening of capital is necessary
1. to counter a threatened disruption to the functioning of the financial market or a risk to financial market stability, and
2. to avoid significant adverse effects on other undertakings in the financial sector and on the general confidence of depositors and other market participants in a functioning financial system. A threatened disruption to the functioning of the financial market may in particular exist where, on account of exceptional market conditions, the refinancing ability of several institutions relevant to the financial market is at risk of being impaired. Insofar as it is the supervisory authority, the Federal Institute may in this case assess the adequacy of own funds by standards departing from Regulation (EU) No 575/2013 and from the statutory instrument under subsection (1) that take account of these special market conditions. Additional own funds may in particular be required in the course of a coordinated approach at European Union level, to strengthen confidence in the resilience of the European banking sector and to avert a threatened risk to financial market stability in Europe. In determining the amount and material composition of the additional own funds, and the material date for meeting the increased own funds requirements, the Federal Institute takes into account the standards that the competent European bodies have agreed to apply in the course of a coordinated approach at Union level. In this context, the Federal Institute may require institutions to set out, in a comprehensible plan, the measures by which they will meet the increased own funds requirements by the date set by the Federal Institute under the fifth sentence. Insofar as the plan affects the interests of the Financial Market Stabilisation Fund within the meaning of section 1 of the Stabilisation Fund Act, the assessment of the plan is carried out in agreement with the steering committee under section 4(1), second sentence, of the Stabilisation Fund Act (steering committee). The Federal Institute may require the short-term improvement of the submitted plan where it considers the measures and implementation periods stated to be insufficient, or where the institution does not comply with them. In this case, the institutions must also examine the possibility of applying for stabilisation measures under the Stabilisation Fund Act, where no alternative measures are available. Where the Federal Institute, in agreement with the steering committee, determines that no improvement, or only an insufficient improvement, of the plan has been made, the Federal Institute may appoint a special representative within the meaning of section 45c(1) and charge them with the task under section 45c(2), point 7a. It may also order that withdrawals by the holders or shareholders, the distribution of profits, and the payment of variable remuneration components are not permitted for as long as the ordered increased own funds requirements have not been met. Conflicting resolutions on the distribution of profits are void; no rights may be derived from conflicting provisions in contracts.
(5) Section 309, point 3, sections 313, 314, 489, 490, 724(2), and sections 725, 726, and 731 of the Civil Code, section 131(2) and (5), second sentence, and sections 132, 133, and 139 of the Commercial Code, and sections 254, 297(1), section 304(4), and section 305(5), fourth sentence, of the Stock Corporation Act do not apply where the purpose of a capital contribution is the provision of own funds within the meaning of Article 72 of Regulation (EU) No 575/2013. Section 309, point 3, of the Civil Code also does not apply to liabilities of the institution that meet the requirements of Article 12(16), first sentence, of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 225, 30.7.2014, p. 1; L 101, 18.4.2015, p. 62), other than point (d) thereof, or section 49(2) of the Recovery and Resolution Act, other than point 4 thereof, and that have a minimum term of one year. Sections 313, 314, and 490(1) of the Civil Code do not apply, during the agreed term, to contracts that give rise to liabilities of the institution meeting the requirements of Article 12(16), first sentence, of Regulation (EU) No 806/2014, other than point (d) thereof, or section 49(2) of the Recovery and Resolution Act, other than point 4 thereof, and that have a minimum term of one year. Where a silent partner participating in an institution's commercial business with a capital contribution meeting the requirements named in the third sentence and having a minimum term of one year gives extraordinary notice of termination of the partnership or their participation, the statutory or contractual entitlement to a settlement or payout does not fall due before the expiry of the agreed term.
(6) The supervisory authority may order that an institution submit more frequent or more extensive reports to the Deutsche Bundesbank than provided for in Article 430(1), first subparagraph, points (a), (b), (d) to (g), Article 430(2) to (5), and Articles 430a and 430b of Regulation (EU) No 575/2013.
(7) The supervisory authority may set a correction item against the own funds under Article 72 of Regulation (EU) No 575/2013. To determine the correction item, the Federal Institute may prescribe principles for determining risk provisioning and for the recognition and valuation of asset items. Where the correction item is set to take account of a capital increase not yet reflected in the balance sheet, the setting becomes moot on the adoption of the annual financial statements next drawn up for the end of a financial year. The supervisory authority must lift the setting on the institution's application, insofar as the condition for the setting ceases to apply.
(8) By way of derogation from Article 92(3), first subparagraph, of Regulation (EU) No 575/2013, the total risk exposure amount for institutions with their registered office in Germany is determined under Article 92(4) of Regulation (EU) No 575/2013, where
1. these institutions belong to an institutional group, a financial holding group, or a mixed financial holding group whose parent institution, parent financial holding company, or mixed parent financial holding company is resident in Germany, and
2. the parent undertaking of this institutional group, financial holding group, or mixed financial holding group determines the total risk exposure amount on a consolidated basis under Article 92(3), first subparagraph, of Regulation (EU) No 575/2013.
(9) An institution may, for calculating the undertaking's standardised total risk exposure amount (S-TREA), apply the risk weights under Article 465(5) and (9) of Regulation (EU) No 575/2013 for the risk exposures specified there, where the conditions laid down there for that purpose are met for the institution.