Leverage ratio buffer requirement

(1) A global systemically important institution must hold, in addition to the Tier 1 capital necessary to meet the own funds requirements under Article 92(1)(d) of Regulation (EU) No 575/2013 and the increased own funds requirements to safeguard against risks of excessive leverage under section 6c and under section 10(3) and (4), a leverage ratio buffer consisting of Tier 1 capital under Article 92(1a) of Regulation (EU) No 575/2013.
(2) A global systemically important institution that meets the leverage ratio buffer requirement may not make a distribution from Tier 1 capital, or on Tier 1 instruments under subsection (5), where this would reduce its Tier 1 capital to such an extent that the leverage ratio buffer requirement would no longer be met.
(3) A global systemically important institution that does not meet the leverage ratio buffer requirement must calculate the maximum distributable amount in respect of the leverage ratio and notify it to the supervisory authority. The global systemically important institution must take steps to ensure that the amount of distributable profits and the maximum distributable amount in respect of the leverage ratio are calculated accurately. It must be able to demonstrate the accuracy of the calculation to the supervisory authority on request. Until the supervisory authority decides on approving the capital conservation plan under subsections (7) to (9), the global systemically important institution may not 1. make a distribution from Common Equity Tier 1 capital or on Common Equity Tier 1 instruments under subsection (5), 2. enter into an obligation to pay variable remuneration or discretionary retirement benefits, or pay variable remuneration, where the corresponding obligation was entered into during a period in which the global systemically important institution did not meet the leverage ratio buffer requirement, and 3. make payments on Additional Tier 1 instruments. Further particulars are set out in a statutory instrument issued under section 10(1), first sentence, point 5(f).
(4) A global systemically important institution that does not meet the leverage ratio buffer requirement and intends to make a distribution of distributable profits or to carry out a measure under subsection (3), fourth sentence, points 1 to 3, communicates that intention to the supervisory authority, stating the following information: 1. the own funds held by the global systemically important institution, broken down by a) Common Equity Tier 1 capital, b) Additional Tier 1 capital; 2. the amount of interim profits and year-end profits; 3. the amount of the maximum distributable amount in respect of the leverage ratio; 4. the amount of distributable profits and their intended allocation between: a) dividend payments, b) share buy-backs, c) payments on Additional Tier 1 instruments, d) payment of variable remuneration or discretionary retirement benefits, either on account of a new payment obligation being entered into or on account of a payment obligation entered into during a period in which the global systemically important institution did not meet the leverage ratio buffer requirement.
(5) A distribution from Tier 1 capital or on Tier 1 instruments comprises 1. a distribution from Common Equity Tier 1 capital or on Common Equity Tier 1 instruments under section 10i(5), 2. a repayment of amounts paid up in connection with the own funds instruments under Article 51(1)(a) of Regulation (EU) No 575/2013, and 3. a distribution of the item named in Article 51(1)(b) of Regulation (EU) No 575/2013.
(6) A global systemically important institution that does not meet the leverage ratio buffer requirement must draw up a capital conservation plan. The capital conservation plan must be submitted to the supervisory authority within five working days of the global systemically important institution determining that it cannot meet the leverage ratio buffer requirement. The supervisory authority may extend the period for submission to no more than ten working days, where this appears appropriate in the individual case, having regard to the scope and complexity of the business activities. The capital conservation plan comprises 1. an estimate of income and expenditure and a forecast balance sheet, 2. measures to increase the institution's capital ratios, 3. a plan and a timetable for increasing own funds, in order to meet the leverage ratio buffer requirement in full, and 4. further information that the supervisory authority considers necessary for the assessment prescribed under subsection (7).
(7) The supervisory authority assesses the capital conservation plan and approves it where it considers that its implementation is very likely to preserve or raise sufficient Tier 1 capital to enable the global systemically important institution to meet the leverage ratio buffer requirement within a period the supervisory authority considers appropriate. The supervisory authority decides on approval within 14 days of receiving the capital conservation plan.
(8) Once the capital conservation plan has been approved, the global systemically important institution is entitled to make a distribution of distributable profits and to carry out measures under subsection (3), fourth sentence, points 1 to 3, up to the amount of the maximum distributable amount in respect of the leverage ratio.
(9) Where the supervisory authority does not approve the capital conservation plan, 1. the supervisory authority orders that the distribution restrictions under subsection (3), fourth sentence, points 1 to 3, continue to apply, or 2. the supervisory authority permits the global systemically important institution to carry out measures within the meaning of subsection (3), fourth sentence, points 1 to 3, up to an amount that may not exceed the maximum distributable amount in respect of the leverage ratio. In addition, the supervisory authority may require the global systemically important institution to increase its own funds to a specified amount within a specified period.
(10) The restrictions under subsections (2) and (3) apply exclusively 1. to payments and distributions that lead to a reduction of Tier 1 capital or of profits, and 2. insofar as the suspension of a payment, or a missed payment, constitutes neither a default nor a condition for initiating proceedings under the insolvency provisions applicable to the global systemically important institution.