Transitional provisions and provisions following resolution

(1) By way of derogation from section 49(1), the resolution authority sets appropriate transitional periods for institutions or group entities to meet the requirements under section 49e or section 49f, or a requirement resulting from the application of section 49b(4), (5) or (7). The transitional period for institutions and group entities to meet the requirements referred to in the first sentence ends on 1 January 2024.
(2) The resolution authority sets interim targets for the requirements under section 49e or section 49f, or for requirements resulting from the application of section 49b(4), (5) or (7). Institutions or group entities must meet the interim targets by 1 January 2022, to ensure a linear build-up of own funds and of the stock of eligible liabilities towards meeting the requirements.
(2a) The resolution authority may set a transitional period ending after 1 January 2024, where this is sufficiently justified and appropriate on the basis of the criteria referred to in subsection (7), having regard to 1. developments in the undertaking's financial position, 2. the prospect that the undertaking will be able, within a reasonable time frame, to ensure that the requirements under section 49e or section 49f, or a requirement resulting from the application of section 49b(4), (5) or (7), are met, and 3. the undertaking's ability to replace liabilities that no longer satisfy the eligibility or maturity criteria set out in Articles 72b and 72c of Regulation (EU) No 575/2013 and in section 49b or section 49f(2). Where the condition under the first sentence, point 3, is not satisfied, the resolution authority must assess whether this is attributable to undertaking-specific developments or to market-wide disruptions.
(3) The time limit for resolution entities to meet the minimum levels of the requirements under section 49c(5) and (6) ends on 1 January 2022.
(4) The levels of the requirements under section 49c(5) or (6) do not apply for a period of two years from the day 1. on which the resolution authority applied the creditor participation instrument, and 2. on which an alternative private-sector measure was carried out in respect of the resolution entity under section 62(1), first sentence, point 3, letter b, by which capital instruments and other liabilities were written down or converted into Common Equity Tier 1 instruments, or on which write-down or conversion powers were exercised under sections 65, 77(2) and 89 in respect of that resolution entity, in order to recapitalise the resolution entity without applying resolution tools.
(5) The requirements under section 49b(4) and (7) and section 49c(5) and (6) do not apply for a period of three years from the day on which the resolution entity, or the group to which the resolution entity belongs, was identified as a global systemically important institution, or from which the resolution entity satisfies the conditions under section 49c(5), or is required to satisfy them on account of a decision of the resolution authority under section 49c(6).
(6) By way of derogation from section 49(1), the resolution authority sets an appropriate transitional period for an institution or group entity in respect of which resolution tools, or the power to write down or convert under sections 65, 77(2) and 89, have been applied, to meet the requirements under section 49e or section 49f, or a requirement resulting from the application of section 49b(4), (5) or (7).
(7) For the purposes of subsections (1) to (6), the resolution authority notifies the institution or group entity, during the transitional period, of a planned minimum requirement for own funds and eligible liabilities for successive twelve-month periods, in order to facilitate a gradual build-up of its loss absorption and recapitalisation capacity. At the end of the transitional period, the minimum requirement for own funds and eligible liabilities corresponds to the amount set under section 49b(4), (5) or (7), section 49c(5) or (6), section 49e, or section 49f, as applicable.
(8) In setting the transitional period, the resolution authority takes into account whether existing deposits predominate at the institution or group entity, and debt instruments are absent from the funding model. It also takes into account the institution's or group entity's access to the capital markets for eligible liabilities, and the extent to which the resolution entity relies on Common Equity Tier 1 capital to meet the requirement under section 49e.
(9) The resolution authority may subsequently amend the transitional period set under subsection (1), first sentence, or under subsection (6).