Removal of procedural impediments to the creditor participation instrument

(1) The resolution authority may, in agreement with the supervisory authority, direct that institutions or group entities must at all times hold a sufficient amount of authorised share capital, authorised registered capital, or other Common Equity Tier 1 instruments, or carry out a contingent capital increase, in order to ensure the practical feasibility of converting liabilities into shares or other Common Equity Tier 1 instruments by issuing new shares or other Common Equity Tier 1 instruments. Section 202(3), first sentence, of the Stock Corporation Act and section 55a(1), second sentence, of the Act on Limited Liability Companies do not apply to authorised capital created in implementation of a direction under the first sentence. Authorised capital created in implementation of a direction under the first sentence is not counted towards other authorised capital. Where, despite a direction under the first sentence, a sufficient amount of authorised share capital, authorised registered capital, or other Common Equity Tier 1 instruments is not available, this does not preclude the effectiveness of a resolution order.
(2) In the course of resolution planning, the resolution authority assesses, for the institution or group entity concerned, whether and to what extent it makes use of its power under subsection (1). In doing so, it takes into account, in particular, the resolution tools considered in the course of resolution planning. Where the resolution plan provides for the possibility of applying the creditor participation instrument, the resolution authority examines whether the authorised share capital, the authorised registered capital, or the other Common Equity Tier 1 instruments could be sufficient to cover the amounts referred to in section 96.
(3) Subsection (1) does not apply where particularities specific to the legal form preclude the holding of Common Equity Tier 1 instruments, and the possibility of applying the creditor participation instrument, where the resolution conditions or the conditions of section 65 are satisfied, is ensured by other measures, in particular the direction of a change of legal form under section 149.
(4) The resolution authority may require an institution or group entity to demonstrate to the resolution authority that no impediments to the conversion of liabilities into shares or other Common Equity Tier 1 instruments arise from the founding documents or the articles of association of the institution or group entity, or that such impediments can be overcome, in particular by directing a change of legal form under section 149. Where such impediments nonetheless exist when the creditor participation instrument is applied, they do not preclude the effectiveness of a resolution order.
(5) Where the contractual terms of a liability do not provide for a contractual term within the meaning of section 55(1), this does not prevent the resolution authority from making use of the creditor participation instrument in respect of that liability.