Reduction and removal of impediments to resolvability at institutions; authorisation to issue statutory instruments

(1) Where the resolution authority determines, in its assessment under sections 57 and 58, that material impediments to the resolvability of the undertaking exist, it notifies the undertaking concerned and the authorities involved under section 57(1) of this in writing, stating the time limit under subsection (2).
(2) Within four months of receiving a notification under subsection (1), the undertaking must propose to the resolution authority suitable measures capable of removing or reducing the impediments to resolvability referred to in the notification under subsection (1). Where a material impediment to resolvability is attributable to one of the following situations, the undertaking proposes to the resolution authority, within two weeks of receiving a notification under subsection (1), possible measures and a timetable for their implementation, to ensure that the undertaking complies with the requirements under section 49e or section 49f and with the combined capital buffer requirement:
1. the undertaking meets the combined capital buffer requirement when it is considered in addition to the requirements referred to in section 10i(1a), points 1 to 3, of the Banking Act, but does not meet the combined capital buffer requirement when it is considered in addition to the requirements under sections 49c and 49d, insofar as these are calculated under section 49(2), point 1, or
2. the undertaking does not meet the requirements under Articles 92a and 494 of Regulation (EU) No 575/2013 or the requirements under sections 49c and 49d. The timetable for implementing the measures proposed under the second sentence must have regard to the reasons for the material impediment.
(3) The resolution authority assesses, after consulting the supervisory authority, whether the measures proposed under subsection (2) are suitable to remove or reduce the impediments to resolvability.
(4) Where the resolution authority's assessment concludes that the proposed measures are suitable to remove, or at least reduce, the impediments to resolvability in question, the resolution authority directs that the undertaking implement the measures proposed under subsection (2) without delay. Otherwise, the resolution authority directs that the undertaking implement other alternative measures specified by the resolution authority to remove or reduce the impediments to resolvability in question, and, in connection with that direction, sets out why it considers the measures proposed by the undertaking unsuitable to remove the impediment to resolvability. The undertaking prepares, within one month, a plan setting out how the measures specified by the resolution authority are to be implemented.
(5) The alternative measures to be directed by the resolution authority under subsection (4), second sentence, must be necessary and proportionate to reduce or remove the impediments to resolvability in question, and must have regard to the threat that those impediments to resolvability pose to financial stability, as well as to the effect of the alternative measures on the undertaking's business, its stability, and its ability to contribute to the economy.
(6) The resolution authority may, subject to subsection (5), direct the undertaking to implement one or more of the following measures:
1. the conclusion or amendment of intragroup financial support agreements;
2. the conclusion of service agreements to ensure the continuity of critical functions;
3. the limitation of maximum individual and aggregate risk positions; this applies, without prejudice to the provisions on large exposures, also to bail-inable liabilities owed to other undertakings, unless they are liabilities owed to a group entity;
4. the fulfilment, at regular or irregular intervals, of additional information obligations relevant for the purposes of resolution planning;
5. the divestment of specific assets;
6. the limitation or discontinuation of the development of existing or planned business activities, or of the sale of new or existing products;
7. changes to the legal or operational structures of the undertaking, or of a group undertaking directly or indirectly under its control, in order to reduce complexity and to ensure that critical functions can be legally and operationally separated from other functions through the application of resolution tools;
8. the establishment of an EU parent financial holding company, an EU parent mixed financial holding company, or an EU financial holding company; 8a. the submission of a plan for achieving compliance with the requirements referred to in section 49e or section 49f, expressed as a percentage of the total risk exposure amount calculated under Article 92(3) of Regulation (EU) No 575/2013, and, where applicable, the combined capital buffer requirement and the requirements referred to in section 49e or section 49f, expressed as a percentage of the total exposure measure under Articles 429 and 429a of Regulation (EU) No 575/2013;
9. the issuance of eligible liabilities in order to meet the requirements of section 49e or section 49f, or the taking of alternative measures to meet the minimum requirement for own funds and eligible liabilities under section 49e or section 49f; alternative measures include, in particular, seeking to renegotiate the terms of any outstanding eligible liabilities, Tier 1 capital, or Tier 2 capital instruments, with a view to ensuring that decisions of the resolution authority are recognised under the applicable law; 9a. changing the maturity profile of own funds instruments, subject to the resolution authority's consent, and of eligible liabilities under sections 49c and 49f(2), point 1, in order to ensure ongoing compliance with the requirements under section 49e or section 49f; and
10. where an undertaking is a subsidiary undertaking of a mixed holding company, the establishment, by the mixed holding company, of a separate financial holding company to control the undertaking, insofar as necessary to facilitate the resolution of the undertaking and to prevent the application of the resolution tools and powers under Part 4 from having an adverse effect on the parts of the group not operating in the financial sector.
(7) The resolution authority should direct measures under subsection (6), points 5 to 7, only where the undertaking has again been given the opportunity to propose measures to remove the impediments to resolvability, and the resolution authority assesses the proposed measures as unsuitable to effectively remove the impediments to resolvability.
(8) Before requiring a measure under subsection (4), second sentence, the resolution authority examines, after consulting the supervisory authority, the Deutsche Bundesbank, and, where applicable, jointly with the authority entrusted with conducting macroprudential policy under Recommendation B(1) of the Recommendation of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of national authorities (ESRB/2011/3) (OJ C 41, 14.2.2012, p. 1), the potential effects of the measure concerned on
1. the undertaking concerned,
2. the internal market for financial services, and
3. financial stability in other Member States and the Union as a whole.
(9) Subsection (4), second sentence, and subsections (5) and (6) apply correspondingly where the undertaking does not submit proposals within the four-month period under subsection (2).
(10) In the case referred to in subsection (1), the resolution authority's obligation to prepare a resolution plan under section 40 is suspended to the extent and for as long as the procedure under subsection (4), including its corresponding application under subsection (8), has not been concluded and the impediments concerned have not been removed or at least reduced.
(11) The Federal Ministry of Finance is authorised to issue, by statutory instrument not requiring the consent of the Bundesrat, more detailed provisions on the conclusion or amendment of intragroup financial support agreements, the conclusion of service agreements to ensure the continuity of critical functions, the limitation of maximum individual and aggregate risk positions, the fulfilment of additional information relevant for the purposes of resolution measures, the divestment of assets, the limitation or discontinuation of the development of existing or planned business activities or of the sale of new or existing products, changes to the legal or operational structures of the undertaking or of a group undertaking directly or indirectly under its control, the establishment of an EU parent financial holding company, an EU parent mixed financial holding company, or an EU financial holding company, the submission of a plan for achieving compliance with the requirements referred to in section 49e or section 49f, the issuance of eligible liabilities, the change to the maturity profile of own funds instruments, and the establishment of a separate financial holding company by a mixed holding company to control the undertaking, within the meaning of the conditions set out in subsection (6) under which the respective measures may be directed. The Federal Ministry of Finance may transfer this authorisation, by statutory instrument, to the resolution authority.