Bail-inable liabilities

(1) The creditor participation instrument applies to all liabilities of an institution or group entity that are neither excluded from the scope of the creditor participation instrument under subsection (2) nor are relevant capital instruments (bail-inable liabilities).
(2) The following liabilities are excluded from the scope of the creditor participation instrument, irrespective of whether they are governed by the law of a Member State or of a third country: 1. covered deposits, up to the coverage level under section 8 of the Deposit Guarantee Act; for deposits under section 8(2) of the Deposit Guarantee Act, this applies only insofar as the depositor substantiates this separately in writing, within a reasonable period set by the resolution authority, with evidence of the facts giving rise to the claim; in setting that period, the depositor is informed of the application of the creditor participation instrument and of the need to separately assert and substantiate the conditions of section 8(2) of the Deposit Guarantee Act; 2. secured liabilities, including liabilities arising from covered bonds, including derivative transactions forming part of the cover pool within the meaning of section 4(3), second sentence, of the Pfandbrief Act, insofar as they are secured or covered at least by the value of the collateral provided for them; the resolution authority may apply the creditor participation instrument under section 90 to the part of a secured liability that exceeds the value of the collateral or cover; 3. liabilities arising from the institution's or group entity's holding of client assets or client funds, provided the client concerned has a right of segregation or a right to separate satisfaction, in insolvency proceedings over the assets of the institution, in respect of the assets or funds managed; this also applies to client assets or client funds held for undertakings for collective investment in transferable securities and alternative investment funds within the meaning of the Capital Investment Code; 4. liabilities arising from a fiduciary relationship between the institution or group entity as trustee and another person as settlor, provided that the settlor would have a right of segregation, in insolvency proceedings, in respect of the trust property; 5. liabilities to other institutions, not belonging to the group of the institution or group entity under resolution, with an original maturity of less than seven days; 6. liabilities with a residual maturity of less than seven days owed to systems within the meaning of section 1(16) of the Banking Act, or to system operators within the meaning of section 1(16a) of the Banking Act, where those liabilities arise from participation in the system, or owed to central counterparties authorised in the European Union under Article 14 of Regulation (EU) No 648/2012, and to third-country central counterparties recognised by the European Securities and Markets Authority under Article 25 of that Regulation; 7. liabilities owed to a) employees, in respect of accrued salary claims, pension benefits, or other fixed remuneration, other than aa) components of variable remuneration that are not governed by a collective bargaining agreement, or, within its scope, by agreement of the parties to the employment contract on the application of the provisions of the collective bargaining agreement, or on the basis of a collective bargaining agreement, in a works or service agreement, and bb) components of variable remuneration agreed in respect of managers and employees within the meaning of section 18(1) of the Remuneration Ordinance for Institutions, as amended, b) trade or commercial creditors, in respect of the supply of goods or services that are critical to the daily functioning of the institution's or group entity's operations, including information technology services, utility services, and the rent, servicing and maintenance of premises, c) deposit guarantee schemes, in respect of contribution obligations; 8. liabilities owed to institutions or group entities that are part of the same resolution group but are not themselves resolution entities, irrespective of their maturity; this does not apply where those liabilities rank, in normal insolvency proceedings, equally with or below liabilities referred to in section 46f(6) and (9) of the Banking Act; in that case, the resolution authority of the subsidiary undertaking concerned, which is not a resolution entity, assesses whether the amount of the items satisfying the requirements of section 49f(2) is sufficient to support the implementation of the preferred resolution strategy.