Conversion rate; authorisation to issue statutory instruments

(1) The factor at which a relevant capital instrument, an eligible liability under section 65(4), or a bail-inable liability is converted, in the course of applying the instrument for the participation of holders of relevant capital instruments or the creditor participation instrument (conversion rate), must reflect fair value.
(2) In order to have regard to the principles of section 68(1), the resolution authority, in setting the conversion rate, takes into account the nominal value and the ranking that the claim and the relevant capital instruments would have held in insolvency proceedings.
(3) The Federal Ministry of Finance is authorised to issue, by statutory instrument not requiring the consent of the Bundesrat, more detailed provisions on how affected creditors may be adequately compensated through the conversion rate, including, in particular, on how the priority of senior liabilities under applicable insolvency law may be reflected in the conversion rate. The Federal Ministry of Finance may transfer this authorisation, by statutory instrument, to the resolution authority.