On Dec. 27, GE BaFin issued general ruling on cancelled liabilities.
GE BaFin issued a general decree to grant repurchase authorization, to replace the general decree, which was published on Dec. 27, 2020 and was limited to one year.
Follows GE BaFin Dec. 2020 announced rule on liabilities before maturity, see #94307.
Summary
Announcement made according to § 41 paragraph 3 and 4 of administrative procedure act (VwVfG) and with § 17 paragraph 2 of financial services supervision act (FinDAG).
According to article 78a (1), subparagraph 2 of CRR, a resolution authority can grant institutions general permission in advance to terminate, repay or redeem all liabilities.
Detail
Decree authorizes institutions falling under section 2 of decree to terminate, redeem, repay and buy back various instruments and liabilities before the contractual maturity.
This includes those falling within the framework of the minimum requirement own funds and eligible liabilities (MREL) and assets requiring prior approval by GE BaFin.
This permission does not apply to Common Equity Tier 1, additional Tier 1 or Tier 2 instruments, nor to the relevant premium that is associated with equity instruments.
It is aimed at institutions within meaning of art 4 paragraph 1 n. 3 CRR that fall within scope of §1 SAG not falling under responsibility of Single Resolution Board (SRM-VO).
It applies if resolution planning for institution in question has not progressed so far as to achieve MREL or if assessment has suggested that regular insolvency proceedings according to the Insolvency Code are feasible and credible as a resolution strategy.
The decree is subject to revocation in accordance with Section 36 (2) No. 3 VwVfG.
Effectiveness
The general decree is limited to period of one year from publication, on Dec. 28, 2021.
An objection to decree can be lodged with GE BaFin within a month of its notification.
Dec. 2022 Extended Ruling
On Dec. 16, 2022, GE BaFin issued general ruling to extend decree to Dec. 27, 2023.
In 2023, the EU CMSN intends to launch a delegated regulation on basis of a draft regulatory technical standard (RTS) of May 26, 2021, submitted by the EBA, which lays down detailed rules for the procedure for granting a buy-back authorization.
Dec. 2023 Further Extension
On Dec. 20, 2023, GE BaFin issued new general decree in order to extend the general order with which GE BaFin grants repurchase authorization until Dec. 27, 2024.
