Question ID
2015_2438
Legal act
Directive 2014/59/EU (BRRD)
Topic
MREL
Article
45, 45a
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n.a.
Type of submitter
Competent authority
Subject matter
Application of MREL to entities defined in Article 1(1)
Question

Do entities referred to in Article 1(1), points (b), (c) or (d) also have to comply with the requirement for own funds and eligible liabilities (MREL)?

Background on the question

Article 45 (6) (b) of Directive 2014/59/EU (BRRD) states “The minimum requirement for own funds and eligible liabilities of each institution pursuant to paragraph 1 shall be determined by the resolution authority, after consulting the competent authority, at least on the basis of the following criteria: […] b. the need to ensure, in appropriate cases, that the institution has sufficient eligible liabilities to ensure that, if the bail-in tool were to be applied, losses could be absorbed and the Common Equity Tier 1 ratio of the institution could be restored to a level necessary to enable it to continue to comply with the conditions for authorisation and to continue to carry out the activities for which it is authorized under Directive 2013/36/EU or Directive 2014/65/EU and to sustain sufficient market confidence in the institution or entity;” Do entities referred to in points b, c or d of Article 1 (1) also have to comply with the requirement of MREL?

Submission date
Final publishing date
Final answer

As regards entities referred to in Article 1(1), points (b) (c) or (d), of Article 1 of Directive 2014/59/EU (BRRD), Articles 45 and 45a to 45i BRRD set out which entities are required to hold MREL and specify whether such entities must hold internal or external MREL. resolution authorities are provided with discretion on whether the MREL requirement should be applied to those entities (see Article 45(7) of Directive 2014/59/EU (BRRD)).

Please see the reply to Q&A 2017­_3205.

Disclaimer:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A

Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Directive 2014/59/EU (BRRD).

Update 02.12.2021: This Q&A has been updated in the light of the changes introduced to Directive 2014/59/EU (BRRD).

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.