EBA Consults on RTS for Indirect Subscription of MREL Instruments

Today, the EBA launched a public consultation on its draft RTS. The RTS is aimed at specifying the methods to avoid hampering the smooth implementation of the resolution strategy, where instruments indirectly subscribed by the resolution entity for the purpose of meeting the minimum requirement for own funds and eligible liabilities (MREL). These patterns of indirect subscription are also known as “daisy chains of internal MREL”.

The consultation runs until 27 October 2020, and submissions can be made through the consultation page on the EBA website. The EBA will then hold a public hearing on the draft RTS, to take place via conference call on 29 September 2020.

Under these draft RTS, a general deduction framework applies in the general case, and a “fall-back” solution applies where the deduction approach cannot apply.

The draft RTS have been developed in accordance with Article 45f(6) of the BRRD.

FIN. Team