SRB guidance on redemption of MREL instruments
On 16 September 2021, the Single Resolution Board (SRB) issued updated guidance on the early redemption of eligible liabilities. The updated guidance specifies the permission regime for the redemption of eligible liabilities to align it with regulatory technical standards (RTS) issued by the European Banking Authority (EBA) on 26 May 2021. The Commission has not yet published the final delegated regulation adopting the contents of the RTS.
The new guidance is applicable as such to significant institutions (SI) under the SRB’s direct remit, and a permission in accordance with the guidance must be sought from the SRB by way of derogation from the deadlines laid out in the draft RTS by 30 September 2021 where an institution intends to redeem eligible liability instruments as from 1 January 2022.
The Financial Stability Authority (FFSA) will provide more detailed instructions to LSIs under its direct remit on the application of the SRB guidance and the EBA’s draft RTS by the end of September.
LSIs with a resolution plan must apply for a permission from the FFSA. In its guidance for LSIs, the FFSA will also specify the deadline for such applications. For the time being, LSIs whose resolution strategy is bankruptcy and investment firms under the FFSA’s remit need not apply for a permission from the FFSA.
SRB approach to prior permissions regime
EBA Draft Regulatory Technical Standards on own funds and eligible liabilities
RVV Bank Resolution Expert Maiju Harava (firstname.surname(at)rvv.fi)