10. In relation to the requirement to divest specific assets pursuant to point (d) of Article 17(5) …

In relation to the requirement to divest specific assets pursuant to point (d) of Article 17(5) of Directive 2014/59/EU, the following specifications apply:

• (a) Resolution authorities should consider requiring institutions to divest assets prior to resolution if the resolution strategy requires the sale of these assets and if this sale in resolution would have significant adverse effects on the use or implementation of resolution tools or make it significantly more difficult. If this measure is applied, assets to be divested should be those, the sale of which in the timeframe provided for under the resolution strategy is likely to result in pressure on prices for assets, destruction of value and additional uncertainty and vulnerability of financial markets and other institutions, if these effects can cause significant adverse consequences for the financial systems.
• (b) In addition, resolution authorities should consider applying this measure if the existing asset structure of the institution is likely to have adverse effects on the feasibility or credibility of the resolution strategy. Where the resolution strategy relies on a liquidation of assets to generate liquidity for the continuance of critical functions, resolution authorities should consider requiring institutions to divest assets, which are likely to be illiquid under stressed conditions or at the point of resolution, to increase the proportion of assets which are expected to be more liquid instead. This measure should also be considered in relation to assets which significantly impair the feasibility of the valuation required under Article 36 of Directive 2014/59/EU. Resolution authorities should also consider the risk that assets or funding may be trapped in third countries.
• (c) When applying this measure, resolution authorities should consider the impact of the divestment on the market for the assets concerned, also as a result of divestments required from further institutions.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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