4. Definition of the transfer perimeter

Resolution authorities should specify methodology for the definition of the entity or entities, business lines or portfolios of assets, rights and/or liabilities to be transferred (“ transfer perimeter ”) , as it remains resolution authorities’ responsibility at the point of resolution.

In the resolution planning phase, institutions should be able to propose a transfer perimeter, as defined in paragraph 10. To this effect, institutions should identify any impediments and propose potential enhancements, and should be able to propose alternative transfer perimeter or amendments to it, aiming at improving the credibility and feasibility of the transfer strategy or tool, as described in the resolution plan.

Institutions should be able, upon request from the resolution authority:

• a) to identify and isolate the components of the transfer perimeter, as defined by and under the guidance of resolution authorities in line with Article 11 of Directive 2014/59/EU; and

b)to test the applicability of the transfer perimeter under different scenarios as communicated by the resolution authorities in accordance with Articles 10.3., 10.7., point (j), and 12.3 of Directive 2014/59/EU.

Resolution authorities, while setting the methodology for the definition of the transfer perimeter in resolution plans, in accordance with Articles 10.1, 10.7., point (j), and 12.3, point (b), of Directive 2014/59/EU, should consider:

• a. the tools’ purposes (as per the resolution strategy defined for the institution) a nd the activities of institutions. Ultimately, the core transfer perimeter should be composed by assets, rights and/or liabilities that are essential or critical to be transferred to comply with the resolution objectives, the regulatory obligations (including protected liabilities under Article 44 of Directive 2014/59/EU or obligations under Article 73 of Directive 2014/59/EU) and the tool purposes ( “ first layer of the transfer perimeter ” ) and its determination should correspond with a list of criteria further refined in section 4.1. below;
• b. the interconnections within the institution. Subject to the previous subparagraph (a), the interconnections that cannot be removed without time-consuming and costly efforts or due to legal restrictions (including those regarding the safeguards stipulated in Article 76 to Article 80 of Directive 2014/59/EU) should be integrated into the transfer perimeter ( “ second layer of the transfer perimeter ” ) in line with section 4.2 below.

Institutions should flag to resolution authorities transferability impediments while applying the transfer perimeter definition to their assets, rights and/or liabilities and propose potential mitigants and solutions. Institutions should work to reduce these impediments over time. The assessment of the transfer impediments should give a special attention to cross-border issues in line with section 4.3.

While setting the methodology for the definition of the transfer perimeter and with the aim to develop a resolution strategy that best achieves the resolution objectives, resolution authorities should consider the possibility to divide the perimeter into different units in order to prepare for different scenarios, cater for a combination of transfer tools, allow different successive transfers and combinations under the same resolution tool or to multiple recipients, which may be needed.

4.1.1 Sale of Business (SoB)

4.2 Assessment of interconnections

4.3 Assessment of cross border aspects