31. Institutions, based on the guidance from resolution authorities, should identify items to be …

Institutions, based on the guidance from resolution authorities, should identify items to be included in the transfer perimeter so that they fit with the assets management company’s (AMC) characteristics as defined by resolution authorities. In this vein, in accordance with Article 42(5), point (c), of Directive 2014/59/EU, resolution authorities should assess whether the transfer is necessary to maximise liquidation proceeds, therefore the AMC business model and exit strategy should not be disregarded. In particular, resolution authorities should ensure that:

• - the transfer perimeter is in line with the AMC business model, if already set up, or consider the business model of an AMC to be set up. AMCs can be designed to be single-asset focused or specialised in a geographical area;
• - especially in the case of an AMC that is expected to absorb portfolios and activities from different institutions, there is coherence between the transfer perimeter and the disposal strategy ensuring the maximisation of the liquidation proceeds, avoiding the destruction of value and triggering scale effects;
• - the transfer perimeter allows, as much as possible, the AMC to reach a critical size in order to benefit from economies of scale. Ideally, the critical size should remain within the proportions of the market in which it operates;
• - the transfer perimeter puts the AMC in a position to recover a long-term value greater than the market value at the valuation date in line with paragraph 32 of these guidelines, which means that portfolios with negative long-term prospects should be considered carefully.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/