5.4 MIS capabilities

Institutions should be able to submit timely and accurate information to resolution authorities so that they can make informed decisions before, during, and after resolution. Institutions should have adequate Management Information Systems (MIS) and technological infrastructures in order to timely implement the resolution strategy in line with Article 11 of Directive 2014/59/EU.

In accordance with the principle of proportionality and to support the processes referred to in paragraph 75 of these guidelines, institutions should be able, upon request of resolution authorities, to provide granular information regarding the transfer perimeter components and to update the required data for the transfer; the time difference between the cut-off date of the information and the resolution date should be as small as possible. The level of granularity should enable to value the transferred items separately from the remaining items and to allow the resolution authority to decide on the specifics of the separation and the transfer and to identify transfer items in accordance with what is needed for the national implementing act.

Information to identify the core transfer perimeter

Institutions should support the identification of the transfer perimeter with information on the level of individual items (liabilities, assets and rights), including:

• - Mapping of critical functions and core business lines to each item;
• - Classification of items (such as type of assets/liability; counterparty information, and type of collateral);
• - Asset quality and risk indicators (such as PL/NPL classification, RWA and collateral information, high quality liquid asset);
• - Legal aspects (including governing law and recognition of Directive 2014/59/EU transfer powers and any potential contractual impediment to transferability of the relevant instrument);
• - Accounting information (such as carrying amount, off-balance sheet amount and amount of loan loss provision), when relevant.

Resolution authorities should develop expectations in terms of data regarding the transfer and the transfer tools considered to complement the previous paragraph in accordance with the proportionality principle promoted by Directive 2014/59/EU.

In the case of the AST, institutions should develop capabilities to perform a diagnostic exercise as defined by the resolution authority in line with the principles laid down in EBA guidelines on tests, reviews or exercises that may lead to support measures²³ .

Data to assess interconnections

²³ EBA/GL/2014/09.

Institutions, in line with section 4.2 of these guidelines, should also be able to identify:

• - Interconnections safeguarded by Articles 76 to 80 of Directive 2014/59/EU – including: mapping of netting and offset agreements and mapping of secured liabilities and corresponding collaterals.
• - Interconnections, which are not explicitly safeguarded by Directive 2014/59/EU – such as, for instance: mapping of facilities to contract IDs to identify items under the same contract and links between different legal entities such as a letter of comfort.
• - Economic and business connections – such as, for instance: information on hedge and customer relationships; or
• - Litigation risks.

Specific guidance regarding the sale of business tool

In transfer playbooks, institutions should explain how they can swiftly set up a virtual data room containing sufficient information to conduct a buyer due diligence of the transfer perimeter and meet the expectations of the resolution authority’s sal e process.

Institutions are to develop arrangements supporting the production of business plans, which also potentially need to be split between a plan for the transfer portfolio and one for the portfolio remaining in the legacy institution.

MIS to ensure operational continuity

Institutions should demonstrate how the separation, supporting the operational execution of the transfer, can be swiftly implemented in the bank's systems, providing MIS capabilities continuity for the legacy entity as well as the receiving entity (such as, for instance, separation of accounting entries) when foreseen by the resolution strategy and in line with paragraph 81 of these guidelines²⁴ .

Other MIS capabilities

²⁴ As well as with point (11) of the Section C in the Annex of of Directive 2014/59/EU.

MIS should be flexible enough to allow for adjustments to the transferred perimeter post resolution (re-transfers). For instance, such adjustments would need to be seamlessly reflected in the management accounts.