4. Amendments to the Resolvability Guidelines

Paragraph 5 of the Resolvability Guidelines is amended as follows:

‘ 5. These guidelines specify, having regard to Articles 10(5) and 11(1) of Directive (EU) 2014/59²² , the resolution tool-specific actions that institutions including entities referred to in Article 1(1) (“institutions”), and resolution authorities should take to improve resolvability of institutions, groups and resolution groups in the context of the resolvability assessment performed by resolution authorities according to Articles 15 and 16 of that Directive. ’

²² Directive of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ L 173 12.6.2014, p. 190).

Paragraph 7 of the Resolvability Guidelines is amended as follows:

‘ 7. These guidelines do not apply to institutions whose resolution plan, or the resolution plan of the group to whom they belong, provides that they are to be wound up in an orderly manner in accordance with the applicable national law . In case of a change of strategy, in particular from liquidation to resolution, the guidelines apply no later than three years from the date of the approval of the resolution plan with the new resolution strategy, with the exception of section 4.6, which applies no later than one year from that date .’

Paragraph 10 of the Resolvability Guidelines is amended as follows:

‘ 10. For institutions that are part of a group subject to consolidated supervision pursuant to Articles 111 and 112 of Directive 2013/36/EU, the guidelines apply at the level of each resolution group and, where relevant, at the individual level too. Section 4.6 and section 4.7 apply also at the level of cross-border subsidiaries that are non-resolution entities, where the minimum requirement for own funds and eligible liabilities as laid down in Article 45f of Directive 2014/59/EU exceeds the amount sufficient to absorb losses in accordance with point (a) of the first subparagraph of Article 45c(2) of that Directive.

The title of section 3 of the Resolvability Guidelines is amended as follows:

‘ 3. Implementation and transitional provisions ’

After paragraph 13 of the Resolvability Guidelines, new paragraphs 13a, 13b and 13c are added as follows:

‘ 13a. Institutions should submit to the resolution authorities the first self-assessment report referred to in paragraph 124 by 31 December 2024.

13b. By derogation of paragraph 132, resolution authorities should communicate the first resolvability testing programme referred to in paragraph 130 by 31 December 2025.

13c. Institutions referred to in paragraph 138 should submit to the resolution authorities the first master playbook referred to in that paragraph, by 31 December 2025. ’

Paragraph 56, subparagraph (e), is amended as follows:

‘ e. signing off on the main deliverables and ensuring adequate delegation arrangements in this respect, as part of appropriate internal control and assurance mechanisms (such as the resolu-tion reporting templates and self-assessment report); ’ .

After section 4.5, new sections 4.6, 4.7 and 4.8 with paragraphs 124 to 129, 130 to 137 and 138 to 142, respectively, are inserted in the Guidelines as follows:

124. Institutions should at least every two years prepare and submit to the relevant resolution authority a report, where they self-assess whether they meet, and to what degree, the capa-bilities set out in section 4.1 to 4.5 and 4.8 of these guidelines, and in sections 4 and 5 of the Guidelines on transferability to complement the resolvability assessment for transfer strategies (Transferability Guidelines)²³ , and taking into account any feedback received from authorities within the two years, including inter alia the following elements:

• a. Degree in which the capability is met (low, medium, high, not applicable);
• b. Description of how the capability is met or why it is deemed not applicable under point a;
• c. Gap assessment on the resolvability capabilities as set out in these guidelines and those of the institution, on how this gap can be addressed and by when;
• d. Description of how the capability is embedded in business as usual (BAU);
• e. Description of how the capability relates to the recovery planning of the institution (e.g. do operational continuity in resolution arrangements also support recovery options such as disposals, or are recovery arrangements leveraged to support res-olution);
• f. Any internal or external assessment performed on how these guidelines have been applied by the institution, including internal or external audit reports, external con-sultant assessments, dry runs or supervisory reviews;
• g. Any additional topic set out by the relevant resolution authority (e.g. lessons learnt from recent downturn or market event).

125. In the executive summary of their self-assessment set out in paragraph 124, institutions should:

• a. set out their understanding of the resolution strategy as identified by the resolu-tion authority, and of their role and that of the authority(ies) in the execution of that strategy;
• b. describe their testing and assurance framework that allows them to ensure their capacity to support the execution of the resolution strategy on a continued basis;
• c. summarise their self-assessment by key resolvability areas as follows:
• i. Governance;
• ii. Operational continuity in resolution (OCIR) and access to FMIs²⁴ ;
• iii. Loss absorbing and recapitalisation capacity;
• iv. Liquidity and funding in resolution;
• v. MIS²⁵ ;
• vi. Communication;
• vii. Transferability and restructuring.

126. Reports should be submitted by institutions to the resolution authority at least every two years. The first report should be submitted by 31 December 2024.

127. In the context of cross-border resolution groups, the self-assessment report should either be reported by the resolution entity to the group-level resolution authority (or the relevant resolution authority in the case of an MPE strategy) or by the non-resolution entity to the local resolution authority.

128. When produced, the self-assessment of the non-resolution entity should be developed on the basis of the group resolution strategy and in coordination with the resolution entity.

129. For the purpose of the self-assessment report referred to in paragraph 124, institutions should follow the format provided by their resolution authority.

²³ Guidelines EBA/GL/2022/11 for institutions and resolution authorities to complement the resolvability assessment for transfer strategies (Transferability Guidelines).

²⁴ Financial market infrastructures.

²⁵ Management information systems.

130. Resolution authorities should, having regard to the self-assessment report referred to in section 4.6, and in particular to elements requested under 124 (d-f), adopt a multi-annual re-solvability testing programme for institutions under their remit. The programme should include all the capabilities set out in these guidelines and the EBA Transferability Guidelines²⁶ .

131. It should cover a period of three years (the last two being indicative) to allow institutions to optimise their resolution planning efforts. It should be updated/confirmed by the resolution authority annually. The outcome of its annual review should be notified to the institutions with-out undue delay.

132. Resolution authorities should communicate to institutions the resolvability testing pro-gramme referred to in paragraph 130 and its annual updates or confirmations as referred to in paragraph 131, at the latest along with the summary of the resolution plan and resolvability assessment as per Article 10(7)(a) of Directive 2014/59/EU.

133. The resolution authorities should, having regard to the non-exhaustive list set out in Annex 4, set out in the resolvability testing programme (referred to in paragraph 130) the range of assessments, tests, methodologies, practices and tools that they intend to use in order to test the adequacy of the arrangements put in place by institutions to support the execution of their resolution strategy.

134. When considering the choice of testing techniques in their resolvability testing programme set out in paragraph 130, resolution authorities should follow a risk-based approach on the basis of institutions’ risk profile, size and business model (e.g. SREP categori sation²⁷ ), and over-all SREP score²⁸ and consider the following:

• a. The progress on resolvability / degree up to which resolvability capabilities set out in these guidelines are met; and
• b. The overall quality of internal resolvability assurance work evidenced in the self-assessment report.

135. In the context of cross-border resolution groups, the multi-annual resolvability testing pro-gramme should be discussed between the group level resolution authorities and the resolution authorities of the subsidiaries that are subject to these guidelines.

136. In the case of cross-border groups, the multi-annual resolvability testing programme of the resolution entities, including the tests under it, should be carried out either by the resolution authority of the resolution entity or the host resolution authorities in coordination with the resolution authority of the resolution entity – as agreed between them.

137. Resolution authorities should share, with the institution and, in the case of cross-border group, at least with the members of the resolution college, the results of any tests carried out in accordance with the resolvability testing programme referred to in paragraph 130.

²⁶ EBA/GL/2022/11.

²⁷ ‘ SREP categorisation ’ means the indicator of the institution’s systemic importance assigned based on the institution’s size and complexity and the scope of its activities. See also section 2.1.1 of the revised EBA SREP GL (EBA/GL/2022/03).

²⁸ See definition in the revised EBA SREP GL (EBA/GL/2022/03) p. 21. ‘Overall SREP score’ means the numerical indicator of the overall risk to the viability of the institution based on the overall SREP assessment.

138. The Union parent undertaking and the resolution entities of a resolution group that is either subject to Article 92a or 92b of Regulation (EU) No 575/2013 or has total assets at the level of the resolution group exceeding EUR100 billion, and those designated by the relevant resolution authority that are not subject to Article 92a of Regulation (EU) No 575/2013 and which are part of a resolution group the total assets of which are lower than EUR 100 billion but which the resolution authority has assessed as reasonably likely to pose a systemic risk in the event of its failure in accordance with Article45c(6) of Directive 2014/59/EU, should develop a master play-book.

139. The master playbook should be requested from institutions other than those designated in paragraph 138 when the RA assesses that it is justified by the complexity of the organisation and the consequent need for a high degree of coordination of resolvability capabilities.

140. The master playbook should²⁹ :

• a. define key roles and responsibilities of senior management in the run-up to and during resolution;
• b. set out the matter and timeframes on which decisions should be made by the man-agement in the run-up and into resolution;
• c. set out the triggers for the activation of sub-playbooks (bail-in playbook, transfer playbook, contingency plans for access to FMIs, communication);
• d. set out the source, deadlines and format of information sources that will support these decisions by the board;
• e. demonstrate how the various elements of the execution of the resolution strategy interact with each other and, in particular, the following:
• i. Bail-in execution (bail-in playbook);
• ii. Transfer playbook (where relevant);
• iii. Valuation;
• iv. Funding and liquidity in resolution (including collateral monitoring / fund-ing in resolution strategy);
• v. Access to FMIs (including contingency plans);
• vi. Operational continuity (including service catalogue);
• vii. Business reorganisation plan.

141. Institutions should update their master playbooks at least annually or after a change to their legal or organisational structure or a change to their operational or financial conditions which could have a material effect on, or necessitates a change to, the master playbook. The outcome of its annual review should be notified to resolution authorities without undue delay. 142. After Annex 3 of the Resolvability Guidelines, Annexes 4 and 5 are inserted as follows:

²⁹ Annex 5 provides a high-level description of the master playbook architecture.