Article 7a
Multiple distributions constituting a disproportionate drag on own funds
1.
Distributions on Common Equity Tier 1 instruments referred to in Article 28 of Regulation (EU) No 575/2013 shall be deemed not to constitute a disproportionate drag on capital where all of the following conditions are met:
(a)
the dividend multiple is a multiple of the distribution paid on the voting instruments and not a predetermined fixed amount;
(b)
the dividend multiple is set contractually or under the statutes of the institution;
(c)
the dividend multiple is not revisable;
(d)
the same dividend multiple applies to all instruments with a dividend multiple;
(e)
the amount of the distribution on one instrument with a dividend multiple does not represent more than 125 % of the amount of the distribution on one voting Common Equity Tier 1 instrument.
In formulaic form this shall be expressed as:
where:
k shall represent the amount of the distribution on one instrument without a dividend multiple;
l shall represent the amount of the distribution on one instrument with a dividend multiple;
(f)
the total amount of the distributions paid on all Common Equity Tier 1 instruments during a one year period does not exceed 105 % of the amount that would have been paid if instruments with fewer or no voting rights received the same distributions as voting instruments.
In formulaic form this shall be expressed as:
where:
k shall represent the amount of the distribution on one instrument without a dividend multiple;
l shall represent the amount of the distribution on one instrument with a dividend multiple;
X shall represent the number of voting instruments;
Y shall represent the number of non-voting instruments.
The formula shall be applied on a one-year basis.
2.
Where the condition of point (f) of paragraph 1 is not met, only the amount of the instruments with a dividend multiple that exceeds the threshold defined therein shall be deemed to cause a disproportionate drag on capital.
3.
Where any of the conditions of points (a) to (e) of paragraph 1 are not met, all outstanding instruments with a dividend multiple shall be deemed to cause a disproportionate drag on capital.