Article 2
Conditions regarding capital instruments
1.
For the purposes of Article 1, a CSD shall hold capital instruments that meet all of the following conditions:
(a)
they are subscribed capital within the meaning of Article 22 of Council Directive 86/635/EEC ( 1 );
(b)
they have been paid up, including the related share premium accounts;
(c)
they fully absorb losses in going concern situations;
(d)
in the event of bankruptcy or liquidation, they rank after all other claims in insolvency actions or under the applicable insolvency law.
2.
In addition to the capital instruments that meet the conditions in paragraph 1, a CSD authorised in accordance with point (a) of Article 54(2) of Regulation (EU) No 909/2014 to provide banking-type ancillary services may, in order to meet the requirements in Article 1, use capital instruments that:
(a)
meet the conditions in paragraph 1;
(b)
are ‘own funds instruments’ as defined in point 119 of Article 4(1) of Regulation (EU) No 575/2013;
(c)
are subject to the provisions of Regulation (EU) No 575/2013.
( 1 ) Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372, 31.12.1986, p. 1).