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IFD ToolDelegated Regulation 2021/2155
Article 2

Article 2 - Conditions for classes of Additional Tier 1 instruments

Article 2

Conditions for classes of Additional Tier 1 instruments

Classes of Additional Tier 1 instruments shall comply with the following conditions:

(a)

the provisions governing the instrument shall specify a trigger event for the purpose of Article 9(2), point (e)(iii), of Regulation (EU) 2019/2033;

(b)

the trigger event referred to in point (a) occurs when the Common Equity Tier 1 capital ratio of the investment firm issuing the instrument falls below either of the following:

(i)

7 % of the product of 12,5 multiplied by the own funds requirements calculated in accordance with Article 11(1) of Regulation (EU) 2019/2033;

(ii)

a level higher than the one specified in point (i), where determined by the investment firm or institution issuing the instrument and specified in the provisions governing the instrument;

(c)

one of the following requirements is met:

(i)

the instruments are issued for the sole purpose of being awarded as variable remuneration and the provisions governing the instrument ensure that any distributions are paid at a rate which is consistent with market rates for similar instruments issued either by the investment firm or by investment firms or institutions of comparable credit quality and which in any case is, at the time the remuneration is awarded, no higher than 8 percentage points above the annual average rate of change for the Union as published by the Commission (Eurostat) in its Harmonised Indices of Consumer Prices published pursuant to Article 11 of Council Regulation (EC) No 2494/95 (7);

(ii)

at the time of the award of the instruments as variable remuneration, at least 60 % of the instruments in issuance were issued other than as an award of variable remuneration and are not held by one of the following or by any undertaking that has close links with one of the following:

the investment firm or its subsidiaries;

—

the parent undertaking of the investment firm or its subsidiaries;

—

the parent financial holding company of the investment firm or its subsidiaries;

—

the mixed activity holding company of the investment firm or its subsidiaries;

—

the mixed financial holding company of the investment firm and its subsidiaries.

For the purposes of point (i), where the instruments are awarded to staff members who perform the predominant part of their professional activities outside of the Union and instruments are denominated in a currency issued by a third country, investment firms may use a similar independently-calculated index of consumer prices produced in respect of that third country.

(7)  Council Regulation (EC) No 2494/95 of 23 October 1995 concerning harmonized indices of consumer prices (OJ L 257, 27.10.1995, p. 1).