Distributions on instruments
Competent authorities shall grant the prior permission referred to in paragraph 1 only where they consider all the following conditions to be met:
the ability of the institution to cancel payments under the instrument would not be adversely affected by the discretion referred to in paragraph 1, or by the form in which distributions could be made;
the ability of the capital instrument or of the liability to absorb losses would not be adversely affected by the discretion referred to in paragraph 1, or by the form in which distributions could be made;
the quality of the capital instrument or liability would not otherwise be reduced by the discretion referred to in paragraph 1, or by the form in which distributions could be made.
The competent authority shall consult the resolution authority regarding an institution's compliance with those conditions before granting the prior permission referred to in paragraph 1.
Capital instruments and liabilities for which a legal person other than the institution
issuing them has the discretion to decide or require that the payment of distributions
on those instruments or liabilities shall be made in a form other than cash or own funds instruments
shall not be eligible to qualify as Common Equity Tier 1, Additional Tier 1, Tier 2 or eligible liabilities instruments.
may use a broad market index as one of the bases for determining the level of distributions
on Additional Tier 1, Tier 2 and eligible liabilities instruments.
Paragraph 4 shall not apply where the institution is a reference entity in that broad market index unless both the following conditions are met:
the competent authority has not reached a different determination from that referred to in point (a).
shall report and disclose the broad market indices on which their capital instruments and eligible liabilities instruments rely.
EBA shall develop draft regulatory technical standards to specify the conditions according to which indices shall be deemed to qualify as broad market indices for the purposes of paragraph 4.
EBA shall submit those draft regulatory technical standards to the Commission by 28 July 2013.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.