AI Summary of Article 77 Conditions for reducing own funds and eligible liabilities
This document outlines the requirements for institutions regarding the reduction or repurchase of various capital instruments. Prior permission from the competent authority is necessary for the reduction, redemption, or repurchase of Common Equity Tier 1 instruments, as well as alterations to share premium accounts linked to own funds.
Furthermore, institutions must secure clearance from the resolution authority for any actions affecting eligible liabilities instruments that fall outside the specified categories before their contractual maturity dates. Ensuring compliance with these stipulations is crucial for effective regulatory governance.
Article 77 Conditions for reducing own funds and eligible liabilities
1. An institution shall obtain the prior permission of the competent authority to do any of the following:
(a)reduce, redeem or repurchase Common Equity Tier 1 instruments issued by the institution in a manner that is permitted under applicable national law;
(b) reduce, distribute or reclassify as another own funds item the share premium accounts related to own funds instruments;
(c) effect the call, redemption, repayment or repurchase of Additional Tier 1 or Tier 2 instruments prior to the date of their contractual maturity.
2. An institution shall obtain the prior permission of the resolution authority to effect the call, redemption, repayment or repurchase of eligible liabilities instruments that are not covered by paragraph 1, prior to the date of their contractual maturity.