AI Summary of Article 79a Assessment of compliance with the conditions for own funds and eligible liabilities instruments
Institutions are required to evaluate the substantial features of financial instruments rather than merely their legal forms to ensure compliance with regulatory standards outlined in Part Two. This comprehensive assessment must include all related arrangements, even if they are not overtly mentioned in the instrument's terms.
The aim is to ascertain that the cumulative economic impact of these arrangements aligns with the objectives of applicable provisions, thereby promoting effective compliance and risk management within the financial framework.
Article 79a Assessment of compliance with the conditions for own funds and eligible liabilities instruments
Institutions shall have regard to the substantial features of instruments and not only their legal form when assessing compliance with the requirements laid down in Part Two. The assessment of the substantial features of an instrument shall take into account all arrangements related to the instruments, even where those are not explicitly set out in the terms and conditions of the instruments themselves, for the purpose of determining that the combined economic effects of such arrangements are compliant with the objective of the relevant provisions.