Subsection 6: Resolution measures

I.-When a person finds itself in the situation referred to in III of Article L. 613-56, the resolution college, after obtaining the opinion of the supervisory college, shall examine without delay whether it is appropriate to exercise the power referred to in that paragraph to prohibit or limit certain distributions, taking into consideration all of the following elements:

1° The reason, duration and extent of the lack of compliance, as well as its i mpact on the assessment referred to in I of Article L. 613-41; 2° The evolution of the financial situation of the resolution entity and the risk that its failure will be confirmed or foreseeable in the near future within the meaning of II of Article L. 613-41; 3° The financial situation of the resolution entity and the risk that its failure will be confirmed or foreseeable in the near future within the meaning of II of Article L. 613-56. 613-41 ;

2° The development of the financial situation of the resolution entity and the risk that its failure will be confirmed or foreseeable in the near future within the meaning of II of Article L. 613-48 ;

3° The prospect that the resolution entity will or will not be able to meet its minimum capital requirement and eligible commitments within a reasonable timeframe;

4° Where the resolution entity is unable to replace commitments that no longer meet the eligibility or maturity criteria mentioned in Article R. 613-46-1, the reasons for this impossibility, and in particular whether it is due to circumstances specific to the resolution entity or to a market-wide disturbance;

5° An assessment of the appropriateness and proportionality of the use of the power referred to in III of Article L. 613-56 with regard to the situation of the resolution entity, taking into account in particular its impact both on the financing conditions of the entity concerned and on the assessment referred to in I of Article L. 613-41.

II.The power referred to in III of Article L. 613-56 consists of prohibiting or limiting the following transactions:

1° Making a distribution in relation to the original own funds defined in Article 26 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 ;

2° Create an obligation to pay discretionary pension benefits or variable remuneration or to pay such pensions or remuneration, unless the obligation to pay arose at a time when the resolution entity complied with the overall capital buffer requirement;

3° Make payments linked to additional own funds instruments defined in Article 51 of Regulation (EU) No 575/2013 referred to above.

III - As long as the resolution entity remains in the situation referred to in III of Article L. 613-56, the resolution college shall reassess, at least every month, whether it is appropriate to exercise the power referred to in III of Article L. 613-56.

IV.If the resolution college finds that the person is still, nine months after the person alerted it, in the situation referred to in III of Article L. 613-56, it shall exercise the power referred to in that same III, after obtaining the opinion of the supervisory board, unless it finds that at least two of the following conditions have been met:

1° The lack of compliance is due to serious disruptions in the functioning of the financial markets which lead to significant tensions in several segments of the financial markets;

2° These disruptions lead to greater volatility in the prices of the person's own funds instruments and eligible commitments or to an increase in its costs, as well as to a total or partial closure of the markets preventing it from issuing own funds instruments and eligible commitments on these markets;

3° The closure of markets referred to in 2° is observed not only for the person concerned, but also for several other persons;

4° The disruptions referred to in 1° prevent the person concerned from issuing sufficient capital instruments and eligible commitments to remedy the lack of compliance with the provisions of II of Article L. 511-41-1 A;

5° The exercise of the power referred to in III of Article L. 613-56 leads to contagion effects for part of the banking sector that are likely to undermine financial stability.

V.-When, for one of the reasons mentioned in IV of this article, the resolution college decides not to exercise the power mentioned in III of Article L. 613-56, it shall inform the supervisory college and justify its decision in writing.

VI - The collège de résolution shall reassess the decision referred to in V on a monthly basis in order to determine whether the conditions referred to in IV continue to apply.