What is Act No. 374 / 2015 Coll.?

Act No. 374 / 2015 Coll., on Financial Market Recovery and Resolution — Financial market recovery and crisis management law.

When it became Act No. 374 / 2015 Coll. effectiveness?

Act No. 374 / 2015 Coll. became effective 01.01.2016.

Is Act No. 374 / 2015 Coll. still valid?

Yes, Act No. 374 / 2015 Coll. is still valid and effective.

Act No. 374 / 2015 Coll.

Financial market recovery and crisis management law

Valid Law Effective from 01.01.2016

ČÁST PRVNÍ § 1 § 2 § 3 § 4 § 5 § 6 § 7 ČÁST DRUHÁ HLAVA I Díl 1 § 8 Díl 2 § 9 § 10 § 11 § 12 § 13 § 14 § 15 § 16 HLAVA II Díl 1 § 17 § 18 Díl 2 § 19 § 20 § 21 HLAVA III Díl 1 § 22 Díl 2 § 23 Díl 3 § 24 § 24a § 25 Díl 4 § 26 Díl 5 § 26a HLAVA IV § 27 § 28 § 29 § 30 § 31 § 32 § 33 § 34 § 35 § 36 ČÁST TŘETÍ § 37 § 38 § 39 § 40 § 41 § 42 § 43 § 44 § 45 § 46 § 47 § 48 § 49 § 50 § 51 ČÁST ČTVRTÁ § 52 § 53 § 54 § 55 § 56 § 57 § 58 ČÁST PÁTÁ HLAVA I § 59 HLAVA II § 60 § 61 § 62 § 63 § 64 HLAVA III § 65 § 66 § 67 § 68 § 69 § 70 § 71 HLAVA IV § 72 § 73 § 74 HLAVA V § 74a § 74b ČÁST ŠESTÁ HLAVA I § 75 § 76 § 77 § 78 § 80 § 81 HLAVA II § 81a § 81b § 81c HLAVA III Díl 1 § 82 § 83 § 84 § 85 § 85a Díl 2 § 86 § 87 § 88 § 89 § 90 § 91 Oddíl 1 § 92 Oddíl 2 § 93 § 94 § 95 Díl 3 § 96 § 97 § 98 § 99 § 100 § 101 Díl 4 § 102 § 103 § 104 § 105 § 106 § 107 § 108 § 109 § 110 § 111 § 112 Díl 5 § 113 § 114 § 115 § 116 § 117 § 118 § 119 Díl 6 Oddíl 1 § 120 § 121 § 122 § 123 § 124 § 125 § 126 Oddíl 2 Pododdíl 1 § 127 § 127a § 127aa § 127b § 127ba § 127c Pododdíl 2 § 128 § 128a § 128b § 128c § 128d § 129 § 129a § 129b § 129c § 129d Pododdíl 3 § 130 § 130a § 131 § 131a § 131b § 131c Pododdíl 4 § 132 § 132a § 132b § 133 § 134 § 135 Pododdíl 5 § 136 § 136a § 136b Pododdíl 6 § 137 Pododdíl 7 § 137a Oddíl 3 § 138 § 139 § 140 § 141 § 142 § 143 § 144 Oddíl 4 § 145 § 146 § 147 Oddíl 5 § 148 § 149 § 149a Oddíl 6 § 150 § 151 § 152 § 153 § 154 § 155 § 156 Díl 7 § 157 § 158 § 159 § 160 § 161 § 162 § 163 Díl 8 § 164 § 164a § 165 Díl 9 § 166 § 167 Díl 10 § 168 § 169 Díl 11 § 170 § 171 § 172 § 173 HLAVA IV Díl 1 § 174 § 175 § 176 Díl 2 § 177 Díl 3 § 178 ČÁST SEDMÁ HLAVA I § 179 HLAVA II Díl 1 § 180 § 181 § 182 Díl 2 § 183 HLAVA III Díl 1 § 184 Díl 2 § 185 § 186 § 187 § 188 § 189 Díl 3 § 190 § 191 § 192 § 193 ČÁST OSMÁ Díl 1 § 194 Díl 2 § 195 § 196 Díl 3 § 197 ČÁST DEVÁTÁ HLAVA I § 198 § 199 § 200 § 201 § 202 § 203 § 203a § 204 § 205 § 206 § 207 § 208 HLAVA II § 209 § 210 § 211 § 212 § 213 § 214 § 215 § 215a § 215b § 216 § 217 § 218 § 219 § 220 § 221 ČÁST DESÁTÁ § 222 § 223 § 224 § 225 § 226 § 227 § 228 § 229 § 230 ČÁST JEDENÁCTÁ § 231 § 232 § 233 § 234 § 235 § 236 § 237 § 237a § 237b § 241 § 242 ČÁST DVANÁCTÁ HLAVA I § 243 Díl 1 § 244 § 245 § 246 § 247 § 248 Díl 2 § 249 § 250 § 250a § 250b § 250c § 250d § 250e § 250f § 250g § 250h § 250i § 251 § 251a HLAVA II § 252 § 253 § 254 § 255 ČÁST TŘINÁCTÁ § 256

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374

THE LAW

of 10 December 2015

on financial market recovery and resolution procedures

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

INTRODUCTORY PROVISIONS

§ 1

Subject matter

This law incorporates the relevant European Union1), following the directly applicable European Union2), and in the field of the financial market

(a) recovery plans and procedures;

(b) crisis management planning;

(d) procedures in the event of default of the debtor or group failure;

(e) crisis management financing;

(f) cross-border cooperation and procedures applied therein; and

(g) obligations for the sale of subordinated eligible liabilities.

§ 2

Definition of certain terms

(1) For the purposes of this Act:

(a) the resolution measures exercise the powers under § 82, § 83 (1), § 84 (1), § 85 (1) and (2), the introduction of a resolution authority under § 86 to 95, the transfer of activity to a private acquirer under § 96 to 101, the transfer of activity to a bridge institution under § 102 to 112, the transfer of activity to an asset management person under § 113 to 119, the write-off or conversion of depreciable liabilities under § 120 to 126 and § 138 to 156, the government stabilisation instrument under § 157 to 163 and the exercise of supplementary powers under § 164 and 164a;

(b) an institution as referred to in point (1) of Article 4 (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council and a person as referred to in point (22) of Article 4 (1) of Regulation (EU) 2019 / 203332 of the European Parliament and of the Council, which shall have a minimum initial capital of at least EUR 750 000; institutions are not entities referred to in Article 2 (5) of Directive 2013 / 36 / EU;

(c) the financial institution is the person referred to in Article 4 (1) (26) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council who is the controlled entity of the institution or person referred to in points (g), (h) or (i) and is subject to supervision on a consolidated basis;

(d) the controlled person referred to in point (16) of Article 4 (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(e) a significant controlled entity of a significant subsidiary pursuant to Article 4 (1) (135) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(f) controlling the parent undertaking referred to in Article 4 (1) (15) (a) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(g) a financial holding person, as referred to in point (20) of Article 4 (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(h) a mixed financial holding person, as referred to in Article 4 (1) (21) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(i) the mixed person holding the person referred to in Article 4 (1) (22) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(j) a European financial holding person as referred to in Article 4 (1) (31) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(k) a European mixed financial holding person as referred to in Article 4 (1) (33) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(l) a European Controlling Institution, pursuant to Article 4 (1) (29) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(m) a European controlling person, a European controlling institution, a European financial holding person or a European mixed financial holding person;

(n) a group of controlling persons and persons controlled by them;

(o) the European Financial Group, the European Controlling Person and its Controlled Institutions and Financial Institutions;

(p) a person subject to resolution who is a legal person established in a Member State against whom the group resolution plan envisages the application of resolution measures or an institution which is not part of a group subject to supervision on a consolidated basis, against which the resolution plan envisages the application of resolution measures;

(q) a group subject to resolution and controlled persons who are not:

1. persons subject to resolution;

2. persons controlled by another person subject to resolution; or

3. persons established in a Member State other than a Member State who are not part of a group subject to resolution under the resolution plan and those controlled by them;

(r) resolution strategies a set of resolution measures as set out in the resolution plan or group resolution plan;

(s) public aid, in accordance with Article 107 of the Treaty on the Functioning of the European Union, or other public financial aid at a transnational level, which is granted for the purpose of protecting or restoring the operation, liquidity or solvency of the obliged entity or group of which the debtor is a member, and which, if granted at national level, would be considered as public aid under Article 107 of the Treaty on the Functioning of the European Union,

(t) a statutory body, supervisory board, supervisory board or other body having similar powers depending on the legal form of the person;

(u) the essential activity of a obliged entity whose interruption in one or more Member States would be likely to jeopardise the provision of services of major economic importance or to threaten financial stability, in particular because of its difficult substitutability or substitutability, taking into account the size, market share, external or internal interconnection or cross-border activities of the institution or group;

(v) a CCP pursuant to Article 2 (1) of Regulation (EU) No 648 / 2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories;

(w) emergency liquidity assistance from the Czech National Bank providing funds to the Czech National Bank or any other assistance that may result in an increase in the amount of claims of the Czech National Bank, a solvent obligor or a group of solvent obligors facing temporary liquidity problems without such an operation being carried out in the context of the exercise of monetary policy;

(x) a branch of a branch pursuant to Article 4 (1) (17) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(y) a significant branch of a branch in the territory of a Member State which has been designated as significant in accordance with European Union3.

(2) Furthermore, for the purposes of this Act:

(a) crisis prevention measures pursuant to Article 11 (6), measures to eliminate obstacles to resolution eligibility pursuant to Articles 23 and 24, measures under Articles 37 to 40, write-offs and conversions of capital instruments and intra-group eligible liabilities pursuant to Articles 60 and 61 and reductions in Common Equity Tier 1 items under Article 65;

(b) a systemic crisis of disruption of the financial system with possible serious negative effects on the internal market and the national economy;

(d) a bond bond under the law governing bonds;

(e) covered bond bond under Section 28 of the bond law,

(f) the instrument of participation of a shareholder in a commercial corporation, a security with which the share of the capital or voting rights in a commercial corporation is linked, a security issued by a commercial corporation with which the right to obtain a security linked to the share of the capital or voting rights in a commercial corporation and a separately transferable right associated with such a security;

(g) own funds as referred to in Article 4 (1) (118) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(h) Common Equity Tier 1 own funds calculated in accordance with Article 50 of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(i) a Common Equity Tier 1 instrument which meets the conditions laid down in Article 28 (1) to (4), Article 29 (1) to (5) or Article 31 (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(j) a Additional Tier 1 instrument that meets the conditions laid down in Article 52 of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(k) a Tier 2 instrument that meets the conditions laid down in Article 63 of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(l) deductible Additional Tier 1 instruments and Tier 2 instruments;

(m) an eligible undertaking which fulfils the conditions laid down in § 127ba (2), § 128 or 130;

(n) an intragroup eligible liability fulfilling the conditions laid down in Article 130, including liabilities not meeting the minimum maturity condition of the obligation under Article 72c (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(o) by a subordinated eligible undertaking a deductible liability fulfilling the conditions laid down in Article 72a, with the exception of Article 72b (3) to (5) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(p) the secured debt, where someone has given the creditor or in his favour the property security that the debtor will meet his debt, and a bond satisfying the conditions laid down in Paragraph 17 (2) (c) of Decree No 243 / 2013 Coll., on the investment of investment funds and on the techniques for their management,

(q) the authorisation to operate a bank licence and the approval of a financial holding person and a mixed financial holding person under the law governing the activities of banks, the authorisation to operate as a savings and credit cooperative under the law governing the activities of savings and credit cooperatives and the authorisation to operate as a securities dealer under the law governing business on the capital market,

(r) a very small, small and medium-sized enterprise of an entrepreneur whose annual turnover does not exceed EUR 50 000 000;

(s) a derivative derivative as referred to in Article 2 (5) of Regulation (EU) No 648 / 2012 of the European Parliament and of the Council;

(t) insured by a deposit claim insured by a deposit claim under the law governing the activities of banks;

(u) persons in senior management of a natural person having executive functions in an institution and being responsible to the management body for the day-to-day management of the institution;

(v) person subject to liquidation by a legal person

1. with its head office in a Member State against which a resolution plan or group resolution plan, if that person is a member of a European financial group, assumes that its failure will be dealt with by liquidation or procedures under the insolvency law or comparable foreign law; or

2. against which group resolution plan, if that person is a member of a group subject to resolution and is not a person subject to resolution, does not provide for the exercise of the power to write-down and convert pursuant to Paragraph 60 or a comparable provision of foreign law.

(3) Furthermore, for the purposes of this Act:

(a) a consolidated basis for the consolidated situation referred to in Article 4 (1) (47) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(b) the resolution authority, the authority entrusted with the exercise of resolution powers in the financial market;

(c) the group resolution authority is a resolution authority in a Member State whose supervisory authority is the consolidating supervisor;

(d) a global systemically significant institution of a global systemically significant institution pursuant to Article 4 (1) (133) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council;

(e) a combined buffer of capital under the law governing the activities of banks, the law governing the activities of savings and credit cooperatives or the law governing the business on the capital market;

(f) a requirement for subordination to require a resolution person to comply with part of the minimum requirement through own funds, subordinated eligible liabilities or liabilities of the controlled person pursuant to § 128a;

(g) the risk of excessive leverage as referred to in Article 4 (1) (94) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council.

(4) For the purposes of this Act, the financing agreement means in particular:

(a) the contract to which securities are subject, including:

1. contracts for the purchase, sale or lending of a security, group or index of securities;

2. Securities or group or index options,

3. repurchase transactions or reverse repurchase transactions in any of those securities, groups or indices;

(b) a contract the object of which is an instrument the value of which relates to commodities, including:

1. contracts for the purchase, sale or lending of a commodity or commodity group or index for future delivery;

2. options on commodities or commodity group or index;

3. repurchase transactions or reverse repurchase transactions in any of these commodities, groups or indices;

(c) futures, forwards and non-commodity purchase contracts, contracts for the sale or transfer of a commodity or property of any other type, service, right or interest at a specific price at a future date;

(d) the swap agreement, including:

1. options relating to interest rates, spot or other agreements on foreign exchange transactions, currency agreements, equity index and shares, bond index or debt securities, commodity indices or commodities, weather conditions, emissions or inflation;

2. all-income swaps, credit spread swaps or credit swaps;

3. any agreement or transaction similar to any swap agreement referred to in points (a) (1) and (2) which is retraded on swap or derivative markets;

(e) an interbank credit agreement covering loans with a maturity of 3 months or less;

(f) the framework agreement for the contract or agreement referred to in points (a) to (e).

(5) The provisions of this Securities Act shall also apply to book-entry securities, unless this excludes their nature or this law.

§ 3

Compulsory persons

(1) For the purposes of this Act, a compulsory person means a person with a registered office in the Czech Republic who is:

(a) institutions;

(b) a financial institution;

(2) The person referred to in paragraph 1 who has been authorised under Article 14 of Regulation (EU) No 648 / 201233 of the European Parliament and of the Council is not a compulsory person under this law.

§ 4

Failure

(1) The mandatory person fails if:

(a) it fulfils the conditions for the withdrawal of an authorisation to operate, in particular by incurring a loss which has caused or may cause a significant decrease in its capital;

(b) the amount of its liabilities exceeds the value of its assets;

(d) is in a state where it requires public aid, except where such aid would be granted in accordance with Regulation (EC) No 4) and other acts5) The European Union in the field of public aid, preventive, temporary and in order to avoid serious disturbance in the economy of the State and the protection of financial stability, an institution which does not fulfil the conditions set out in points (a) to (c), to an extent proportionate to its purpose, provided that the institution does not intend to use such aid to cover actual or imminent losses and that the aid has one of the following forms:

1. a State guarantee such as providing financial assistance to the Czech National Bank to remedy the temporary liquidity shortage,

2. the State guarantee for the institution's new debts; or

3. an increase in capital under conditions which do not favour an institution if, at the time the financial assistance is granted, neither the condition under points (a) to (c) nor the conditions for carrying out the write-off and conversion of capital instruments and intra-group eligible liabilities under § 60 or 61 are met; the aid may not exceed the amount sufficient to cover the capital shortfall found in stress tests, asset quality assessment or similar.

(2) The compulsory person also fails if he can reasonably assume that at least one of the conditions referred to in paragraph 1 (a) to (c) is met.

§ 5

The resolution authority

(1) The resolution authority is the Czech National Bank.

(2) In exercising its powers under this Act, the Czech National Bank shall act without any restriction or consent which would otherwise be necessary and shall not be subject to notification and publication obligations under other laws, unless otherwise provided for by this law or by a directly applicable European Union law.

(3) The Czech National Bank is entitled to conduct a training solution for adverse situations and a training solution for crisis.

(4) The Czech National Bank keeps a list of obliged persons pursuant to Article 3, which it publishes on its website.

(5) The list referred to in paragraph 4 shall include at least the institutions, financial holding persons, mixed financial holding persons and the obliged entities which the obliged entity has designated as a member of the consolidation unit in the relevant statement submitted by the obliged entity to the Czech National Bank under the Act on the Czech National Bank29).

(6) The Czech National Bank may, for the purpose of preparing the resolution of a crisis, by decision require the institution to address potential acquirer under the conditions laid down in Sections 97 (1) and (2).

§ 6

Activity separation

(1) The Czech National Bank will ensure the functional separation of the branch exercising the responsibility of the resolution authority from other activities of the Czech National Bank. This is without prejudice to the scope of the Banking Board under the Czech National Bank Act.

(2) The Czech National Bank will ensure close cooperation, including the exchange of information between all the departments concerned in carrying out the activities under this Act, in particular for the purposes of the procedure under Sections 17, 19, 22 to 26a, Sections 77 and 78, Sections 81 to 81b, 98, 128b, 128c, 129 to 129d, 131 to 131c, 137, 159, 160 and 168 (1).

(3) The Czech National Bank shall adapt the rules relating to the separation of activities referred to in paragraph 1, including those concerning the exchange of information between services referred to in paragraph 2, taking into account the requirements of other legislation. This Regulation or part thereof containing the rules in question shall be published on its website.

(4) The Czech National Bank shall inform the European Commission and the European Supervisory Authority (European Banking Authority) of the separation of activities referred to in paragraph 1 and shall indicate how responsibilities and responsibilities are to be allocated.

§ 7

Decision-making

(1) When taking decisions under this law Czech National Bank

(a) take into account the possible effects of this Decision in the other Member States in which the person to whom the decision is addressed is active or in which the other members of the group of which that person is a member; and

(b) seek to reduce the negative effects of decisions on financial stability and the negative economic and social impacts in these other Member States.

(2) The Czech National Bank shall take decisions under this Act on the basis of the information available to it at the time of the assessment of the need for the adoption of such a decision, if it is manifestly justified to take account of them, and on the basis of the level of evaluation of the information that can reasonably be required in the circumstances. This provision shall apply mutatis mutandis to decisions taken by a special administrator and a temporary administrator appointed under this Law.

(3) The Czech National Bank may require any information necessary for its decision under this Act, including updates and additional information specified in the resolution plan, and obtain information on the basis of on-the-spot checks with the obliged entity. The provision of information to the Czech National Bank is not a breach of the contractual or legal obligation of secrecy. To carry out the check, the Czech National Bank is entitled to invite an auditor, audit firm, expert or other persons.

(4) If appropriate, the Czech National Bank may impose an obligation on the obliged entity to keep detailed lists of the financial contracts to which it is party, including the determination of the data format and other details of such records. The time limit for the delivery of such records shall be the same in respect of all obliged persons. If this is appropriate to ensure the competence of the resolution officer, the Czech National Bank shall be entitled to impose an obligation on it to maintain and update the set of supporting documents and information needed to produce the valuation. The specific scope and detailed specification of the supporting documents shall be determined by decision. This provision is without prejudice to the powers of the Czech National Bank to require information or cooperation from obliged persons.

(5) The information referred to in paragraph 3 shall be provided free of charge; In the absence of public authorities, the right to reimbursement of the costs effectively incurred shall lie with the beneficiary.

(6) The persons and authorities referred to in paragraph 3 which are obliged to provide information to the Czech National Bank are responsible for the damage or other damage they have caused in the event that they do not provide that information properly and in a timely manner.

(7) The obliged person shall designate a member of the management body or of the staff member directly subordinate to the management body responsible for providing information to the Czech National Bank under this Act.

ČÁST DRUHÁ

PLAN, CRISIS MANAGEMENT ELIGIBILITY AND NATIONAL AID

HLAVA I

SAFETY PLANS

Díl 1

Simplified responsibilities of certain institutions

§ 8

(1) The Czech National Bank may, even without a request, take account of the potential significantly negative impact of the failure of an institution based in the Czech Republic on financial markets, other institutions, as well as on financing or on the economy as a whole, limit the scope of the application of the requirements set out in Section 9 and provide for a different deadline for the establishment of recovery plans and the frequency of their regular update; taking into account the nature of the institution's business, ownership structure, legal form, risk profile, size, legal status, links with other participants in the financial system, scope and complexity of its activities, membership of the institutional protection system or other similar system under the directly applicable European Union2) and investment services provided by that institution. If circumstances change, the Czech National Bank may terminate the decision to limit the requirements without an application by issuing a decision setting out a new scope of the obligations under Section 9.

(2) The Czech National Bank shall inform the European Banking Authority of the decisions it has taken pursuant to paragraph 1.

(3) The decision referred to in paragraph 1 may not be taken in the case of an institution:

(a) whose balance sheet total exceeds EUR 30 000 000; or

(b) where the balance sheet total ratio of gross domestic product exceeds 20% and the balance sheet total exceeds EUR 5 000 000 000.

Díl 2

Recovery plan

§ 9

Requirements for recovery plan

(1) An institution established in the Czech Republic, which is not a member of a group subject to supervision on a consolidated basis by the Czech National Bank or by the supervisory authority of another Member State, shall draw up and maintain a recovery plan which is part of the management and control system of the institution under another legislation6); in the institution's recovery plan

(a) a wide range of possible recovery measures which it is able to take in the event of a serious deterioration in its financial situation in order to ensure that its financial stability is restored;

(b) conditions and procedures to ensure timely implementation of recovery measures;

(c) analysis based on multiple scenarios and developments in adverse macroeconomic events affecting the Bank's activities and significant financial difficulties of the institution, including systemic impact events, the difficulties of the group of which the institution is part and the difficulties of individual members of that group.

(2) An institution is required to update its recovery plan at least once a year, and without undue delay after any change in the facts that have a significant impact on the content or implementation of the recovery plan, in particular following a change in its legal form or organisational structure, business activities or financial situation. The Czech National Bank may, in particular in the light of the conditions set out in Section 8 (1), require the institution to update its recovery plan more frequently, including the setting of the frequency of such updates.

(3) The recovery plan of the institution must be based on realistic assumptions and must not assume the granting of public support or rely on the granting of credit or other transactions with the Czech National Bank; However, an institution's recovery plan

(a) contains an analysis of the institution's ability to conduct business with the Czech National Bank in cases foreseen in the plan and to apply for loans to it;

(b) identify assets that would be available as collateral in the cases referred to in (a); and

(4) The institution's recovery plan shall include at least:

(a) a summary of the main parts of the plan and the overall potential for recovery;

(b) a summary of the significant changes in the institution since the last recovery plan submitted to the Czech National Bank;

(c) a communication and communication plan describing how the institution intends to respond to potential negative market reactions;

(d) a set of capital and liquidity measures necessary to maintain or restore the financial position of the institution and its ability to continue its activities;

(e) an estimate of the time frame for the implementation of the essential aspects of the plan;

(f) a detailed description of the significant obstacles to the effective and timely implementation of the plan, including taking into account the impact on other members of the group, clients, customers and counterparties;

(g) determining the essential activities of the institution;

(h) a detailed description of the procedures for determining the value and possible transfer or sale to other persons of the institution's main business, operations and assets;

(i) a detailed description of the integration of recovery planning into the management of the institution, policies and procedures governing the approval of the recovery plan and the definition of the persons responsible for preparing and implementing the plan within the institution;

(j) mechanisms and measures to maintain or restore the institution's capital;

(k) mechanisms and arrangements to ensure the necessary access by the institution to emergency funding sources, including possible liquidity sources; Part of the assessment of the available collateral and the possibility of transferring liquidity between individual members of the group and the types of business, in order to ensure that the institution continues to be able to carry out its operations and discharge its debts at the time of their maturity,

(l) mechanisms and measures to limit risks and levers;

(m) debt restructuring mechanisms and measures;

(n) mechanisms and measures for restructuring business lines;

(o) the mechanisms and measures necessary to maintain continuous access to financial market infrastructure;

(p) the mechanisms and measures necessary to ensure the continued functioning of the operational procedures of the institution, including networks and information systems established and managed under the directly applicable European Union regulation governing the digital operational resilience of the financial sector35),

(q) preparatory measures to facilitate the sale of assets or the transfer of business activities within the timeframe needed to restore financial stability;

(r) other management measures or strategies to restore financial health and the expected financial impact of such measures or strategies;

(s) preparatory measures taken or planned by the institution to facilitate the implementation of the recovery plan, including measures necessary for the timely recapitalisation of the institution;

(t) the system of indicators referred to in paragraph 5; and

(u) a description of the measures which the institution is prepared to take if it finds in its activities a deficiency or a imminent deficiency in accordance with Paragraph 37.

(5) An institution is required to develop and indicate in the recovery plan a system of indicators defining situations where it may be useful to take one or more of the measures contained in the recovery plan or group recovery plan. These indicators may be qualitative or quantitative in nature, relate to the financial position of the institution and must be easily monitored. The institution shall monitor and evaluate the values or status of the indicators on a regular basis, with sufficient frequency to detect any deterioration in its financial situation and be able to take appropriate recovery measures in a timely manner.

(6) The recovery plan is without prejudice to the right of the institution

(a) take action according to its recovery plan even if the relevant indicator has not reached the set threshold or condition; or

(b) refrain from taking measures in accordance with its recovery plan even if the relevant indicator has reached the set threshold or condition.

(7) The institution shall inform the Czech National Bank in writing without undue delay of the achievement of the threshold or status of the indicator and of the decision to take or not to take the measures referred to in the recovery plan referred to in paragraph 6.

§ 10

Other requirements for recovery plan

(1) If this is appropriate for the establishment of an effective recovery plan for the institution, the Czech National Bank may specify specific requirements for the recovery plan and other requirements for its content or form. Furthermore, the Czech National Bank may impose an obligation on the institution to keep detailed records of the financial contracts to which the institution is party.

(2) Before submitting an institution's recovery plan for the assessment of the Czech National Bank, the management body of the institution will approve the recovery plan.

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Regulation Information

Citation	Act No. 374 / 2015 Coll., on Financial Market Recovery and Resolution
Regulation Type	Law
Author	-
Collection	Code of Laws

Date of Promulgation	28.12.2015
Effective from	01.01.2016
Effective until	-
Status	Valid

Legal Areas: Banking, Money Securities Finance Commercial law Businessman, Company Administrative offences Administrative law

The regulation text is for informational purposes only.