On 30 September 2024, the Single Resolution Board (SRB) issued a communication on the changes to its minimum requirements for own funds and eligible liabilities (MREL) requirements which are to be implemented in line with the Daisy Chains Act (Directive 2024/1174 amending Regulation 806/2014 (SRMR) and Directive 2014/59/EU (BRRD)).
The communication refers to both Article 12d(2a) SRMR and Article 45i BRRD as amended by the Daisy Chains Act. Due to these provisions the reporting and disclosure obligations do not apply to the liquidation entities for which the SRB does not determine the MREL. In accordance with Article 4 of the Daisy Chains Act the amendments to Article 12d SRMR shall apply from 14 November 2024.
The communication states that:
- In line with the principles of good administration and legal certainty, in the course of the 2024 resolution planning cycle, the previously adopted decisions setting the MREL at the level equal to the loss absorption amount will be repealed with effect as of 14 November 2024.
- Prior permissions granted to the same liquidation entities pursuant to Article 78a of the Capital Requirements Regulation and the process set forth in the Commission Delegated Regulation (EU) 241/20146 with validity beyond 14 November 2024 are also repealed as of the same date.
- Following the repeal of the previously adopted MREL decisions, with effect as of 14 November 2024, the concerned liquidation entities are not anymore limited by the prior permissions previously granted by the SRB and they will be in the position to reduce eligible liabilities instruments without the SRB’s prior permission.