Chapter 11: Recovery and Resolution Laws

Question 1

How often should the recovery plan be reviewed?

Answer 1

At least annually and after any material change of the legal or organizational structure of the CIF.

Question 2

What are the conditions that the Financial Support Agreement should meet?

Answer 2

• Each party freely enters into the agreement
• Each party must act in their own best interest.
• Each party providing support needs to have full disclosure of all relevant information from the recipient.
• The consideration may take into account inside information.

Question 3

Who should a CIF notify in case of infringement of own funds?

Answer 3

CySEC

Question 4

Who appoints the special administrator?

Answer 4

The special administrator is appointed by the resolution authority for a period not exceeding one year.

Question 5

Who pays the remuneration of the special administrator?

Answer 5

The failing institution.

Question 6

What is the temporary administrator?

Answer 6

A temporary administrator is appointed by CySEC for a period not exceeding one year in the event that the replacement of senior management is deemed insufficient. They can either temporarily replace or work with the CIF’s management body.

Question 7

What measures does CBC have when acting as a resolution authority?

Answer 7

• Sale of business
• Transfer of assets (asset separation tool)
• Bail-in
• Write down or conversion

Question 8

Who should CySEC inform when the resolution conditions are met?

Answer 8

The European Systemic Risk Board (ESRB)

Question 9

What are the requirements that have to be met for Cysec to exchange confidential info with third-country authorities?

Answer 9

Only if the professional secrecy standards in the third country are at least equivalent to the EU standards and any personal data is governed by the applicable Union and national data protection law.

Question 10

Who will CySEC inform of any cooperation arrangements?

Answer 10

CySEC will notify the European Banking Authority (EBA) of any cooperation arrangements concluded.

Question 11

What is a bridge institution? Who authorizes and establishes it?

Answer 11

A bridge institution is an institution created to operate a failed entity until a buyer is found for its operations. It is authorized and established by CySEC.