Criteria for the adoption of delegated decisions on prior permission for own funds reductions
Article 5
1. Decisions on prior permission for own funds reductions shall be taken by means of a delegated decision where the conditions of either paragraph 2 or 3 are fulfilled. 2. For reductions with replacement, decisions shall be taken by means of a delegated decision if: (a) the replacing instrument is a Common Equity Tier 1 instrument with an aggregate nominal amount at least equal to the nominal amount of the replaced instrument; or (b) the replacing instrument is an Additional Tier 1 instrument with an aggregate nominal amount at least equal to the nominal amount of the replaced instrument, if the replaced instrument is an Additional Tier 1 instrument; or (c) the replacing instrument is an Additional Tier 1 or Tier 2 instrument with an aggregate nominal amount at least equal to the nominal amount of the replaced instrument, if the replaced instrument is a Tier 2 instrument. 3. For reductions without replacement, decisions shall be taken by means of a delegated decision if: (a) following the reduction, the own funds exceed and are estimated to continue exceeding, for at least three financial years after the date of the application, the sum of the requirements laid down in Article 92(1) of Regulation (EU) No 575/2013, the own funds required to be held in accordance with Article 16(2)(a) of Regulation (EU) No 1024/2013, the combined buffer requirement as defined in point (6) of Article 128 of Directive 2013/36/EU and the Pillar 2 capital guidance as set out in the last available SREP decision; and (b) the impact of the reduction on the Common Equity Tier 1 capital ratio, the Tier 1 capital ratio and the total capital ratio is below 100 basis points. 4. Negative decisions shall not be adopted by means of a delegated decision. 5. Where, pursuant to paragraphs 1 to 4, a decision on an own funds reduction cannot be adopted by means of a delegated decision, it shall be adopted in accordance with the non-objection procedure. 6. The assessment on an own funds reduction shall be carried out in accordance with Article 78 of Regulation (EU) No 575/2013 and Section 2 of Chapter IV of Delegated Regulation (EU) No 241/2014.