Formula and method for calculating a sanction pursuant to Article 7(3) of Regulation (EC) No 2531/98 for a failure to comply with the requirement to notify the relevant national central bank of any restrictions that would prevent an institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1)
ANNEX IISupplementary provisions
ANNEX II Formula and method for calculating a sanction pursuant to Article 7(3) of Regulation (EC) No 2531/98 for a failure to comply with the requirement to notify the relevant national central bank of any restrictions that would prevent an institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1) 1. Amount of the sanction imposed by the European Central Bank in the event of a failure to notify to the relevant national central bank any legal, contractual, regulatory or other restrictions that would prevent an institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1): In the event of a failure to comply with the obligation to notify to the relevant national central bank any legal, contractual, regulatory or other restrictions that would prevent an institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1), a sanction will be imposed which is calculated as a penalty of 2,5 percentage points above the average, taken over the period in relation to which the sanction is imposed, of the marginal lending rate of the European System of Central Banks, applied to the daily average amount of funds affected by the institution’s failure to notify over the period in relation to which the sanction is imposed. If the non-compliance extends over more than one maintenance period then the period in relation to which the sanction is imposed will not exceed the total number of days of the maintenance period in which the non-compliance is detected. Subject to Section 3 of this Annex, the penalty is calculated using the following formula: Where: P s = penalty to be paid owing to the lack of notification pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1) D s = the amount of funds affected by the institution’s failure to notify under the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1) n s = the lesser of: (i) the total number of calendar days without notification; and (ii) the number of days in the maintenance period in which the non-compliance is detected i = the calendar day of the period in relation to which the sanction is imposed MLR i = the marginal lending rate on day i 2. Repetitive breach of the obligation to notify to the relevant national central bank any legal, contractual, regulatory or other restrictions that would prevent an institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1): Where a sanction has been imposed on an institution for its failure to notify to the relevant national central bank any legal, contractual, regulatory or other restrictions that would prevent the institution from liquidating, transferring, assigning or disposing of its funds held in minimum reserve pursuant to the second subparagraph of Article 3(1), should that institution fail to notify to the relevant national central bank any such restrictions pursuant to the second subparagraph of Article 3(1) during the 12-month period following the date on which the imposition of that sanction has been notified to it, then it is deemed to have committed a repetitive breach. For each repetitive breach, a sanction will be imposed, which is calculated as a penalty of five percentage points above the average, taken over the period in relation to which the sanction is imposed, of the marginal lending rate of the European System of Central Banks, applied to the daily average amount of funds affected by the institution’s failure to notify over the period in relation to which the sanction is imposed. The penalty is otherwise calculated using the formula set out in Section 1 of this Annex. 3. The principle of proportionality and the circumstances of the specific case: Having been calculated in accordance with the formula set out in Section 1 of this Annex, the amount of the penalty may be adjusted to take into account the principle of proportionality and the circumstances of the specific case in accordance with Article 2(2) and (3) of Regulation (EC) 2532/98. Any adjustment to the amount of the penalty is subject to the limits set out in Article 2(1) of that Regulation.