Cap. 547 Art. 7PublicAccounts Committee. FUND the Republic of Republic of the Kingdom of Republic, the the Grand Kingdom of the the Portuguese and the Republic financial fundamental part; Member States 2013, related to concerning the of the and a uniform firms in the * Fund ("SRM of legal acts of financial and of

The Minister shall appear at least once a year before the

Public Accounts Committee or before another committee of the House of Representatives which from time to time may be tasked with the economic and financial scrutiny of Government for the purpose of rendering account of the workings of the Single Resolution Fund insofar as this is in conformity with the obligations of Malta. ON THE TRANSFER AND MUTUALISATION OF CONTRIBUTIONS TO THE SINGLE RESOLUTION THE CONTRACTING PARTIES, the Kingdom of Belgium, Bulgaria, the Czech Republic, the Kingdom of Denmark, the Federal Germany, the Republic of Estonia, Ireland, the Hellenic Republic, Spain, the French Republic, the Republic of Croatia, the Italian Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, Duchy of Luxembourg, Hungary, the Republic of Malta, the Netherlands, the Republic of Austria, the Republic of Poland, Republic, Romania, the Republic of Slovenia, the Slovak Republic of Finland; COMMITTED TO achieving the establishment of an integrated framework in the European Union of which the banking union is a RECALLING the Decision of the representatives of the euro area meeting within the Council of the European Union of 18 December the negotiation and conclusion of an intergovernmental agreement Single Resolution Fund ("the Fund") established according to Regulation European Parliament and of the Council establishing uniform rules procedure for the resolution of credit institutions and certain investment framework of a Single Resolution Mechanism and a Single Resolution Regulation"), as well as the Terms of Reference attached to that Decision; WHEREAS:

(1) The European Union has in the past years adopted a number fundamental for the achievement of the internal market in the field services and for guaranteeing the financial stability of the euro area as a whole, as well as for the process towards deeper economic and

(2) In June 2009, the European Council called for the establishment "European single rule book applicable to all financial institutions Market". The Union has thus established a single set of harmonised which credit institutions throughout the Union must respect, through

(EU) No. 575/2013 of the European Parliament and of the Council + 2013/36/EU of the European Parliament and of the Council .

(3) The Union has further set up the European Supervisory Authorities to which a number of tasks on micro-prudential supervision are allocated.

* Regulation of the European Parliament and of the Council establishing uniform procedure for the resolution of credit institutions and certain investment framework of a Single Resolution Mechanism and a Single Resolution Regulation (EU) No. 1093/2010 of the European Parliament and of the Council. # Regulation (EU) No. 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms Regulation (EU) No. 648/2012 (OJ L 176, 27.6.2013, p. 1). + Directive 2013/36/EU of the European Parliament and of the Council access to the activity of credit institutions and the prudential supervision of credit investment firms, amending Directive 2002/87/EC and repealing Directives 2006/49/EC (OJ L 176, 27.6.2013, p. 338). European Parliament and of the Council and the European Securities Authority (ESMA) established by Regulation (EU) No. 1095/2010 of Parliament and of the Council+. That was accompanied by the the European Systemic Risk Board by Regulation (EU) No. 1092/ ¢ European Parliament and of the Council to which some functions of supervision have been allocated.

Union has established a Single Supervisory Mechanism through Council No. 1024/2013,** conferring specific tasks on the European Central concerning policies relating to the prudential supervision of credit conferring upon the ECB, acting jointly with the national competent powers of supervision over the credit institutions established in the whose currency is the euro and in the Member States whose currency which have established a close cooperation with the ECB for purposes ("the participating Member States").

the Directive of the European Parliament and of the Council framework for the recovery and resolution of credit institutions and ## ("BRR Directive"), the Union harmonises national laws and the resolution of credit institutions and certain investment firms, establishment of national resolution financing arrangements.

European Council of 13/14 December 2012 stated that "In a context supervision is effectively moved to a single supervisory mechanism, a mechanism will be required, with the necessary powers to ensure participating Member States can be resolved with the appropriate European Council of 13/14 December 2012 further stated that "The

(EU) No. 1093/2010 of the European Parliament and of the Council 24 November establishing a European Supervisory Authority (European Banking Authority), amending 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 12).

(EU) No. 1094/2010 of the European Parliament and the Council of 24 November establishing a European Supervisory Authority (European Insurance and Occupational Authority), amending Decision No. 716/2009/EC and repealing Commission 2009/79/EC (OJ L 331, 15.12.2010, p. 48).

(EU) No. 1095/2010 of the European Parliament and of the Council 24 November establishing a European Supervisory Authority (European Securities and Markets amending Decision No. 716/2009/EC and repealing Commission Decision 2009/ 331, 15.12.2010, p. 84).

(EU) No. 1092/2010 of the European Parliament and of the Council of 24 on European Union macro-prudential oversight of the financial system and European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1). Regulation (EU) No. 1024/2013 of 15 October 2013 conferring specific tasks on the Central Bank concerning policies relating to the prudential supervision of credit L 287, 29.10.2013, p. 63). European Parliament and of the Council establishing a framework for the resolution of credit institutions and investment firms and amending Council 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No. 1093/ No. 648/2012, of the European Parliament and of the Council that context, adopted the SRM Regulation which creates a centralised decision making for resolution, endowed with the adequate financing the establishment of the Fund. The SRM Regulation applies to the the participating Member States.

(7) The SRM Regulation establishes, in particular, the Fund modalities for its use. The BRR Directive and the SRM Regulation general criteria to determine the fixing and calculation of ex contributions of institutions necessary for the financing of the Fund, obligation of Member States to levy them at national level. Nonetheless, participating Member States who raise the contributions on the institutions their respective territories according to the BRR Directive and the remain competent to transfer those contributions towards the Fund. transfer the contributions raised at national level towards the Fund from the law of the Union. Such obligation will be established by which lays down the conditions upon which the Contracting Parties, with their respective constitutional requirements, jointly agree contributions that they raise at national level to the Fund.

(8) The competence of each of the participating Member States contributions raised at national level should be exercised in such respects the principle of sincere cooperation enshrined in Article 4(3) on European Union (TEU), according to which Member States shall facilitate the achievement of the Union's tasks and refrain from any could jeopardise the attainment of the Union's objectives. For participating Member States should ensure that financial resources channelled towards the Fund, hence guaranteeing its proper functioning.

(9) Accordingly, the Contracting Parties have concluded whereby, inter alia, they establish their obligation to transfer the contributions at national level towards the Fund, pursuant to uniform criteria, conditions, in particular, the allocation during a transitional contributions they raise at national level to different compartments each Contracting Party, as well as the progressive mutualisation compartments in such a manner that the compartments will cease to of that transitional period.

(10) The Contracting Parties recall that it is their aim to preserve field and minimise the overall cost of resolution to tax payers and overall burden on the respective banking sectors when designing the the Fund and their tax treatment.

(11) The content of this Agreement is limited to those specific concerning the Fund that remain within the competence of Member Agreement does not affect common rules established under the law does it alter their scope. It is rather designed as complementary legislation on banking resolution and as supportive and intrinsically achievement of Union policies, in particular the establishment of the in the field of financial services.

(12) National laws and regulations implementing the BRR Directive, those related to the establishment of national financing arrangements, as from 1 January 2015. The provisions concerning the establishment the SRM Regulation, at which date they will start raising the earmarked to the Fund. In order to reinforce the financial capacity of its inception, the Contracting Parties commit to transfer to the Fund they have raised by virtue of the BRR Directive up to the date of SRM Regulation. acknowledged that there may exist situations where the means available not sufficient to face a particular resolution action, and where the ex contributions that should be raised in order to cover the necessary additional immediately accessible. Pursuant to the statement of the Eurogroup Council of 18 December 2013, in order to ensure continuous sufficient the transitional period, the Contracting Parties concerned by a resolution action should provide bridge financing from national sources or Stability Mechanism ("ESM") in line with agreed procedures, setting up of possibilities for temporary transfers between national The Contracting Parties should have in place procedures allowing any request for bridge financing in a timely manner. A common developed during the transitional period. Such a backstop will borrowings by the Fund. The banking sector will ultimately be liable for means of contributions in all participating Member States, including contributions. Those arrangements will ensure equivalent treatment across all Parties participating in the Single Supervisory Mechanism and the Mechanism, including Contracting Parties joining at a later stage, and obligations and both in the transition period and in the steady arrangements will respect a level playing field with Member States that in the Single Supervisory Mechanism and in the Single Resolution

Agreement should be ratified by all the Member States whose currency by the Member States whose currency is not the euro that participate Supervisory Mechanism and in the Single Resolution Mechanism. States whose currency is not the euro that are not Contracting accede to this Agreement with full rights and obligations, in line with Contracting Parties, as from the date when they effectively adopt the or, otherwise, as from the date of entry into force of the ECB close cooperation referred to in Article 7(2) of Regulation (EU) No.

May 2014, the representatives of the Governments of the Member the Contracting Parties to request the European Commission and Resolution Board ("the Board") to perform the tasks provided for in this

15 of the SRM Regulation, as on the date of its initial adoption, general principles governing resolution, pursuant to which the the institution under resolution bear first losses and the creditors of under resolution bear losses after the shareholders in accordance with priority of their claims. Article 27 of the SRM Regulation lays down bail-in tool that requires that a contribution to loss absorption and equal to an amount not less than 8% of the total liabilities including institution under resolution, measured at the time of resolution accordance with the valuation provided for in Article 20 of the SRM measured at the time of resolution action in accordance with the valuation for in Article 20 of the SRM Regulation, unless all unsecured, liabilities, other than eligible deposits, have been written down or Moreover, Articles 18, 52 and 55 of the SRM Regulation, as on the adoption, establish a number of procedural rules on decision making and the institutions of the Union. Those elements of the SRM Regulation an essential basis for the consent of the Contracting Parties to Agreement.

(18) The Contracting Parties acknowledge that the relevant provisions Vienna Convention on Law of Treaties as well as international customary apply in respect of any fundamental change of circumstances that against their will and that affects the essential basis of the consent of Parties to be bound by the provisions of this Agreement, as referred The Contracting Parties may accordingly invoke the consequences fundamental change of circumstances that has taken place against pursuant to public international law. If a Contracting Party consequences, any other Contracting Party can submit the matter Justice of the European Union ("Court of Justice"). The Court of granted the power to verify the existence of any fundamental circumstances and the consequences deriving from it. The Contracting recognise that such invocation of consequences after the repeal or the any of the elements of the SRM Regulation referred to in recital (17), place against the will of any of the Contracting Parties and which affecting the essential basis of their consent to be bound by the provisions Agreement, will amount to a dispute concerning the application of for the purposes of Article 273 of the Treaty on the Functioning Union (TFEU) that can therefore be submitted to the Court of Justice that provision. Any Contracting Party may also ask the Court of Justice measures, in accordance with Article 278 TFEU and Articles 160 to * of Procedure of the Court of Justice. When deciding on the dispute, the granting of interim measures, the Court of Justice should take obligations of the Contracting Parties under TEU and TFEU, including to the Single Resolution Mechanism and its integrity.

(19) The determination whether the institutions of the Union, the national resolution authorities apply the bail-in tool in a manner which with the law of the Union falls within the powers of the Court accordance with the legal remedies laid down in TEU and TFEU, 258, 259, 260, 263, 265 and 266 TFEU.

(20) As an instrument of public international law, the rights and down in this Agreement are subject to the principle of reciprocity. consent by each of the Contracting Parties to be bound by this Agreement upon the equivalent performance of the rights and obligations incumbent the Contracting Parties. As a consequence, the breach by any of Parties of its obligation to transfer the contributions towards the Fund the exclusion of the entities authorised in their territories from access

* Rules of Procedure of the Court of Justice of 25 September 2012 (OJ L 265, including any subsequent amendments. Parties recognise that in case of a breach of the obligation to contributions, the only legal consequence will be the exclusion of the that has committed the breach from financing under the Fund and obligations of the other Contracting Parties under the Agreement shall unaffected. Agreement lays down a mechanism whereby the participating Member reimburse, jointly, promptly and with interest to each Member State participating in the Single Supervisory Mechanism and in the Single Mechanism, the amount that that non-participating Member State has resources corresponding to the use of the general budget of the Union in non-contractual liability and costs related thereto, in respect of the exercise institutions of the Union under the SRM Regulation. The liability participating Member State under this arrangement should be separate and not joint and several, and hence each of the participating Member respond only for their part of the obligation of reimbursement as accordance with this Agreement. concerning the interpretation and application of this Agreement the Contracting Parties, including those concerning compliance with laid down therein, should be submitted to the jurisdiction of the in accordance with Article 273 TFEU. Member States whose the euro that are not parties to this Agreement should be able to Court of Justice any dispute on the interpretation and enforcement of compensation for non-contractual liability and costs related thereto Agreement. transfer of contributions by Contracting Parties which become part of Supervisory Mechanism and of the Single Resolution Mechanism at a date date of application of this Agreement should be made respecting equality of treatment with the Contracting Parties that participate in Supervisory Mechanism and in the Single Resolution Mechanism at the application of this Agreement. Contracting Parties participating in the Single Mechanism and in the Single Resolution Mechanism at the date of this Agreement are not supposed to bear the burden of resolutions to national financial arrangements of those participating at a later stage were contribute. Likewise, the latter are not supposed to bear the cost of arising before the date when they become participating Member States, Fund should be liable.

event that the close cooperation with the ECB of a Contracting Party, is not the euro, is terminated in accordance with Article 7 of No. 1024/2013, a fair partition of the cumulated contributions from Party concerned should be decided taking into account the interests Contracting Party concerned and the Fund. Accordingly, Article 4(3) of Regulation lays down the modalities, criteria and the procedure for the with the Member State concerned by termination of close cooperation recoupment of contributions transferred by that Member State.

fully respecting the procedures and requirements of the Treaties on European Union is founded, the Contracting Parties’ objective is to substance provisions of this Agreement, in accordance with the TEU soon as possible into the legal framework of the Union. ARTICLE 1