S.L. 330.9 Art. 107Mutualisation of national financing arrangements in the case of a group resolution.

(1) In the case of a group resolution as referred to in regulation 91 or regulation 92, the resolution financing arrangement of each institution established in Malta that is part of a group shall contribute to the financing of the group resolution in accordance with this regulation.

(2) For the purposes of sub-regulation (1), where the Resolution Committee is the group-level resolution authority, it shall, after consulting the European resolution authorities of the institutions that are part of the group, propose, if necessary before taking any resolution action, a financing plan as part of the group resolution scheme provided for in regulations 91 and 92: Provided that the financing plan shall be agreed in accordance with the decision-making procedure referred to in regulations 91 and 92.

(3) The financing plan shall include:

(a) a valuation in accordance with regulation 36 in respect of the affected group entities;

(b) the losses to be recognised by each affected group entity at the moment the resolution tools are exercised;

(c) for each affected group entity, the losses that would be suffered by each class of shareholders and creditors;

(d) any contribution that deposit guarantee schemes would be required to make in accordance with regulation 109(1) and (2);

(e) the total contribution by resolution financing arrangements and the purpose and form of the contribution;

(f) where an affected group entity is located in Malta, the basis for calculating the amount that the financing arrangement is required to contribute to the financing of the group resolution in order to build up the total contribution referred to in paragraph (e);

(g) where an affected group entity is located in Malta, the amount that the financing arrangement is required to contribute to the financing of the group resolution and the form of those contributions;

(h) where an affected group entity is located in Malta, the amount of borrowing that the financing arrangements will contract from institutions, financial institutions and other third parties under regulation 105;

(i) where an affected group entity is located in Malta, a timeframe for the use of the financing arrangement which should be capable of being extended where appropriate.

(4) The basis for apportioning the contribution referred to in sub-regulation (3)(e) shall be consistent with sub-regulation (5) and with the principles set out in the group resolution plan in accordance with regulation 12(3)(f), unless otherwise agreed in the financing plan.

(5) Unless agreed otherwise in the financing plan, the basis for calculating the contribution of a financing arrangement in Malta shall in particular have regard to:

(a) the proportion of the group’s risk-weighted assets held at institutions and entities referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) established in Malta;

(b) the proportion of the group’s assets held at institutions and entities referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) established in Malta;

(c) the proportion of the losses, which have given rise to the need for group resolution, which originated in group entities under the supervision of the Authority; and

(d) the proportion of the resources of the group financing arrangements which, under the financing plan, are expected to be used to benefit group entities established in Malta.

(6) The Resolution Committee shall establish rules and procedures in advance to ensure that each financing arrangement in Malta can affect its contribution to the financing of group resolution immediately without prejudice to sub-regulation (2).

(7) For the purposes of these regulations, group financing arrangements, under the conditions laid down in regulation 105, shall be allowed to contract borrowings or other forms of support, from institutions, financial institutions or other third parties.

(8) Financing arrangements may guarantee any borrowing contracted by the group financing arrangements in accordance with sub-regulation (7).

(9) Any proceeds or benefits that arise from the use of the group financing arrangements shall be allocated to Malta’s financing arrangements in accordance with Malta’s contributions to the financing of the resolution as established in sub-regulation (2).