Repurchase and cancellation of Tier 2 in the open market less than 5 years from issue

Article 63(j) of Regulation (EU) No 575/2013 (CRR) permits that Tier 2 instruments may be reduced/repaid, repurchased, called or redeemed early only where prior supervisory permission has been granted in accordance with Articles 77 and 78 and not before five years after the date of issuance. Article 78(4) of the CRR conditionally permits redemption of AT1 and Tier 2 instruments before five years from date of issuance where a significant/material tax or regulatory change is deemed by the competent authorities to have occurred. The CRR provides no other basis on which fully eligible Tier 2 instruments may be called, redeemed, repurchased or repaid/reduced before five years after the date of issuance or raising.   Instruments grandfathered under Article 484 of the CRR can be called, redeemed, repurchased or repaid/reduced before five years after the date of issuance. Fully eligible instruments may be exchanged against fully eligible instruments of a higher quality, in exceptional circumstances, and subject to the approval of the competent authority in accordance with Article 77.