Scope of bail-in tool: Clarification on Article 44(2)(f)

Article 44(2) (f) of Directive 2014/59/EU (BRRD) excludes from bail-in liabilities with a remaining maturity of less than 7 days  owed to systems or operators of systems designated according to Directive 98/26/EC or their participants and arising from the participation in such a system, provided that the remaining maturity is below 7 days or to CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation . Directive 98/26 concerns settlement finality in payment and securities settlement systems and provides the EU legal framework for the regulation of central counterparties (CCPs). Therefore, when a credit institution (or another entity subject to BRRD) concludes a transaction through an operator of systems designated according to Directive 98/26 (such as Euroclear, Iberclear, Clearstream, Monte Titoli, Sicovam), in the event of resolution of the credit institution, the resulting liability that arises as a result of participation in the system will be excluded from bail-in, provided that its remaining maturity is less than 7 days. As a result, in such a case the transaction will be executed / settled notwithstanding the resolution of the institution. Disclaimer: This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.