Ability of the Share Premium to absorb losses

Can the Share Premium be recognised as CET1 capital if there are features preventing its use to absorb losses?

Article 26(1) CRR provides that items included in points (c) to (f) of the same paragraph can be recognised as Common Equity Tier 1 (CET1) only where they are available to the institution for unrestricted and immediate use to cover risks or losses as soon as these occur. However, Article 26(1) CRR appears to be silent with regard to the ability of the share premium account to be available to the institution for unrestricted and immediate use to cover risks or losses as soon as these occur in order to qualify as CET1 capital. In this context, Article 30(b) CRR clarifies that the share premium account qualifies as a CET1 item in accordance with Article 26(1)(b) CRR only to the extent that the related capital instruments qualify as CET1. In practice, Articles of Association (AoA) of supervised entities may include some provisions governing the possible uses of the share premium account that could prevent its capacity to absorb losses. For example, when share premium account paid can only be used for the matters specified in the related deed (which could be limited to distributions, share buy-backs or other uses unrelated to loss absorption). In those cases, the share premium account might not be available to absorb losses despite the fact that the related instruments fully qualify as CET1. The question is whether the share premium account can qualify as CET1 in those cases where the provisions governing its use prevent its capacity to absorb losses, despite the fact that the related instruments fully qualify as CET1.