EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 3 December 2010  
on the temporary holding of shares by credit instit utions in the course of financial reconstructions 
or rescue operations of undertakings 
(CON/2010/86) 
 
Introduction and legal basis  
On 5 November 2010, the European Centra l Bank (ECB) received a request from Banca Na ţională a 
României (BNR) for an opinion on a draft Regulati on on shares held temporarily during a financial 
reconstruction or rescue operation of an undertaking ope rating outside the financial sector (hereinafter the 
‘draft regulation’). 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth indent  of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft regulation relates to rules app licable to the financial institutions insofar 
as they materially influence the stability of financial institutions and markets. In  accordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion. 
 1 Purpose of the draft regulation 
1.1 The draft regulation sets out requirements for credit institutions’ prudent decision-making 
processes when they seek to temporarily acquire shares in (and possibly control of) a non-financial 
undertaking during a financial reconstruction or a rescue operation, by way of a debt-to-equity 
swap.  
1.2 For this reason, the draft regulation provid es further details on the exemption clause under 
Article 145 of the Government’s Emerge ncy Ordinance No 99/2006 (GEO 99/2006)
2, which 
transposes Article 121 of Directive 2006/48/EC3. This clause provides that shares held temporarily 
during a financial reconstruction or rescue opera tion shall not be counted as qualifying holdings. 
Therefore, the limitation applicable to qualifying holdings of credit institutions in non-financial 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Emergency Ordinance No 99 of 6 December 2006 on Credit Institutions and Capital Adequacy, Monitorul Oficial al 
României , Part One, No 1027 of 27 December 2006. 
3  Directive 2006/48/EC of the European Parliament and of  the Council of 14 June 2006 relating to the taking up and 
pursuit of the business of credit instituti ons (recast), OJ L 177 , 30.6.2006, p. 1. 
2 undertakings, as laid down in Articles 143 and 144 of GEO 99/2006, which transposes Article 120 
of Directive 2006/48/EC, does not apply.  
1.3 Article 5 of the draft regulation sets out the specific requirements to be met by a credit institution 
before acquiring shares in order for it to benefit from the exemption. In particular, the credit 
institution needs to provide a strategy and an overall policy4. It must formulate and implement a 
concrete, viable and well-founde d financial reconstruction or rescue plan for the undertaking 
concerned5. It must also properly justify its view that the acquisition of shares is a measure of last 
resort6 and it must have suitable risk management policies/procedures7 in place.  
1.4 Furthermore, the credit institution needs to notify BN R’s Supervision Department of its intention to 
acquire the shares and to submit documentation demonstrating that it meets the requirements 
stipulated in Article 5 of the draft regulation. The Supervision Department shall then deliver an 
opinion as to whether these requirements8 have been met.  
1.5 The ‘temporary’ holding of shares acquired under the exemption clause is limited to a period of 
36 months, with the possibility of a one-off extens ion which may be granted by BNR’s Supervision 
Department. However, shares cannot be he ld for more than a total of 48 months9.  
 2. Specific observations  2.1 The ECB welcomes the intention of the Romanian authorities to provide further details on the 
conditions under which credit ins titutions may acquire shares in non -financial undertakings and on 
the restrictions which apply in this context. This approach is in line with the spirit of the exemption 
clause in Article 121 of Directive 2006/48/EC, as implemented by Article 145 of GEO 99/2006. 
2.2 The ECB notes that, for the purposes of clarity and legal certainty, some of the provisions in the 
draft regulation need to be further clarified. In particular, the consequen ces of a negative opinion of 
BNR’s Supervision Department on whether a credit institution meets the requirements to 
temporarily acquire shares in accordance with th e exemption clause should be clearly stated. To 
this end, concrete provisions setting out the meas ures that BNR could take in such cases, including 
sanctions for non-compliance, would contribute to th e enforcement of prudential supervision in this 
field.    
 
                                                 
4  Article 5 (1)(a) of the draft regulation. 
5  Article 5 (1)(b) of the draft regulation. 
6  Article 5 (1)(c) of the draft regulation. 
7  Article 5 (1)(d) of the draft regulation. 
8  Article 7 of the draft regulation. 
9  Article 9 of the draft regulation. 
3 This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main, 3 December 2010.  
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET