
Article 1 

1. Competent authorities and resolution authorities shall assess the impact of the failure of a credit institution on financial markets, on other institutions or on funding conditions on the basis of a total quantitative score calculated in accordance with Annex I. They shall do so on a regular basis and at least every two years.
2. A credit institution with a total quantitative score equal to or higher than 25 basis points shall be regarded as an institution the failure of which would be likely to have a significant negative effect on financial markets, other institutions or funding conditions.
3. Competent and resolution authorities may raise or lower the threshold referred to in paragraph 2 within the range of 0 to 105 basis points. Competent and resolution authorities shall keep the amended threshold under regular review.
4. Where the indicator values of Annex I are not available, the assessment referred to in paragraph 1 shall be made on the basis of proxies correlated to the greatest extent possible with the indicators as specified in Annex III.
5. Where a credit institution does not exceed the threshold specified in Article 5(a)(4) of Implementing Regulation (EU) No 680/2014 and does not submit Template 20 of that Regulation, competent and resolution authorities may assign a value of zero to the relevant indicators specified in Annex III.
6. Where the total assets of a credit institution do not exceed 0,02 % of the total assets of all credit institutions authorised and, where relevant data are available, of branches established in the Member State, including Union branches, competent and resolution authorities may, without applying paragraphs 1 to 5, establish that the failure of that credit institution would not be likely to have a significant negative effect on financial markets, other institutions or funding conditions, unless that would not be justified on the basis of Article 2.
7. Where a credit institution has been identified as a G-SII or an O-SII under Article 131(1) of Directive 2013/36/EU or classified as Category 1 on the basis of the guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) issued in accordance with Article 107(3) of that Directive, competent and resolution authorities may, without applying paragraphs 1 to 5 of this Article, establish that the failure of that credit institution would be likely to have a significant negative effect on financial markets, other institutions or funding conditions. The relevant indicator values for those institutions shall, in any event, still be taken into account for determining the aggregate amount referred to in point 2 of Annex I, and for determining the total assets of all credit institutions authorised in the Member State for the purpose of paragraph 6.
Article 2 

1. Where, pursuant to Article 1, a credit institution is not regarded as an institution the failure of which would be likely to have a significant negative effect on financial markets, on other institutions or on funding conditions, competent and resolution authorities shall assess the impact of that credit institution's failure on financial markets, other institutions or funding conditions on a regular basis and at least every two years and having regard to, at least, all of the following qualitative considerations:
(a) the extent to which the credit institution performs critical functions in one or more Member States;
(b) whether the credit institution's covered deposits would exceed the available financial means of the relevant deposit guarantee scheme and the deposit guarantee scheme's capacity to raise extraordinary ex post contributions, as referred to in Article 10 of Directive 2014/49/EU of the European Parliament and of the Council;
(c) whether the credit institution's shareholding structure is highly concentrated, highly dispersed or not sufficiently transparent in a way that could negatively impact the availability or timely implementation of the institution's recovery or resolution actions;
(d) whether the credit institution that is a member of an IPS, as referred to in Article 113(7) of Regulation (EU) No 575/2013 of the European Parliament and of the Council, provides critical functions to other IPS members, including clearing, treasury or other services;
(e) whether the credit institution is affiliated to a central body, as referred to in Article 10 of Regulation (EU) No 575/2013, and the mutualisation of losses among affiliated institutions would constitute a substantive impediment to normal insolvency proceedings.
2. The assessment referred to in paragraph 1 shall be performed independently by competent and resolution authorities having regard to the objectives pursued by recovery and resolution planning.
3. The assessment referred to in paragraph 1 may be performed for a category of credit institutions where the relevant competent or resolution authority determines that two or more credit institutions have similar characteristics in terms of all of the qualitative considerations set out in paragraph 1.
Article 3 

1. Competent and resolution authorities shall assess the impact of the failure of an investment firm on financial markets, other institutions or funding conditions on a regular basis and at least every two years and on the basis of:
(a) the total quantitative score calculated based on the indicators referred to in Annex II;
(b) the weights assigned to those indicators by competent and resolution authorities.
2. The values of the indicators shall be determined on the basis of the indicators as specified in Annex III. Where the indicator values of Annex II are not available, the assessment referred to in paragraph 1 shall be made on the basis of proxies correlated to the greatest extent possible with the indicators as specified in Annex III. Where proxies are not available, competent and resolution authorities may replace the indicators referred to in Annex II with other relevant indicators.
3. The threshold for the total quantitative score shall be set by competent and resolution authorities.
4. An investment firm with a total quantitative score equal to or higher than the threshold referred to in paragraph 3 shall be regarded as an institution the failure of which would be likely to have a significant negative effect on financial markets, other institutions or funding conditions.
5. Where an investment firm has been identified as a G-SII or an O-SII in accordance with Article 131(1) of Directive 2013/36/EU or has been classified as Category 1 on the basis of the guidelines on common procedures and methodologies for SREP issued in accordance with Article 107(3) of that Directive, competent and resolution authorities may, without applying paragraphs 1 to 4 of this Article, establish that the failure of that institution would be likely to have a significant negative effect on financial markets, other institutions or funding conditions.
Article 4 

1. Where an investment firm is not regarded as an institution the failure of which would be likely to have a significant negative effect on financial markets, other institutions and funding conditions pursuant to Article 3, competent and resolution authorities shall assess the impact of that investment firm's failure on financial markets, other institutions or funding conditions on a regular basis and at least every two years and having regard to, at least, all of the following qualitative considerations:
(a) the extent to which the investment firm performs critical functions in one or more Member States;
(b) whether the investment firm's shareholding structure is highly concentrated, highly dispersed, or not sufficiently transparent in a way that could negatively impact the availability or timely implementation of the institution's recovery or resolution actions;
(c) whether an investment firm that is a member of an IPS, as referred to in Article 113(7) of Regulation (EU) No 575/2013, provides critical functions to other IPS members, including clearing, treasury or other services;
(d) whether the majority of the investment firm's clients are retail or professional;
(e) the extent to which money and financial instruments held by the investment firm on its clients' behalf would not be fully protected by an investor-compensation scheme as referred to in Directive 97/9/EC of the European Parliament and of the Council;
(f) whether the investment firm's business model is complex, including the scale of its investment activities.
2. The assessment referred to in paragraph 1 shall be performed independently by competent and resolution authorities having regard to the objectives pursued by recovery and resolution planning.
Article 5 

1. For an institution that is part of a group, the assessments referred to in Articles 1 to 4 shall be made at the level of the parent undertaking in the Member State where the institution has been authorised.
2. By way of derogation from paragraph 1, for an institution that is part of a group subject to consolidated supervision pursuant to Articles 111 and 112 of Directive 2013/36/EU, the assessments referred to in Articles 1 to 4 of this Regulation shall be made at the following levels:
(a) the level of the Union parent undertaking;
(b) the level of each parent undertaking in a Member State or, where there is no parent undertaking in a Member State, the level of each stand-alone subsidiary of the group in a Member State.
3. Institutions that are part of a group subject to consolidated supervision pursuant to Articles 111 and 112 of Directive 2013/36/EU shall be regarded as institutions the failure of which would be likely to have a significant negative effect on financial markets, other institutions or funding conditions, where any of the following apply at any of the levels referred to in points (a) and (b) of paragraph 2 of this Article:
(a) the institution has a total quantitative score that is equal to or exceeds the threshold set by competent and resolution authorities pursuant to Article 1(3) or Article 3(3);
(b) the criteria in Article 2(1) or Article 4(1) are satisfied.
4. Paragraphs 2 and 3 shall not apply to institutions that are subject to a recovery plan as referred to in Article 8(2)(b) of Directive 2014/59/EU.
5. Competent and resolution authorities shall coordinate the assessments referred to in this Article and exchange all necessary information within the framework of supervisory and resolution colleges.
Article 6 
Competent and resolution authorities may regard promotional banks, as defined in Article 3(27) of Commission Delegated Regulation (EU) 2015/63, as institutions the failure of which would not be likely to have a significant negative effect on financial markets, other institutions or funding conditions, without applying paragraphs 2 and 7 of Article 1 and Article 5(3), where the qualitative considerations of Article 2(1) are not satisfied at any of the following levels:

((a)) the level of the Union parent undertaking;
((b)) the level of each parent undertaking in a Member State or, where there is no parent undertaking in a Member State, the level of each stand-alone subsidiary of the group in a Member State.
Article 7 
Competent and resolution authorities may regard credit institutions that are subject to an orderly winding-up process as institutions the failure of which is not likely to have a significant negative effect on financial markets, other institutions or funding conditions, without the application of paragraphs 2 and 7 of Article 1 and Article 5(3), where the qualitative considerations of Article 2(1) are not satisfied at any of the following levels:

((a)) the level of the Union parent undertaking;
((b)) the level of each parent undertaking in a Member State or, where there is no parent undertaking in a Member State, the level of each stand-alone subsidiary of the group in a Member State.
Article 8 
Taking into account different purposes of recovery and resolution planning, competent and resolution authorities from the same Member State may reach different conclusions with regard to the application of Articles 1 to 4, 6 and 7, in which case they shall regularly assess whether those different conclusions remain justified.
Article 9 
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 25 October 2018.
For the Commission
The President
Jean-Claude JUNCKER
ANNEX 1
Criterion Indicator for credit institutions Weight
Size Total assets 25 %
Interconnected-ness Intra-financial system liabilities 8,33 %
Intra-financial system assets 8,33 %
Debt securities outstanding 8,33 %
Scope and complexity of activities Value of over-the-counter (OTC) derivatives (notional) 8,33 %
Cross-jurisdictional liabilities 8,33 %
Cross-jurisdictional claims 8,33 %
Nature of business Private sector deposits from depositors in the EU 8,33 %
Private sector loans to recipients in the EU 8,33 %
Value of domestic payments 8,33 %
1.. For each indicator listed in Table 1, the corresponding value shall be determined using the specifications provided in Annex III.
2.. The indicator value for each credit institution shall be divided by the aggregate amount of the corresponding indicator value for all credit institutions authorised in the Member State and, where the relevant data are available, branches established in the Member State concerned including Union branches established in that Member State.
3.. The resulting ratios shall be multiplied by 10 000 to express the indicator scores in terms of basis points.
4.. Each of the indicator scores (expressed in basis points) shall be multiplied by the weight assigned to each indicator as set out in Table 1.
5.. The total quantitative score shall be the sum of all of the weighted indicator scores.

ANNEX 2
Criterion Indicator for investment firms
Size Total assets
Total liabilities
Total fees and commission income
Assets under management
ANNEX 3
Indicator Scope Specifications
Total assets Worldwide FINREP (IFRS or GAAP) → F 01.01, row 380, column 010
Total liabilities Worldwide FINREP (IFRS or GAAP) → F 01.02, row 300, column 010
Total fees and commission income Worldwide FINREP (IFRS or GAAP) → F 02.00, row 200, column 010
Assets under management Worldwide FINREP (IFRS or GAAP) → F 22.02, row 010, column 010
Intra-financial system liabilities Worldwide FINREP (IFRS or GAAP) → F 20.06, rows 020 + 030 + 050 + 060 + 100 + 110, column 010, All countries (z-axis)
Intra-financial system assets Worldwide FINREP (IFRS or GAAP) → F 20.04, rows 020 + 030 + 050 + 060 + 110 + 120 + 170 + 180, column 010, All countries (z-axis)
Debt securities outstanding Worldwide FINREP (IFRS or GAAP) → F 01.02, rows 050 + 090 + 130, column 010
Value of OTC derivatives (notional) Worldwide FINREP (IFRS) → F 10.00, rows 300 + 310 + 320, column 030 + F 11.00, rows 510 + 520 + 530, column 030FINREP (GAAP) → F 10.00, rows 300 + 310 + 320, column 030 + F 11.00, rows 510 + 520 + 530, column 030
Cross-jurisdictional liabilities Worldwide FINREP (IFRS or GAAP) → F 20.06, rows 010 + 040 + 070, column 010, All countries except home country (z-axis)Note: The calculated value should exclude (i) intra-office liabilities and (ii) liabilities of foreign branches and subsidiaries vis-à-vis counterparties in the same host country
Cross-jurisdictional claims Worldwide FINREP (IFRS or GAAP) → F 20.04, rows 010 + 040 + 080 + 140, column 010, All countries except home country (z-axis)Note: The calculated value should exclude (i) intra-office assets and (ii) assets of foreign branches and subsidiaries vis-à-vis counterparties in the same host country
Private sector deposits from depositors in the EU EU only FINREP (IFRS or GAAP) → F 20.06, rows 120 + 130, column 010, EU countries (z-axis)
Private sector loans to recipients in the EU EU only FINREP (IFRS or GAAP) → F 20.04, rows 190 + 220, column 010, EU countries (z-axis)
Value of domestic payment transactions Worldwide Payments made in the reporting year (excluding intra-group payments): this indicator is calculated as the value of a bank's payments sent through all of the main payment systems of which it is a member.Report the total gross value of all cash payments sent by the relevant entity via large-value payment systems and the gross value of all cash payments sent through an agent bank (e.g. using a correspondent or nostro account) over the reporting year in each indicated currency. All payments sent via an agent bank should be reported, regardless of how the agent bank actually settles the transaction. Do not include intra-group transactions (i.e. transactions processed within or between entities in the same group as the relevant entity). If precise totals are unavailable, known overestimates may be reported.Payments should be reported regardless of the purpose, location or settlement method. This includes, but is not limited to, cash payments associated with derivatives, securities financing transactions and foreign exchange transactions. Do not include the value of any non-cash items settled in connection with these transactions. Include cash payments made on behalf of the reporting entity as well as those made on behalf of customers (including financial institutions and other commercial customers). Do not include payments made through retail payment systems.Include only outgoing payments (i.e. exclude payments received). Include the amount of payments made via Continuous Linked Settlement (CLS). Other than CLS payments, do not net any outgoing wholesale payment values, even if the transaction was settled on a net basis (i.e. all wholesale payments made via large-value payment systems or through an agent must be reported on a gross basis). Retail payments sent via large-value payment systems or through an agent may be reported on a net basis.Please report values in euros, using the official rate specified at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm (for monthly rates) or http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html (for daily rates).