Subsection 3: Provisions relating to minimum capital requirements and eligible commitments

I.-The minimum requirement referred to in IV of Article L. 613-44 shall be met by means of one or more of the following commitments or own funds:

1° Commitments:

a) which are issued to the resolution entity and purchased by it directly or indirectly through other entities within the same resolution group, or which are issued to and purchased by an existing shareholder that is not part of the same resolution group, as long as the exercise of the power referred to in I of Article L. 613-48 does not affect the control of the subsidiary by the resolution entity; b) which meet the eligibility criteria set out in Article 72a of Regulation (EU) No. 575/2009. 613-48 does not affect the control of the subsidiary by the resolution entity;

b) Which meet the eligibility criteria set out in Article 72a of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013, with the exception of Article 72b(2)(b), (c), (k), (l) and (m) and paragraphs 3 to 5 of that Regulation ;

c) Whose ranking, in the context of winding-up proceedings taken pursuant to Book VI of the French Commercial Code, is lower than the commitments which do not meet the condition mentioned in a) and which are not and have not been before 28 December 2020 eligible for capital requirements;

d) Which are subject to the power mentioned in Article L. 613-48 under conditions, consistent with the resolution strategy of the resolution group, which do not affect the control of the subsidiary by the resolution entity;

e) Whose acquisition of ownership is not financed, directly or indirectly, by the entity referred to in IV of Article L. 613-44;

f) The provisions governing these commitments do not explicitly or implicitly provide for their repurchase, redemption or early repayment by the issuing entity in circumstances other than the opening of one of the procedures provided for in Book VI of the Commercial Code;

g) whose governing provisions do not give the holder the right to receive interest or the principal in advance of the original schedule, in circumstances other than the opening of one of the procedures provided for in Book VI of the Commercial Code;

h) whose level of interest or dividends payable is not modified on the basis of the credit quality of the entity issuing the commitments or its parent undertaking;

2° Own funds which are :

a) Tier 1 core capital;

b) Other own funds issued:

i) in favour of entities forming part of the same resolution group and purchased by them, or;

ii) in favour of entities not forming part of the same resolution group and purchased by them as long as the exercise of the power referred to in Article L. 613-48 does not affect the control of the subsidiary by the resolution entity.

II - Where a subsidiary and a resolution entity are established in France and form part of the same resolution group, the resolution college may authorise the minimum requirement mentioned in I to be met in full or in part by means of a guarantee granted by the resolution entity. This guarantee must meet the following conditions:

1° It is granted for an amount equivalent to the amount of the requirement it replaces;

2° It is triggered either when the subsidiary is unable to pay its debts or other commitments as they fall due, or when the determination referred to in III of Article L. 613-48-2 has been made in respect of the subsidiary, whichever occurs first;

3° At least 50% of the amount is secured under a financial collateral arrangement as defined in Article L. 211-38;

4° The collateral attached to the guarantee meets the requirements set out in Article 197 of Regulation (EU) No 575/2013 mentioned above, in an amount which, after application of sufficiently prudent discounts, is sufficient to cover the guaranteed amount referred to in 3°;

5° The same collateral is not encumbered and, in particular, is not used to cover another guarantee;

6° The collateral has an effective maturity which complies with the same condition relating to maturity as that referred to in Article 72c(1) of the aforementioned Regulation (EU) No 575/2013;

7° There are no legal, regulatory or operational obstacles to the transfer of collateral from the resolution entity to the subsidiary concerned, including where the resolution entity is subject to a resolution measure. At the request of the resolution college, the resolution entity shall provide a written, independent and reasoned legal opinion or demonstrate by any other appropriate means the absence of such obstacles.