Recital (6)

The Board can currently decide to prohibit certain distributions where an entity, whether or not it is a resolution entity, fails to meet the combined buffer requirement when considered in addition to the minimum requirement for own funds and eligible liabilities (MREL). However, to ensure legal certainty and alignment with the existing procedures for the implementation of decisions taken by the Board, it is necessary to specify more clearly the roles of the authorities involved in the process for prohibiting such distributions. It is therefore appropriate to lay down that the Board should instruct the national resolution authority to prohibit such distributions, which should implement the Board’s instruction. In addition, in certain situations, an entity might be required to comply with the MREL on a different basis than the basis on which that entity is required to comply with the combined buffer requirement. That situation creates uncertainties as to the conditions for the exercise of the Board’s powers to prohibit distributions and for the calculation of the Maximum Distributable Amount related to the MREL. It should therefore be laid down that, in those cases, the Board should instruct national resolution authorities to prohibit certain distributions on the basis of the estimated combined buffer requirement resulting from the methodology set out in the delegated act adopted pursuant to Article 45c(4) of Directive 2014/59/EU. To ensure transparency and legal certainty, the Board should communicate the estimated combined buffer requirement to the entity, which should then make that estimated combined buffer requirement publicly available.