4.8.2.2 Procedural requirements

The bank should maintain at all times a sufficient amount of authorized share capital or other CET 1 instruments, so that, in the event that the resolution authority exercises the PONV conversion power or the bail-in tool, the bank is not prevented from issuing sufficient new shares or other instruments of ownership to ensure that the conversion of eligible liabilities into shares or other instruments of ownership could be carried out effectively.1 The resolution authority can decide to lay down this requirement in the resolution plan.2

If the PONV conversion power is exercised or the bail-in tool is applied, the reduction of principal or outstanding amount due, conversion or cancellation takes effect and is immediately binding on the bank in resolution and affected creditors and shareholders.3 The resolution authorities have the power to complete or require the completion of all the administrative and procedural tasks necessary to give effect to the application of the PONV conversion power or the bail-in tool, including (a) the amendment of all relevant registers, (b) the delisting or removal from trading of debt instruments, (c) the listing or admission to trading of new shares or other instruments of ownership, or (d) the relisting or readmission of any debt instruments which have been written down, without the requirement of issuing a prospectus.4