rec_36

(36) During the recovery and early intervention phases, shareholders should retain their rights in full. They should lose such rights once the CCP has been put under resolution. Any remuneration of equity and instruments treated as equity, including dividend payments and buybacks by the CCP, should be restricted or prohibited in recovery, to the fullest extent possible without triggering an event of default. Equity holders of a CCP should absorb losses first in resolution in a way that minimises the risk of legal challenge by them where such losses are greater than the losses that they would have incurred under normal insolvency proceedings also known as the ‘no creditor worse off’ principle. A resolution authority should be able to deviate from the ‘no creditor worse off’ principle. However, a shareholder or a creditor incurring greater loss than it would have incurred under normal insolvency proceedings would be entitled to the payment of the difference.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-12 · Text as adopted (Official Journal); later amendments are not incorporated in this text.