Amendment of Rights Procedure
Article 19
1. The competent authority may conduct the amendment of rights procedure on the SIFI under resolution by amending the rights of its creditors and capital instrument holders to the extent that enables the institution to recover its status and fulfill statutory requirements.
2. The competent authority may amend the rights of creditors and capital instrument holders in the SIFI under resolution prior to the sale of any of its shares, stocks, assets, or labilities, or the transfer thereof to the transitional entity, the transferee, or the asset management entity.
3. When converting the debts of the SIFI under resolution to capital instruments, the competent authority shall take into account the priority of the debts in its conversion rates, in accordance with the Implementing Regulations.
4. The holder of the reduced capital instrument shall not be entitled to any amount or compensation, unless the maturity of such amount or compensation occurs prior to the reduction.
5. The Implementing Regulations shall regulate the handling of derivatives to which the SIFI under resolution is party.
Article 20
The competent authority may not amend any of the following rights and liabilities:
1. Deposits, as determined by the competent authority.
2. Insurance policies.
3. Guaranteed liabilities, except where the value of the guarantee exceeds the value of the liability.
4. Client assets and funds, as determined by the competent authority.
5. Consignments.
6. Any liability due in less than seven days, except for liabilities owed to an institution within the same financial group.
7. Any due liability resulting from subscription to settlement systems.
8. Dues of employees of the SIFI under resolution, except for performance bonuses.
9. Liabilities arising from the import of goods and services essential to the daily operations of the SIFI under resolution, including e-services, utility bills, rent, maintenance services, and the like, except for liabilities owed to institutions within the same financial group.
10. Zakat and social security dues.
11. Resolution funds dues.
12. Rights and liabilities which the competent authority considers, when implementing the amendment of rights procedure, important to be excluded entirely or partially from the amendment, to establish financial stability, ensure continuity of the critical activities of the SIFI under resolution, or maintain the value of such liabilities, if the amendment thereof would affect the rights of other creditors more than the exclusion thereof from amendment.
Article 21
1. The SIFI subject to the amendment of rights procedure shall, within 30 days from the conclusion of the procedure, submit to the competent authority an action plan which includes the following:
a) A detailed account of the factors leading to the crisis.
b) A description of the procedures to be taken to achieve recovery in the long term.
c) A timeframe to implement such procedures.
2. The competent authority shall, within 30 days from receipt of the plan, decide whether to approve the plan or notify the SIFI of required amendments. The SIFI shall amend the plan and resubmit the same to the competent authority within 14 days.
3. Semi-annual progress reports on the implementation of the plan shall be submitted by the SIFI or at the request of the competent authority.
4. The competent authority may include in the Implementing Regulations additional rules and provisions governing the preparation of the action plan.