ESMA and EBA: institutions and authorities must consider retail holders of debt financial instruments in resolutions

The issue of retail holders of debt financial instruments remains significant considering that, on the basis of the data analysis conducted by EBA and ESMA, retail investors still hold a significant portion of EU debt securities issued by institutions. 

The statement points out that the BRRD does not provide for different treatment of eligible liabilities based on the nature of the holder. Therefore, where there is a material presence of retail debt investors, resolution authorities are encouraged to factor this element into their resolution planning and assessment of possible impediments to resolution.

The EBA and ESMA also call for a cooperative dialogue between resolution and market authorities and the sharing of information when this issue is relevant.

The statement reminds institutions that in relation to:

–          the outstanding legacy stock of issuances of retail debt liabilities, they provide existing clients with complete and updated information on the potential treatment of such investments in resolution or insolvency; and

–          new debt financial instruments being issued under the framework of MiFID II, they properly implement the new requirements, which include a number of provisions aiming at strengthening investor protection.


The treatment of retail debt holders in resolution is closely interlinked to consumer protection issues. On this basis, the EBA and ESMA have developed this Statement in order to benefit from the EBA’s prudential role and expertise in resolution and, on from the consumer perspective, from ESMA’s role and expertise on the distribution of financial instruments to investors.

The statement is supported by data analysis assessing the relevance of retail investors as direct holders of debt issued by EU financial institutions, which is largely based on data derived from the ECB securities database.

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