RAR 3.4.1 Guidance

1. The DFSA may apply the Bail-in Tool if there is a reasonable prospect that applying the tool together with other relevant measures can, in addition to achieving the relevant Resolution Objectives, restore the Authorised Firm to financial soundness and long-term viability. The Bail-In Tool may also be applied in connection with the Sale of Business Tool.
2. In exercising its discretion under RAR Rule 3.4.1(4), the DFSA will consider:
a. the need not to apply any bail-in to a netting set before such netting is completed;
b. the need to avoid disruption to AMIs, Regulated Exchanges, payment systems, Central Counterparties, Securities Settlement Systems and Central Securities Depositories;
c. the principle that losses shall be borne first by shareholders and subsequently by creditors of the Authorised Firm in Resolution in order of preference in light of the Resolution Objectives;
d. the level of LAC that will remain in the Authorised Firm in Resolution if the liability or class of liabilities were excluded; and
e. the need to maintain adequate resources for Resolution financing.


Derived from DFSA RMI283/2020 (Made 16th December 2020). [VER1/04-21]