Chapter I: General provisions.

The other convertible instruments referred to in Article L. 511-81 that may be used for the allocation of variable remuneration are the only instruments that may be fully converted into Tier 1 core capital instruments as defined by Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013.

Credit institutions and finance companies shall require the instruments referred to in Article L. 511-81 to be held for a minimum period defined under the conditions set out in Article L. 511-72 in order to protect the long-term interests of the credit institution or finance company referred to in Article L. 511-71.

For the application of article L. 511-84, the conduct likely to result in the reduction or restitution, in whole or in part, of the variable remuneration shall be defined by the credit institutions and finance companies in particular in consideration of the serious losses that they may cause to these institutions or companies. The decision to reduce or refund the variable remuneration referred to in the first paragraph of this…

The deferred instruments referred to in Article L. 511-79 are equity instruments, debt instruments or other instruments referred to in Article L. 511-81. Credit institutions and finance companies update the variable remuneration mentioned in article L. 511-79 according to the inflation rate and the risk incurred, which includes the duration of the deferment period. An order of the Minister for the Economy specifies the methods for calculating the discount rate.