Question
What is the definition of a "material penalty" and "individually justified circumstances"? Who will be the final arbiter in determining the “materiality” of the penalty for early withdrawal within 30 days?
Answer
If a term is not defined in Regulation (EU) No 575/2013, the Q&A process cannot be used to provide a formal, legal definition. Non-defined terms must be interpreted - by institutions and subject to overall supervision carried out by competent authorities - according to the general meaning of the terms used, together with other recognised interpretative methods, such as contextual interpretation and by identifying the objective of the concerned provisions. DISCLAIMER: This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Internal Market and Services) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.