A recovery plan sets out the measures the company in question would need to take following a deterioration in its financial position. In some cases, entities may be subject to simplified requirements.
As part of the crisis prevention framework, the competent authorities may also intervene at an early stage when an entity falling within the scope of the SRM has infringed, or is liable in the near future to infringe its prudential requirements. They can oblige the entity to take any of the following actions:
- implement its recovery plan or an action plan,
- modify its commercial strategy,
- negotiate a restructuring of its debts with its creditors,
- remove or replace one or more of its managers,
- call a general meeting of shareholders to vote on an agenda established by the competent authority.
If these measures are insufficient to halt the deterioration in the entity's finances, if the situation worsens, or if further infringements or irregularities are noted, the competent authority may demand the removal of the senior management or management body. The appointment of new senior managers or a new management body is subject to approval or consent by the authority. If the replacement of the senior management or management body is deemed insufficient to remedy the situation, the competent authority can appoint a temporary administrator either to replace the management body or to work with it temporarily.