Law

The Bank Recovery and Resolution (No. 2) Order 2014

United Kingdom · regulation

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In force since 2026-01-01, as the publisher states.

Copy read on 2026-11-10. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 208 provisions

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208 provisions

82 Requesting the assistance of EBA

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83 Application and interpretation of Chapter 1

(1) This Chapter applies where, in relation to a relevant group— (a) the PRA or FCA is the consolidating supervisor; and (b) the PRA or FCA (or each of them) receives from the UK parent undertaking an application for authorisation of a group financial support agreement (“the application”). (2) In this Chapter— ... “conditions for financial support” means the following conditions— there is a reasonable prospect that the financial support provided significantly redresses the financial difficulties of the group entity receiving the financial support; the provision of financial support has the objective of preserving or restoring the financial stability of the group as a whole or any of the entities of the group and is in the interests of the group entity providing the financial support; the financial support is provided on terms, including consideration, in accordance with Article 19.7 of the recovery and resolution directive; there is a reasonable prospect, on the basis of the information available to the management body of the group entity providing financial support at the time when the decision to grant financial support is taken, that the consideration for the support will be paid and, if the financial support is given in the form of a loan, that the loan will be reimbursed, by the group entity receiving the financial support; if the financial support is given in the form of a guarantee or any form of security and the guarantee or the security is enforced, the condition referred to in paragraph (d) shall apply to the liability arising for the recipient; the provision of the financial support would not jeopardise the liquidity or solvency of the group entity providing the financial support; the provision of the financial support would not create a threat to financial stability in the United Kingdom; the group entity providing the financial support complies, at the time the financial support is provided, with— the requirements relating to capital or liquidity imposed by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to the capital requirements directive; and the requirements imposed by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to Article 104.2 of the capital requirements directive, and the provision of the financial support shall not cause the group entity to infringe those requirements, unless the group entity is authorised by the appropriate regulator on an individual basis; the provision of the financial support would not undermine the resolvability of the group entity providing the financial support. “financial support” includes— a loan, a guarantee, the provision of assets for use as collateral or any combination of these forms of support; and provision for support (in any form) in one or more transactions or in a transaction entered into by the group institution which is the intended recipient of the support and any other person; “group entity” means a relevant parent undertaking or group subsidiary which proposes to enter into the group financial support agreement; “group financial support agreement” means an agreement— which is proposed for the provision of financial support to a group institution which, at any time after the agreement has been concluded, meets the conditions for early intervention; and the parties to which include a relevant parent undertaking and one or more group subsidiaries set up in any country , other than the United Kingdom, in which the relevant parent undertaking is set up; “group institution” means a group entity which is an institution; “group subsidiary” means an undertaking which is— a subsidiary of a relevant parent undertaking; and an institution or financial institution; “relevant competent authority” means a competent authority, other than the consolidating supervisor, which has authorised a group entity; and “relevant parent undertaking” means a UK parent institution, a financial holding company, a mixed financial holding company or a mixed activity holding company. (2A) The PRA and the FCA may each make technical standards relating to conditions (a), (c), (f) and (i) of the definition of “conditions for financial support” provided in paragraph (2) in so far as those conditions apply to a group financial support agreement submitted to it by a UK parent undertaking.

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84 Review of group financial support agreement and decision on authorisation

(1) The appropriate regulator must review the group financial support agreement jointly with the relevant competent authority. (2) The purpose of the review is to determine whether— (a) the terms of the agreement are compatible with the conditions for financial support, including whether they make provision to ensure that financial support would be given in accordance with those conditions; and (b) any group institution already meets the conditions for early intervention. (3) The matter referred to in paragraph (2)(a) is to be determined having regard to the potential impact of the agreement, if it is concluded, on the financial stability of the United Kingdom. (4) The appropriate regulator must refuse the application and prohibit the conclusion of the group financial support agreement if it is determined on review that— (a) the terms of the agreement are not compatible with the conditions for financial support; or (b) a group institution already meets the conditions for early intervention. (5) The appropriate regulator must otherwise grant the application.

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85 Duty to transmit a copy of application

(1) The appropriate regulator must send a copy of the application or, where paragraph (2) has effect in relation to any information, of the application without that information, without delay to any relevant competent authority. (2) This article does not require any information contained in the application to be disclosed if its disclosure would be contrary to section 348 of FSMA.

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86 Joint decision with other competent authorities

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87 References to EBA

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88 Requesting the assistance of EBA

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89 Duty to transmit a copy of authorised agreement

The appropriate regulator must send a copy of the group financial support agreement, if it is authorised, to the Bank ....

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90 Amendment of authorised agreement

(1) This article applies where— (a) the parties to an agreement authorised under this Chapter wish to amend the agreement; and (b) rules made by the PRA or FCA under FSMA require the amendment to be authorised before it is made. (2) If the UK parent undertaking submits to the appropriate regulator an application for authorisation of the amendment (“the amendment application”), the appropriate regulator must treat the amendment application as if it were an application for authorisation of a group financial support agreement. (3) Articles 84 to 89 apply for that purpose, but have effect in relation to the amendment application as if— (a) each reference to a group financial support agreement were a reference to the amendment set out in the amendment application; and (b) each reference to the application were a reference to the amendment application.

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91 Application and interpretation of Chapter 2

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92 Review of group financial support agreement and decision on authorisation

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93 Joint decision with other competent authorities

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94 References to EBA

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95 Requesting the assistance of EBA

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96 Amendment of authorised agreement

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97 Interpretation of Chapter 3

(1) In this Chapter— “authorised agreement” means a group financial support agreement (within the meaning given in Chapter 1) authorised by the PRA or FCA, and includes any amendment authorised by the PRA or FCA; “director” includes— a director of a company; a member of a limited liability partnership; and a director of a building society established under the Building Societies Act 1986 ; “member” includes— a shareholder of a company; a member of a limited liability partnership; and a shareholding or borrowing member of a building society established under the Building Societies Act 1986 (“shareholding member” and “borrowing member” have the meaning given in paragraph 5(2) of Schedule 2 to that Act); “ordinary resolution”— in relation to a resolution passed at a meeting on a show of hands, means a resolution passed by a simple majority of the votes cast by those entitled to vote; in relation to a resolution passed on a poll taken at a meeting, means a resolution passed by members representing a simple majority of the total voting rights of the members who (being entitled to do so) vote on the resolution; in relation to a written resolution, means a resolution passed by members representing a simple majority of the total voting rights of those eligible to vote on a written resolution; and “UK group entity”, in relation to an authorised agreement, means— the relevant parent undertaking, if it is set up in the United Kingdom; a group subsidiary set up in the United Kingdom. (2) In this article, for the interpretation of “UK group entity”, the expressions “group subsidiary” and “relevant parent undertaking” have the meaning given in Chapter 1.

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98 Requirement for approval of authorised agreement

(1) An authorised agreement entered into by a UK group entity is only valid in respect of that entity if its members have approved the agreement in accordance with this article. (2) An authorised agreement is deemed to be approved by the members of a UK group entity if an ordinary resolution approving the agreement is passed by the members— (a) present and voting either in person or by proxy at a meeting; or (b) by way of a written resolution proposed by the directors of the entity. (3) An ordinary resolution may not be passed unless the directors of the entity make available to its members a memorandum setting out the proposed resolution and the terms of the authorised agreement— (a) in the case of a written resolution, by sending the memorandum to every member at or before the time at which the proposed resolution is submitted to the members; (b) in the case of a resolution at a meeting, by making the memorandum available for inspection by the members— (i) at the entity's registered office for not less than fifteen days ending with the date of the meeting; and (ii) at the meeting itself.

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98A Publication of information concerning group financial support agreements

The PRA and the FCA may each make technical standards relating to the form and content of any description of entry into a group financial support agreement which the directors of a UK group entity are required to publish by rules made by the PRA or the FCA under Part 9A of FSMA.

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99 Revocation of authorised agreement

(1) This article applies where a UK group entity has entered into an authorised agreement which has been approved in accordance with article 98. (2) The authorised agreement remains valid in respect of the UK group entity for as long as the members of the entity have not revoked their approval in accordance with this article. (3) Paragraph (4) applies where at least five per cent. of the members of the entity require the directors to— (a) call a general meeting of the entity to determine whether their approval of the authorised agreement should be revoked; or (b) circulate a written resolution proposing that the approval should be revoked. (4) The members' approval of the authorised agreement is revoked if an ordinary resolution revoking it is passed by the members— (a) present and voting either in person or by proxy at a general meeting; or (b) by way of a written resolution proposed by the directors. (5) An ordinary resolution may not be passed unless the directors of the entity make available to its members a memorandum setting out the proposed resolution— (a) in the case of a written resolution, by sending the memorandum to every member at or before the time at which the proposed resolution is submitted to the members; (b) in the case of a resolution at a general meeting, by making the memorandum available for inspection by the members— (i) at the entity's registered office for not less than fifteen days ending with the date of the meeting; and (ii) at the meeting itself.

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100 Obligation to provide annual report

(1) The directors of the UK group entity which has entered into an authorised agreement must prepare an annual report on the performance of the agreement and the implementation of any decision taken pursuant to it. (2) The directors must deliver a copy of the annual report to every member of the entity, electronically or by other means, no later than the first and each subsequent anniversary of the date on which the entity enters into the agreement.

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101 Interpretation of Chapter 4

(1) In this Chapter— “authorised agreement” has the same meaning as in Chapter 3; ... “conditions for financial support” has the same meaning as in Chapter 1; “financial support” has the same meaning as in Chapter 1; “group entity” means a relevant parent undertaking or group subsidiary which has entered into a group financial support agreement authorised by the PRA or FCA (“the agreement”); “intended recipient” means the group institution named in a relevant notice as the recipient of the financial support referred to in the notice; “notifying group entity” means the group entity which has given a relevant notice; “relevant competent authority” means a competent authority, other than the consolidating supervisor, which has authorised a group entity; “relevant notice” means a notice— given by a group entity; stating an intention to provide financial support under an authorised agreement; and required by rules made by the PRA or FCA under Part 9A of FSMA; “UK group entity” means a group entity set up in the United Kingdom. (2) In this article, for the interpretation of “group entity” and “intended recipient”, the expressions “group subsidiary”, “group financial support agreement”, “group institution” and “relevant parent undertaking” have the meaning given in Chapter 1.

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102 Relevant notice from UK group entity: decision by the PRA or FCA

(1) Where the PRA or FCA receives a relevant notice from a UK group entity, it must, within five business days beginning with the date on which it receives the notice, decide whether to— (a) agree the provision of the financial support to which the notice refers; or (b) prohibit or restrict the provision of that financial support on the ground that the conditions for financial support have not been met. (2) The regulator must give written notice of its decision, including a reasoned account of the decision— (a) to the notifying group entity; and (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) unless the regulator is the consolidating supervisor, to the consolidating supervisor; (d) unless the regulator is the competent authority for the intended recipient, to that authority; and (e) where the regulator has authorised the intended recipient, to the intended recipient. (3) In this article “the regulator”— (a) where the relevant notice is received from a PRA-authorised person, means the PRA; and (b) where the relevant notice is received from any other UK group entity, means the FCA. (4) In this article “business day” has the same meaning as in section 70D(1) of the Banking Act 2009 .

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103 Duties of consolidating supervisor where financial support agreed, prohibited or restricted

(1) This article applies where the PRA or FCA is the consolidating supervisor. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Paragraph (4) applies where— (a) a competent authority prohibits or restricts the provision of financial support to which a relevant notice refers; (b) the group recovery plan refers to the provision of group financial support; and (c) either— (i) the relevant competent authority for the intended recipient asks the appropriate regulator for a re-assessment of the plan; or (ii) the appropriate regulator is the competent authority for the intended recipient. (4) The appropriate regulator— (a) must consider whether to require the group recovery plan to be reviewed under article 34; and (b) if the appropriate regulator is the competent authority for the intended recipient and the intended recipient has drawn up a recovery plan on an individual basis, must consider whether to require that plan to be reviewed under article 33. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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104 Re-assessment of recovery plans by the PRA or FCA where it is not the consolidating supervisor

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105 Requesting the assistance of EBA

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106 Reciprocal support

Where the PRA or FCA agrees the provision, with or without restrictions, of the financial support to which a relevant notice refers, the notifying group entity may agree with the intended recipient of that support to receive financial support from the intended recipient.

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107 Interpretation of Chapter 1

In this Chapter— “measure for early intervention” means a relevant measure which may be taken by the PRA or FCA in exercise of its powers under FSMA with the object of addressing the conditions for early intervention; ... “relevant institution” means an institution which is authorised by the PRA or FCA and is not part of a group subject to supervision on a consolidated basis in accordance with the capital requirements regulation and CRR rules , and “relevant measure” means a measure— requiring an institution to— implement one or more of the arrangements or measures set out in the recovery plan; or review and (if appropriate) amend a recovery plan in accordance with article 33 when the circumstances that led to early intervention are different from the assumptions set out in the initial recovery plan and implement one or more of the arrangements or measures set out in the updated plan within a specified timeframe and to ensure that the conditions referred to in the introductory phase no longer apply; requiring the management body of an institution to examine the situation, identify measures to overcome any problems identified and draw up an action programme to overcome those problems and a timetable for its implementation; requiring the management body of an institution to convene, or, if the management body fails to comply with the requirement, to convene directly, a meeting of shareholders of the institution, and in both cases setting the agenda and requiring certain decisions to be considered for adoption by the shareholders; requiring any person to be removed or replaced if an approval is withdrawn from that person under section 63 of FSMA; requiring the management body of an institution to draw up a plan for negotiation on restructuring of debt with some or all of its creditors in accordance with any recovery plan; requiring changes to the institution's business strategy; requiring changes to the legal or operational structures of the institution; or acquiring (including through on-site inspections) and providing to the Bank all the information necessary to update the resolution plan and preparing for the possible resolution of the institution and for valuation of the assets and liabilities of the institution in accordance with section 6E or 48X of the Banking Act 2009; “temporary manager” means a temporary manager appointed by the appropriate regulator under section 71C of FSMA.

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108 Notice that institution meets the conditions for early intervention

(1) The appropriate regulator must notify the Bank without delay if it determines that a relevant institution meets the conditions for early intervention or the appointment of a temporary manager. (2) The PRA and the FCA may each make technical standards relating to the circumstances in which a relevant institution may be taken as meeting the conditions for early intervention.

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109 Deadline for compliance with measure for early intervention

The appropriate regulator may not take a measure for early intervention in respect of a relevant institution without prescribing a date before which the action required to be taken in compliance with the measure is to be completed.

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110 Application and interpretation of Chapter 2

(1) This Chapter applies where the PRA or FCA is the consolidating supervisor in relation to a relevant group. (2) In this Chapter— “measure for early intervention”— ... has the same meaning as in Chapter 1; ... ... temporary manager” means— in relation to a UK group entity, a temporary manager appointed by the appropriate regulator under section 71C of FSMA; ... “UK group entity” means— the UK parent undertaking...; a group subsidiary which is an institution authorised by the PRA or FCA.

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111 Procedure for early intervention in respect of a UK group entity

(1) This article applies where the appropriate regulator proposes to take a measure for early intervention or appoint a temporary manager in respect of a UK group entity. (2) The appropriate regulator must without delay give notice of its proposal to the Bank.... (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) The appropriate regulator must give the Bank notice of a decision to take a measure for early intervention or to appoint a temporary manager in respect of a UK group entity. (5) The appropriate regulator may not take a measure for early intervention without prescribing a date before which the action required to be taken in compliance with the measure is to be completed. (6) The appropriate regulator must give the UK group entity referred to in a notice given under paragraph (4) and the UK parent undertaking, if it is not the entity concerned, written notice of its decision to take a measure for early intervention or to appoint a temporary manager, including a reasoned account of the decision.

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