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

160 Assessment of business reorganisation plan

The Bank must assess the business reorganisation plan jointly with the appropriate regulator within one month beginning with the date on which it receives the plan.

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161 Purpose of assessment

(1) The purpose of the assessment of the business reorganisation plan is to determine whether the plan meets the criteria for assessment. (2) The Bank must approve the plan when the Bank and the appropriate regulator are satisfied that the plan meets the criteria for assessment. (3) The criteria for assessment are that— (a) the plan must include the details specified in— (i) section 48H(2) of the Banking Act 2009; (ii) any technical standards made under paragraph (4)(a); (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) the arrangements proposed in the plan would, if implemented, be reasonably likely to restore the long-term viability of the institution or of part of its business. (d) the arrangements proposed in the plan must be based on realistic assumptions as to the economic and financial market conditions under which the institution will operate; (e) the plan must take account of the current state of the financial markets and their future prospects, reflecting best-case and worst-case assumptions, including a combination of events allowing the identification of the institution's main vulnerabilities; (f) the assumptions made in the plan must be compared with appropriate sector-wide benchmarks; (g) the plan meets any further criteria specified in technical standards made under paragraph (4)(b). (4) The Bank may make technical standards specifying— (a) further details to be included in business reorganisation plans; or (b) further criteria for the assessment of business reorganisation plans.

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162 Revision of plan

(1) The Bank— (a) must notify the management body or resolution administrator if the business reorganisation plan is found on assessment to contain any material deficiency or measure which would impede its implementation or the object of restoring the long-term viability of the institution or of part of its business; and (b) may not require the management body or resolution administrator to revise the plan without giving it an opportunity to state its opinion on that requirement. (2) If the Bank requires the management body or resolution administrator to revise the plan, the Bank— (a) must allow two weeks for the preparation of a plan which demonstrates that the impediment has been addressed; (b) within one week beginning with the date on which a revised plan is submitted, must notify the management body or resolution administrator whether the impediment has been adequately addressed in the revised plan; and (c) if the impediment has not been adequately addressed in the revised plan, must direct the management body or resolution administrator to make specific changes to the plan.

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163 Application and interpretation of Chapter 2

(1) This Chapter applies where, in relation to a relevant group— (a) the Bank has made a resolution instrument under section 12A of the Banking Act 2009 in respect of a single group entity which is not an institution (“the relevant entity”); and (b) the management body of the relevant entity or the resolution administrator submits a to the Bank for assessment .... (2) In this Chapter “business reorganisation plan” has the meaning given in section 48H of the Banking Act 2009, as applied by section 81BA of that Act and “resolution administrator” has the same meaning for the relevant entity as it has for an institution in Chapter 1.

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164 Assessment etc of business reorganisation plan

Chapter 1 applies for the purpose of the assessment and approval of the business reorganisation plan, but has effect for that purpose with the modifications specified in the table— Article | Modification Article 159 | Ignore this article. Articles 160,161 and 162 | Each reference to an institution is a reference to the relevant entity. ... ...

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165 Application and interpretation of Chapter 3

(1) This Chapter applies where, in relation to a relevant group— (a) the PRA or FCA is the consolidating supervisor; (b) a relevant bail-in power has been exercised in respect of two or more group entities; and (c) a group entity submits a business reorganisation plan to the Bank for assessment in accordance with section 48H of the Banking Act 2009 (including that section as applied in consequence of the provision made by section 81BA, 83A, 84 or 89A of that Act). (2) In this Chapter— ... “four month period” means four months beginning with the date on which the Bank receives the business reorganisation plan under paragraph (1)(c); “group institution” means— the UK parent undertaking, if it is an institution; a group subsidiary which is an institution; “impediment”, in relation to the business reorganisation plan, means any material deficiency or measure in the plan which would impede its implementation or the object of restoring the long-term viability of any group entity (or of part of its business) or of the whole or part of the relevant group; “relevant bail-in power” in relation to a group entity means the power in section 12A(2) of the Banking Act 2009; “the regulator”— where there is a PRA-authorised person and any other UK authorised person in the relevant group, means the PRA and the FCA; where there is a PRA-authorised person and no other UK authorised person in the relevant group, means the PRA; where there is no PRA-authorised person in the relevant group, means the FCA; “relevant matters”, in relation to the assessment of the business reorganisation plan, means the following matters for decision— whether the plan meets the criteria for assessment; whether group entities should be required to draw up and submit business reorganisation plans on an individual basis; whether the plan contains an impediment; whether a group entity should be required to revise the plan; whether an impediment has been adequately addressed in a revision of the plan; and where an impediment has not been adequately addressed in a revision of the plan, how it can be adequately addressed by directing a group entity to make specific changes to the plan; and ...

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166 Duty to transmit a copy of business reorganisation plan

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167 Assessment of business reorganisation plan

(1) ... The Bank must assess the business reorganisation plan jointly with the regulator. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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168 Purpose of assessment

(1) The purpose of the assessment of the business reorganisation plan is to determine whether the plan meets the criteria for assessment and decide other relevant matters. (2) The Bank must approve the plan when the Bank and the regulator ... are satisfied that the plan meets the criteria for assessment. (3) The criteria for assessment are that— (a) the plan must include the details specified in section 48H(2) of the Banking Act 2009; (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) the arrangements proposed in the plan would, if implemented, be reasonably likely to restore the long-term viability of the group entities, or parts of the business of the group entities, in respect of which a relevant bail-in power has been exercised and of the whole or part of the relevant group. (d) the arrangements proposed in the plan must be based on realistic assumptions as to the economic and financial market conditions under which the group entities will operate; (e) the plan must take account of the current state of the financial markets and their future prospects, reflecting best-case and worst-case assumptions, including a combination of events allowing the identification of the group entities' main vulnerabilities; and (f) the assumptions made in the plan must be compared with appropriate sector-wide benchmarks.

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169 Assessment of plan where every group entity is set up in the United Kingdom

Where the Bank assesses the business reorganisation plan jointly with the regulator, the assessment must be concluded within the four month period.

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170 Joint assessment of plan

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171 Revision of plan

The Bank— (a) must notify a ... group entity if the business reorganisation plan is found on assessment to contain an impediment; and (b) may not require a ... group entity to revise the plan without giving it an opportunity to state its opinion on that requirement. (2) If the Bank requires a ... group entity to revise the plan, the Bank— (a) must allow two weeks for the preparation of a plan which demonstrates that the impediment has been addressed; (b) within one week beginning with the date on which a revised plan is submitted, must notify the entity whether the impediment has been adequately addressed in the revised plan; and (c) if the impediment has not been adequately addressed in the revised plan, must direct the entity to make specific changes to the plan.

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172 Assessment of business reorganisation plans drawn up on an individual basis

Where the Bank requires a group entity to draw up and submit a business reorganisation plan on an individual basis, Chapter 1 applies for the purpose of the assessment of the plan, but has effect for that purpose as if each reference to an institution were a reference to the group entity.

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173 References to EBA

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174 Requesting the assistance of EBA

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175 Application and interpretation of Chapter 4

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176 Purpose of assessment

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177 Joint assessment of plan

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178 Assessment of business reorganisation plans drawn up on an individual basis

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179 References to EBA

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180 Requesting the assistance of EBA

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181 Interpretation of Part

In this Part— “crisis prevention measure” has the meaning given in section 48Z(1) of the Banking Act 2009; “the regulator”— in relation to an undertaking which is a PRA-authorised person, means the PRA; and in relation to any other undertaking, means the FCA. “supervisory measure” means a power of the FCA or PRA by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to Article 104.1 of the capital requirements directive; “undertaking” 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; in relation to a relevant group, a group entity set up in the United Kingdom; or a mixed activity holding company set up in the United Kingdom.

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182 Matters to be notified by the regulator to the Bank

The regulator must notify the Bank if— (a) an undertaking notifies the regulator that the undertaking is failing or likely to fail (within the meaning given in section 7(5C) of the Banking Act 2009); or (b) the regulator requires an undertaking to take crisis prevention measures or a supervisory measure.

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183 Notification that an undertaking is failing or likely to fail

(1) Where the regulator is satisfied that an undertaking is failing or likely to fail, it must give notice of that fact to the Bank. (2) Where the Bank is satisfied, having regard to timing and other relevant circumstances, that it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the undertaking that will prevent the failure of the undertaking, the Bank must give notice of that fact to the regulator. (3) The Bank must also give notice of that fact— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) to the scheme manager of the Financial Services Compensation Scheme (established under Part 15 of FSMA); (d) to the Treasury ; and (e) to the Financial Policy Committee... (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) This article does not require any information to be disclosed if its disclosure would be contrary to section 348 of FSMA.

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184 Duty to send copy of share transfer instrument etc to members and creditors of institution

(1) This article applies where, in respect of an undertaking— (a) the Bank has applied one or more of the resolution tools; or (b) the Treasury have made a share transfer order for the purpose of taking the undertaking into temporary public ownership. (2) Except where securities issued by the undertaking have been admitted to trading on a regulated market (within the meaning given in section 103(1) of FSMA), the Bank must send a copy of any property transfer instrument, resolution instrument, share transfer instrument, share transfer order or third-country instrument made in respect of the undertaking to the members and creditors of the undertaking who are known to the Bank. (3) In this article— “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); “property transfer instrument” means a property transfer instrument (within the meaning given by section 33 ) made under section 11 (private sector purchaser), section 41A (transfer of property subsequent to resolution instrument), section 42 (supplemental instruments), section 42A (private sector purchaser: reverse property transfer), section 43 (onward transfer), section 44 (resolution company: reverse property transfer) or section 44A (bail-in: reverse property transfer); “resolution instrument” means a resolution instrument made under section 12A (bail-in option), section 48U (supplemental resolution instruments), section 48V (onward transfer) or section 48W (reverse transfer) ; “share transfer instrument” means a share transfer instrument (within the meaning given by section 15) made under section 11, section 26 (supplemental instruments), section 26A (private sector purchaser: reverse share transfer), section 30 (resolution company: share transfers) or section 31 (resolution company: reverse share transfer); “share transfer order” means a share transfer order (within the meaning given by section 16) made by the Treasury under section 13 (temporary public ownership), section 27 (supplemental orders), section 28 (onward transfer) or section 29 (reverse share transfer); and “third-country instrument” has the meaning given in section 89I(4) . (4) In paragraph (3) each reference to a section is a reference to a section of the Banking Act 2009.

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184A Notifications under articles 182, 183 and 184

(1) The PRA and the FCA may each make technical standards specifying the procedures for, and contents of notifications under article 182 or 183(1) in circumstances where it is the regulator. (2) The Bank may make technical standards specifying— (a) the procedures for, and contents of notifications under article 183(2); or (b) the procedures for sending documents under article 184.

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185 Stay of legal proceedings

(1) Where— (a) the Bank has made a mandatory reduction instrument or exercised a stabilisation power in relation to any bank, building society, investment firm or banking group company (“institution under resolution”), (b) the institution under resolution is a party to legal proceedings before any court in the United Kingdom, and (c) the Bank reasonably considers that a stay of those proceedings is necessary for an effective application of the resolution tools or the stabilisation powers, the Bank may apply to that court for a stay of the proceedings. (2) In this article— “bank” has the meaning given by section 2 of the Banking Act 2009 ; “banking group company” has the meaning given in section 81D of the Banking Act 2009 ; “building society” has the meaning given in section 119 of the Building Societies Act 1986; “mandatory reduction instrument” has the meaning given in section 6B(1) of the Banking Act 2009 ; and “stabilisation powers” has the meaning given in section 1(4) of the Banking Act 2009 .

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186 Remedies on judicial review

(1) Where an application is made for judicial review of a decision of the Bank to exercise the stabilisation powers in relation to an institution under resolution (“relevant proceedings”)— (a) a ruling by the court that the decision is unlawful shall not affect— (i) a relevant transfer, (ii) special bail-in provision (within the meaning given by section 48B of the Banking Act 2009), or (iii) provision under section 48L of that Act in relation to securities issued by the institution under resolution, made by a stabilisation instrument made by the Bank pursuant to that decision; and (b) the court may not quash any provision in a stabilisation instrument made by the Bank if that provision makes— (i) a relevant transfer; (ii) special bail-in provision; or (iii) provision under section 48L of the Banking Act 2009 in relation to securities issued by the institution under resolution. (2) For the purposes of paragraph (1)— (a) “stabilisation instrument” means— (i) a share transfer instrument, (ii) a property transfer instrument, (iii) a resolution instrument, or (iv) a third-country instrument, made by the Bank in the exercise of the stabilisation powers provided for in section 1(4) of the Banking Act 2009, and for these purposes “share transfer instrument”, “property transfer instrument”, “resolution instrument” and “third country instrument” have the meaning given in article 184; (b) a transfer is a “relevant transfer” if it transfers to any person— (i) property, rights or liabilities of the institution under resolution or of a relevant resolution company; or (ii) securities issued by the institution under resolution or by a relevant resolution company; (c) for the purposes of sub-paragraph (b)— (i) “resolution company” has the meaning given by section 29A of the Banking Act 2009 ; and (ii) a resolution company is a relevant resolution company if property, rights or liabilities of the institution under resolution have been transferred to it. (3) For the purposes of this article “institution under resolution” has the meaning given in article 185. (4) Paragraph (1) does not affect the power of the court, subject to section 244 of the Banking Act 2009 (immunity), to award damages as a remedy in relevant proceedings.

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216 Interpretation of Part

(1) In this Part— “applying the public equity support tool” means participating in the recapitalisation of an institution or an entity by providing capital to the institution or entity in exchange for Common Equity Tier 1 instruments, Additional Tier 1 instruments or Tier 2 instruments; “Common Equity Tier 1 instruments”, “Additional Tier 1 instruments” and “Tier 2 instruments” have the meanings given in section 3(1) of the Banking Act 2009; “the use of resolution tools, powers and mechanisms” means— the exercise by the Bank or the Treasury of a stabilisation power (within the meaning given in section 1(4) of the Banking Act 2009); the making by the Bank of a mandatory reduction instrument (within the meaning given in section 6B of that Act ); or the exercise by the Treasury of its powers under section 228 of the Banking Act 2009, subject to the requirements of the capital requirements regulation and CRR rules, where the Treasury is applying the public equity support tool; and “UK-registered company” has the meaning given in section 1158 of the Companies Act 2006 (meaning of UK-registered company). (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) For the purposes of this Part a company is a company under resolution if it is a UK-registered company which is subject to the use of resolution tools, powers and mechanisms. (4) But such a company is not a company under resolution if— (a) it has ceased to be subject to the exercise of a stabilisation power or the application of the public equity support tool; and (b) the results which are to be achieved by an instrument made in respect of the company under Part 1 of the Banking Act 2009 have been achieved.

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217 Shadow directorship

(1) A relevant person is not to be treated, in relation to a company under resolution, as— (a) a shadow director for the purposes of the enactments specified in paragraph (3); (b) a person who discharges managerial responsibilities for the purposes of those enactments (unless that person has been appointed as a director); or (c) a director by virtue of paragraph (b) of the definition of “director” given in section 417(1) of FSMA (a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act). (2) “Relevant persons” are— (a) the Bank; ... (b) persons who are employed by, or act on behalf of, the Bank. (c) a resolution administrator appointed under section 62B of the Banking Act 2009; and (d) a temporary manager appointed under section 71C of the Financial Services and Markets Act 2000. (3) The specified enactments are— (a) the Companies Act 2006; (b) the Insolvency Act 1986 ; (c) the Company Directors Disqualification Act 1986 ; and (d) FSMA.

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218 Modified application of legislation on cross-border mergers

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219 Modified application of the Companies Act 2006 (disapplication of Takeover Rules)

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Part 28 of the Companies Act 2006 (Takeovers etc) has effect as if, in section 943 (rules), after subsection (1) there were inserted— (1ZA) Rules made in accordance with paragraph 7(1) and (2) of Part 2 of Schedule 1C must provide that they do not apply in relation to any change in interests in shares or other transaction which is effected by the use of resolution tools, powers and mechanisms (within the meaning given in article 216 of the Bank Recovery and Resolution (No. 2) Order 2014). .

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220 Modified application of the Companies Act 2006 (disapplication of other requirements)

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220A Modified application of the Companies Act 2006 (shareholders’ rights)

(1) The provisions of the Companies Act 2006 concerning the rights of shareholders to call general meetings and to amend the articles of association of the company apply to traded companies to which Part 1 of the Banking Act 2009 applies with the following modifications. (2) “Traded company” has the meaning given in section 360C of the Companies Act 2006. (3) Section 21 (amendment of articles) has effect as if, after subsection (3) there were inserted— (4) A traded company (within the meaning of section 360C) to which Part 1 of the Banking Act 2009 applies may also amend its articles in accordance with section 307B. (4) Section 307A (notice required of general meeting: certain meetings of traded companies), has effect as if, at the beginning of subsection (1), there were inserted “Subject to section 307B,”. (5) Part 13 (resolutions and meetings) has effect as if after section 307A there were inserted— Notice required of general meeting: traded companies meeting the conditions for early intervention 307B. (1) Where the conditions in subsections (2) and (3) are satisfied, the members of a traded company to which Part 1 of the Banking Act 2009 applies may, by a resolution passed at a general meeting by a majority of two-thirds of those voting in person or by proxy— (a) require the company to call a general meeting to pass a resolution to increase the company’s share capital, provided that the meeting is to be called by notice of at least 10 days; (b) amend the company’s articles of association to permit a general meeting to be called to consider a proposal to increase the company’s share capital by notice of at least 10 days. (2) The condition in this subsection is satisfied if— (a) the company has infringed, or is likely in the near future to infringe— (i) a relevant requirement within the meaning of section 204A of the Financial Services and Markets Act 2000; or (ii) a requirement imposed by or under Articles 3 to 7, 14 to 17 or 24 to 26 of Regulation (EU) No 600/2014 of 15th May 2014 of the European Parliament and of the Council on Markets in Financial Instruments; or (b) the conditions for appointment of a temporary manager under section 71C(1) of the Financial Services and Markets Act 2000 (temporary manager) are met in relation to the company. (3) The condition in this subsection is satisfied if an increase in the share capital of the company is necessary to prevent the conditions in section 7 of the Banking Act 2009 for the exercise of the stabilisation powers provided for in Part 1 of that Act being met in relation to the company.

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221 Investment firms to be treated as financial institutions

An investment firm within the meaning given in section 258A of the Banking Act 2009 (“investment firm”) is to be treated as a financial institution for the purposes of section 228 (Consolidated Fund) and 229 (National Loans Fund) of that Act.

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222 Continuity

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223 Duty to co-operate

(1) The Bank, the PRA and the FCA must ensure that all persons who are responsible for performing relevant functions under authority delegated by the Bank, PRA or FCA co-operate closely with one another in the course of performing those functions. (2) “Relevant functions” means any functions conferred on the Bank, the PRA or the FCA by or under— (a) Part 1 of the Banking Act 2009; (b) section 17 of the Financial Services (Banking Reform) Act 2013; (c) any Regulations adopted under the recovery and resolution directive; (d) this Order.

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224 Non-binding co-operation arrangements in line with EBA framework arrangements

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225 Duty to inform EBA of imposition of penalties

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226 Amendments of primary and secondary legislation

Schedule 3, which contains amendments of primary and secondary legislation, has effect.

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