(1) The Bank must review a resolution plan and make any appropriate amendment at least— (a) once a year; or (b) if the Bank has made a determination under article 8(5), at the intervals determined. (2) The Bank must— (a) review a resolution plan where— (i) any material change has been made to the legal or organisational structure of the relevant entity or to its business or financial position; or (ii) a change results from the application of the resolution tools or the exercise of the powers under section 6B of the Banking Act 2009 in relation to the relevant entity. (b) make appropriate amendments if such a change could have a material impact on the effectiveness of the plan or necessitate amendment for any other reason. (3) For the purposes of a review of a resolution plan the Bank may make a determination under article 8(3). (4) The Bank must review a resolution plan and adopt the up-dated plan— (a) in the case of 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 accordance with Chapter 1; ... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) For the purposes of this article Part 3 and Chapter 1 have effect with the modifications specified in the table— Article | Modification Article 8 | In paragraph (3) the reference to a resolution plan is a reference to the up-dated plan. Article 37 | Ignore paragraph (1). In paragraph (2)— the reference to a resolution plan is a reference to the up-dated plan; and for “be drawn up” read “the review must be undertaken”. In paragraph (3) for “drawn up” read “reviewed”. In paragraph (4) for “drawing up” read “reviewing”. In paragraph (5) the reference to the resolution plan is a reference to the up-dated plan. Article 38 | The reference to the resolution plan is a reference to the up-dated plan. (6) In this article— “relevant entity” means an institution or group entity for which the Bank has adopted a resolution plan; “resolution plan” means a plan adopted by the Bank under Chapter 1...; and “up-dated plan”, in relation to a resolution plan, means that plan as reviewed in accordance with this article (whether or not it has been amended on review).

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54 Review of group resolution plan drawn up by the Bank

(1) The Bank must review a group resolution plan at least— (a) once a year; or (b) if the Bank has made a determination under article 8(5), at the intervals determined. (2) The Bank must— (a) review a group resolution plan where any material change has been made to the legal or organisational structure of the relevant group or any group entity or to its business or financial position; and (b) make appropriate amendments if such a change could have a material impact on the effectiveness of the plan or necessitate amendment for any other reason. (3) For the purposes of a review of a group resolution plan the Bank may make a determination under article 8(3). (4) The Bank must review a group resolution plan and adopt the up-dated plan in accordance with Chapter 2. (5) For the purposes of this article Part 3 and Chapter 2 have effect with the modifications specified in the table— Article | Modification Article 8 | In paragraph (3) the reference to a group resolution plan is a reference to the up-dated plan. Article 40 | In paragraphs (1) and (2) for “draw up and adopt a” read “review the”. In paragraph (3)— the reference to a group resolution plan is a reference to the up-dated plan; and for “be drawn up” read “the review must be undertaken”. In paragraph (4) for “drawn up” read “reviewed”. In paragraphs (5) and (7) for “drawing up a” read “reviewing the”. Article 41 | ... Article 45 | The reference to a group resolution plan is a reference to the up-dated plan. (6) In this article— “group resolution plan” means a plan adopted by the Bank under Chapter 2; and “up-dated plan”, in relation to a group resolution plan, means that plan as reviewed in accordance with this article (whether or not it has been amended on review).

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55 Review of group resolution plan drawn up by another resolution authority

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56 Information required for resolution planning

(1) The regulator must provide the Bank with all information contained in a resolution pack prepared by a relevant person in accordance with rules made by the regulator under FSMA. (2) This article does not require any information to be disclosed if its disclosure would be contrary to section 348 of FSMA. (3) In this article— “regulator” has the meaning given in section 3A(2) of FSMA ; “relevant person” has the meaning given in subsection (2) of section 137K of FSMA (rules about resolution packs: duty to consult); and “resolution pack” has the meaning given in subsection (3) of that section.

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57 Notice of matters which could necessitate an amendment of a plan

The PRA and the FCA must notify the Bank without delay of any change of circumstances or other matter coming to their attention which could necessitate an amendment of a resolution plan or group resolution plan.

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58 Records of financial contracts

(1) The Bank may give directions to a relevant person in relation to maintaining detailed records of financial contracts to which the relevant person is a party. (2) A “relevant person” is— (a) an institution authorised by the PRA or FCA; or (b) an undertaking set up in the United Kingdom which is a subsidiary of an institution authorised by the PRA or FCA ...; or (c) the UK parent undertaking. (2A) “Financial contracts” means— (a) securities contracts, including— (i) contracts for the purchase, sale or loan of a security, a group or index of securities; (ii) options on a security or group or index of securities; (iii) repurchase or reverse repurchase transactions on any such security, group or index; (b) commodities contracts, including— (i) contracts for the purchase, sale or loan of a commodity or group or index of commodities for future delivery; (ii) options on a commodity or group or index of commodities; (iii) repurchase or reverse repurchase transactions on any such commodity, group or index; (c) futures and forwards contracts, including contracts (other than a commodities contract) for the purchase, sale or transfer of a commodity or property of any other description, service, right or interest for a specified price at a future date; (d) swap agreements, including— (i) swaps and options relating to interest rates, spot or other foreign exchange agreements, currency, an equity index or equity, a debt index or debt, commodity indexes or commodities, weather, emissions or inflation; (ii) total return, credit spread or credit swaps; (iii) any agreements or transactions that are similar to an agreement referred to in paragraph (i) or (ii) which is the subject of recurrent dealing in the swaps or derivatives markets; (e) inter-bank borrowing agreements where the term of the borrowing is three months or less; (f) master agreements for any of the contracts or agreements referred to in sub-paragraphs (a) to (e). (3) A direction given by the Bank may— (a) require records of financial contracts to be maintained; (b) specify the details or kinds of detail which are to be recorded; (c) require records of financial contracts to be produced at the request of the Bank; (d) specify a period of time within which a relevant person is to be capable of producing records (“a time-limit”); (e) specify different time-limits for different kinds of financial contract. (4) The Bank must exercise its functions under this article in accordance with any technical standards under paragraph (5). (5) The Bank may make technical standards relating to— (a) the circumstances in which it will give a direction under this paragraph; and (b) the information that must be contained in the records required by such a direction. (4) Directions may be given with general effect or with respect to a particular relevant person or class of relevant persons, but may not specify different time-limits for different relevant persons or classes of relevant person.

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59 Application and interpretation of Chapter 1

(1) This Chapter applies where the Bank draws up a resolution plan for an institution in accordance with Chapter 1 of Part 5, or reviews a resolution plan drawn up in accordance with that Chapter. (2) In this Chapter “assessment of resolvability” means an assessment of the extent to which it would be feasible and credible to apply the resolution tools, exercise resolution powers or take insolvency proceedings in respect of the institution while avoiding to the maximum extent possible any significant adverse effect on the financial system of the United Kingdom or the continuity of the institution's critical functions.

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60 Assessment of resolvability

(1) For the purpose of drawing up or reviewing the resolution plan the Bank must make an assessment of resolvability. (2) For the purpose of making the assessment of resolvability the Bank must— (a) consider all relevant matters, including the matters set out in Schedule 2B and in any technical standards under paragraph (2A); (b) have regard to the circumstances under which the institution may fail or be likely to fail, in particular— (i) supposing that there is a situation of widespread financial instability or an occurrence of events which pose systemic risk; and (ii) supposing that there is no such a situation or occurrence; (c) not assume that the institution will be in receipt of— (i) extraordinary public financial support; (ii) emergency liquidity assistance ; or (iii) any other liquidity assistance provided by the Bank under non-standard collateralisation, tenor and interest rate terms; and (d) consult— (i) the appropriate regulator... (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2A) The Bank may make technical standards providing— (a) further examples of relevant matters to be considered; and (b) criteria to be examined, for the purposes of making the assessment of resolvability. (3) Paragraph (2) has effect subject to the imposition of any simplified obligations (within the meaning given by article 9(3)(b)) with respect to the assessment of resolvability. (4) The institution is deemed to be resolvable if the Bank concludes that it would be feasible and credible to apply the resolution tools, exercise resolution powers or take insolvency proceedings in respect of the institution while avoiding to the maximum extent possible any significant adverse effect on the financial system of the United Kingdom or the continuity of the institution's critical functions. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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61 Application and interpretation of Chapter 2

(1) This Chapter applies where the Bank— (a) ... draws up a group resolution plan in accordance with Chapter 2 of Part 5 or reviews a plan drawn up in accordance with that Chapter... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) In this Chapter “assessment of group resolvability” means an assessment of the extent to which it would be feasible and credible to apply the resolution tools or exercise resolution powers in respect of resolution entities, or take insolvency proceedings in respect of group entities while avoiding to the maximum extent possible any significant adverse effect on the financial system of the United Kingdom or the continuity of the critical functions of group entities.

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62 Assessment of group resolvability where the PRA or FCA is the consolidating supervisor

(1) This article applies in relation to a relevant group in respect of which the PRA or FCA is the consolidating supervisor. (2) For the purpose of drawing up or reviewing a group resolution plan the Bank must make an assessment of group resolvability in respect of the relevant group and, where there is more than one resolution group in the relevant group, in respect of each resolution group. (3) For the purpose of making the assessment of group resolvability the Bank must— (a) consider all relevant matters, including the matters set out in Schedule 2B and in any technical standards under paragraph (2A); (b) have regard to the circumstances under which resolution entities may meet the conditions for resolution, in particular— (i) supposing that there is a situation of widespread financial instability or an occurrence of events which pose systemic risk; and (ii) supposing that there is no such a situation or occurrence; (c) not assume that any of the group entities will be in receipt of— (i) extraordinary public financial support; (ii) emergency liquidity assistance; or (iii) any other liquidity assistance provided by the Bank under non-standard collateralisation, tenor and interest rate terms; and (d) consult— (i) the appropriate regulator; (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3A) The Bank may make technical standards providing— (a) further examples of relevant matters to be considered; and (b) criteria to be examined, for the purposes of making the assessment of group resolvability. (4) Paragraph (3) has effect subject to the imposition of any simplified obligations (within the meaning given by article 9(3)(b)) with respect to the assessment of group resolvability. (5) The relevant group or a resolution group is deemed to be resolvable if the Bank concludes that it would be feasible and credible to apply the resolution tools or exercise resolution powers in respect of resolution entities, or take insolvency proceedings in respect of group entities while avoiding to the maximum extent possible any significant adverse effect on the financial system of the United Kingdom or the continuity of the critical functions of group entities. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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63 Assessment of group resolvability where neither the PRA nor the FCA is the consolidating supervisor

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64 Application and interpretation of Chapter 3

(1) This Chapter applies where the Bank, after consulting the appropriate regulator and having made an assessment of resolvability in accordance with Chapter 1, determines that there are substantive impediments to the resolvability of an institution (“the impediments”). (2) In this Chapter— “determination” means a determination of a kind referred to in paragraph (1); “pre-resolution powers” means the powers conferred on the Bank by section 3A of the Banking Act 2009 (removal of impediments to the exercise of stabilisation powers etc); and “relevant proposals” means proposals which— are prepared by an institution to which notice is given under article 65; are for taking measures to address or remove the impediments including a timetable for doing so; and are required to be submitted by the institution within the response period. “response period” means— in a case where the institution does not... meet ... the minimum requirement for own funds and eligible liabilities in accordance with section 3A(4B) of the Banking Act, two weeks beginning with the date on which the institution received the notice; and in any other case, four months beginning with that date.

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65 Notice of determination

(1) The Bank must give notice of a determination to— (a) the institution concerned; and (b) the appropriate regulator... (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) The notice must— (a) be in writing; (b) set out the impediments; and (c) give reasons for the determination.

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66 Effect of notice of determination

(1) A notice under article 65 has the effect of suspending the Bank's duty to draw up a resolution plan for the institution (or review the resolution plan adopted for the institution) until the Bank has approved relevant proposals or exercised pre-resolution powers. (2) The Bank, after consulting the appropriate regulator, must assess whether the measures set out in relevant proposals would adequately address or effectively remove the impediments. (3) Where the institution— (a) fails to submit relevant proposals within the response period, or (b) the Bank concludes that the measures set out in relevant proposals would not adequately address or effectively remove the impediments, the Bank must exercise pre-resolution powers with the object of requiring the institution to take specified measures to address or remove the impediments (“remedial measures”). (4) In a direction given by the Bank for that purpose the Bank must— (a) demonstrate how the measures set out in relevant proposals would not adequately address or effectively remove the impediments; (b) demonstrate how the remedial measures will adequately address or effectively remove the impediments in a manner proportionate to the burden or restriction imposed by the direction; and (c) require the institution to— (i) prepare a plan showing how it will comply with the remedial measures; and (ii) submit that plan within one month beginning on the date of the direction. (5) Where the consent of the appropriate regulator is not required under section 3A(5) of the Banking Act 2009, the Bank must consult the appropriate regulator and, where appropriate, the Financial Policy Committee before determining remedial measures. (6) For the purpose of assessing relevant proposals and determining remedial measures the Bank must take account of— (a) the threat to financial stability posed by the impediments; and (b) the effect of the remedial measures on— (i) the business and financial stability of the institution and its ability to contribute to the economy of the United Kingdom ...; (ii) the market in the United Kingdom for financial services; (iii) the financial stability of the United Kingdom. (7) The Bank must give the institution written notice of the remedial measures, including a reasoned account of its decision to require the institution to take those measures.

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67 Right of appeal

(1) A person who is aggrieved by— (a) a determination, (b) the Bank's conclusion that the measures set out in relevant proposals would not adequately address or effectively remove the impediments, or (c) the exercise of pre-resolution powers, may refer the matter to the Tribunal (within the meaning given in section 417(1) of FSMA ). (2) Part 9 of FSMA (hearings and appeals) has effect in relation to a reference to the Tribunal under paragraph (1) as if it were a reference of a decision of the Bank under FSMA.

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68 Application and interpretation of Chapter 4

(1) This Chapter applies where, in relation to a relevant group— (a) the PRA or FCA is the consolidating supervisor; and (b) the Bank, having made an assessment of group resolvability in accordance with Chapter 2, has identified substantive impediments to the resolvability of a group entity (“the impediments”). (2) In this Chapter— “group entity” means the UK parent undertaking or a subsidiary within the relevant group which is— an institution a financial institution; or a parent undertaking of an institution which is ...— ... a qualifying parent undertaking; “measures for structural change” means— measures for changing the legal or operational structure of a group entity in order to ensure, through the application of resolution tools and the exercise of resolution powers, that critical functions can be separated, legally or operationally, from the performance of other functions; measures for establishing a UK parent financial holding company; or where an institution is a subsidiary of a relevant MAHC, measures for establishing a financial holding company as a parent undertaking of the institution for the purpose of— facilitating the application of resolution tools and the exercise of resolution powers to achieve any of the resolution objectives; or ensuring that applying the resolution tools and exercising the resolution powers does not have an adverse effect on the non-financial part of the group of the relevant MAHC; “the plan” means the group resolution plan being drawn up for the relevant group (or the group resolution plan which has been adopted for the group and is being reviewed); “pre-resolution powers” has the same meaning as in Chapter 3; “qualifying parent undertaking” has the meaning given by section 192B of FSMA (meaning of “qualifying parent undertaking”); and “remedial measures” means measures to address or remove the impediments. “response period” means— in a case where the institution does not, as applicable, meet the requirements referred to in Articles 92a and 494 of the capital requirements regulation or the minimum requirement for own funds and eligible liabilities in accordance with section 3A(4B) of the Banking Act, two weeks beginning with the date on which the institution received the notice; and in any other case, four months beginning with that date. (3) “Relevant MAHC”, in the definition of “measures for structural change”, means a mixed activity holding company which has at least one subsidiary which— (a) is an institution; and (b) is not a subsidiary of a financial holding company which is also a subsidiary of the mixed activity holding company.

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69 Report on substantive impediments to the resolvability of group entities

(1) The Bank, in co-operation with ... the appropriate regulator ..., must prepare a report which— (a) contains an analysis of the impediments; (b) proposes remedial measures for the impediments; and (c) examines the impact of the remedial measures on the business of the group entities. (2) The Bank must submit its report to the UK parent undertaking and the appropriate regulator.

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70 Suspension of requirement to draw up or review group resolution plan

(1) ... The submission of the Bank's report under article 69 has the effect of suspending the Bank's duty to draw up or review the plan until the Bank determines remedial measures under article 71(3)(c). (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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71 Determining remedial measures

(1) The UK parent undertaking may, within the response period beginning with the date on which it receives the Bank's report, submit to the Bank its observations on the report and a proposal to take alternative remedial measures (“alternative proposal”). (2) The Bank must send such observations and any alternative proposal to the appropriate regulator. (3) ... The Bank must— (a) confirm the impediments with or without modification; (b) assess any alternative proposal; and (c) determine remedial measures in the exercise of pre-resolution powers— (i) where the Bank concludes that the measures set out in an alternative proposal would adequately address or effectively remove the impediments, by approving that proposal (with or without modification); (ii) otherwise, by specifying the measures which are to be taken. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) The Bank must consult the appropriate regulator and, where appropriate, the Financial Policy Committee before determining remedial measures under paragraph (3)(c). (6) In considering any matter referred to in paragraph (3) or (4) the Bank must take account of— (a) the threat to financial stability posed by the impediments; and (b) the effect of the measures on— (i) the business and financial stability of each group entity and its ability to contribute to the economy of the United Kingdom ... (ii) the market in the United Kingdom for financial services; (iii) the financial stability of the United Kingdom. (7) Paragraphs (8) and (9) apply where remedial measures determined under paragraph (3) ... are to be implemented by a group entity set up in the United Kingdom. (8) The Bank must exercise pre-resolution powers with the object of requiring the entity to take the remedial measures. (9) In a direction given for that purpose, the Bank— (a) if it has specified the measures which are to be taken, must demonstrate how the measures set out in an alternative proposal would not adequately address or effectively remove the impediments; (b) must demonstrate how the remedial measures will adequately address or effectively remove the impediments in a manner proportionate to the burden or restriction imposed by the direction; and (c) must require the entity to— (i) prepare a plan showing how it will comply with the remedial measures; and (ii) submit that plan within one month beginning on the date of the direction.

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