(1) This section applies to—
(a) compensation scheme orders,
(b) resolution fund orders,
(c) third party compensation orders, ...
(ca) bail-in compensation orders,
(d) regulations under section 60, and
(e) regulations under section 60A.
(2) An order or regulations may provide for compensation or other payments to be made by—
(a) the Treasury,
(b) the Financial Services Compensation Scheme, subject to section 214C of the Financial Services and Markets Act 2000 (limit on amount of special resolution regime payments), or
(c) any other specified person.
(1) This section applies to—
(a) compensation scheme orders,
(b) resolution fund orders, ...
(ba) bail-in compensation orders, and
(c) third party compensation orders.
(2) An order—
(a) shall be made by statutory instrument, and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(1) The Bank of England must make arrangements for the appointment of a person to act as independent valuer for the purposes of a valuation to be conducted under section 6E or 48X.
(1A) The Bank may require the bank to which the valuation relates to reimburse the Bank for costs it incurs in relation to the independent valuer (including remuneration and allowances paid to the valuer and the valuer's staff).
(2) A person may not be appointed as independent valuer under subsection (1) unless that person—
(a) qualifies as “independent” in accordance with regulatory technical standards ..., or
(b) if no such regulatory technical standards exist, satisfies the independence requirement set out in section 1151 of the Companies Act 2006.
(2A) In subsection (2) “regulatory technical standards” means—
(a) any Commission Regulation containing regulatory technical standards adopted by the European Commission under article 36.16 of the recovery and resolution directive, so far as they are assimilated law, or
(b) technical standards made under subsection (2B).
(2B) The Bank of England may make technical standards specifying the circumstances in which for the purposes of this section a person is to be considered independent from the Bank of England and the bank to which the valuation relates.
(3) An independent valuer is to hold and vacate office in accordance with the terms of his or her appointment.
(4) An independent valuer may be removed from office only on the grounds of incapacity or serious misconduct.
(5) In the event of the death of an independent valuer, or an independent valuer being removed from office or resigning, a new independent valuer must be appointed by the Bank in accordance with this section.
(6) Section 55(1) to (5) and (7) to (10) ... apply in relation to an independent valuer appointed in accordance with this section as they apply to an independent valuer appointed by virtue of section 54.
(1) The Bank of England may appoint an individual or body corporate as a resolution administrator.
(2) The power under subsection (1) may be exercised—
(a) by a separate instrument of appointment under this section, or
(b) by way of provision in a mandatory reduction instrument, a share transfer instrument, a property transfer instrument or a resolution instrument.
(3) In this section and sections 62C to 62E—
“appointment instrument” means an instrument under subsection (2)(a);
“Part 1 instrument” means an instrument of a kind mentioned in subsection (2)(b).
(4) A resolution administrator is appointed—
(a) to hold any securities that may be transferred or issued to that person in the capacity of resolution administrator, and
(b) to perform any other functions that may be conferred under any provision of this Part.
(5) The Bank of England may appoint more than one resolution administrator to perform functions in relation to a bank (but no more than one of them may at any one time be authorised to hold securities as mentioned in subsection (4)(a)).
(6) Securities held by a resolution administrator (in that capacity, and whether as a result of a Part 1 instrument or otherwise) are to be held in accordance with the terms of a Part 1 instrument that transfers those, or other, securities to the resolution administrator.
(7) For example, the following provision may be made by virtue of subsection (6)—
(a) provision that specified rights of a resolution administrator with respect to all or any of the securities are to be exercisable only as directed by the Bank of England;
(b) provision specifying rights or obligations that the resolution administrator is, or is not, to have in relation to some or all of the securities.
(8) A resolution administrator must—
(a) in accordance with the Part 1 instrument or the appointment instrument, take all measures necessary to promote the special resolution objectives, and
(b) have regard, in performing any functions of the office, to any other objectives that may be specified in a Part 1 instrument or the appointment instrument.
(9) Where one or more objectives are specified in accordance with subsection (8), the objectives are to be taken to have equal status with each other, unless the contrary is stated in the Part 1 instrument or the appointment instrument.
(10) The following provisions apply in relation to an appointment instrument as they apply in relation to a resolution instrument—
(a) section 48S(2) and (3) (power to make incidental, consequential provision etc);
(b) section 48T (procedure).
(1) An appointment instrument or a Part 1 instrument may—
(a) authorise a resolution administrator to manage the bank’s business (or confer on a resolution administrator any other power with respect to the management of the bank’s business);
(b) authorise a resolution administrator to exercise any other powers of the bank;
(c) confer on a resolution administrator any other power the Bank of England may consider appropriate;
(d) provide that the exercise of any power conferred by the instrument in accordance with this section is to be subject to conditions specified in the instrument.
(2) An appointment instrument or a Part 1 instrument may require a resolution administrator to make reports to the Bank of England—
(a) on any matter specified in the instrument, and
(b) at the times or intervals specified in the instrument.
(3) If an instrument specifies a matter in accordance with subsection (2)(a), it may provide for further requirements as to the contents of the report on that matter to be specified in an agreement between the Bank of England and the resolution administrator.
(4) An appointment instrument or a Part 1 instrument may—
(a) require a resolution administrator to consult specified persons before exercising specified functions (and may specify particular matters on which the specified person must be consulted);
(b) provide that a resolution administrator is not to exercise specified functions without the consent of a specified person.
(1) A resolution administrator may do anything necessary or desirable for the purposes of or in connection with the performance of the functions of the office.
(2) A resolution administrator is not a servant or agent of the Crown (and, in particular, is not a civil servant).
(3) Where a resolution administrator is appointed under this Part, the Bank of England—
(a) must make provision in the appointment instrument or a Part 1 instrument for the resignation and replacement of the resolution administrator;
(b) may remove the resolution administrator from office only (i) on the ground of incapacity or misconduct, or (ii) on the ground that there is no further need for a person to perform the functions conferred on the resolution administrator.
(1) An appointment instrument or a Part 1 instrument may provide for the payment of remuneration and allowances to a resolution administrator.
(2) Provision made under subsection (1) may provide that the amounts are—
(a) to be paid by the Bank of England, or
(b) to be determined by the Bank of England and paid by the bank.
(3) A resolution administrator is not liable for damages in respect of anything done in good faith for the purposes of or in connection with the functions of the office (subject to section 8 of the Human Rights Act 1998).
63 General continuity obligation: property transfers
(1) In this section and section 64—
(a) “residual bank” means a bank all or part of whose business has been transferred in accordance with section 11(2)(b), 12(2) , 12ZA(3) , 41A(2) or 44D(2) ,
(b) “group company” means anything which is, or was immediately before the transfer, a group undertaking in relation to a residual bank,
(c) “group undertaking” has the meaning given by section 1161(5) of the Companies Act 2006 (interpretation),
(d) “the transferred business” means the part of the bank's business that has been transferred, and
(e) “transferee” means a commercial purchaser or resolution company to whom all or part of the transferred business has been transferred.
(1A) In this section a reference to insolvency includes a reference to (i) liquidation, (ii) bank insolvency, (iii) administration, (iv) bank administration, (v) receivership, (vi) composition with creditors and (vii) a scheme of arrangement.
(2) The residual bank and each group company must provide such services and facilities as are required to enable a transferee to operate the transferred business, or part of it, effectively.
(3) The duty under subsection (2) (the “continuity obligation”) may be enforced as if created by contract between the residual bank or group company and the transferee.
(3A) The continuity obligation continues to apply despite the residual bank or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.
(4) The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration.
(4A) But if the services and facilities provided in pursuance of the continuity obligation were provided to the bank whose business has been transferred, under an agreement with that bank, before the property transfer instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and subsection (4) does not apply).
(5) The continuity obligation is not limited to the provision of services or facilities directly to a transferee.
(6) The Bank of England may, with the consent of the Treasury, by notice to the residual bank or a group company state that in the Bank's opinion—
(a) specified activities are required to be undertaken in accordance with the continuity obligation;
(b) activities are required be undertaken in accordance with the continuity obligation on specified terms.
(7) A notice under subsection (6) shall be determinative of the nature and extent of the continuity obligation as from the time when the notice is given.
64 Special continuity obligations: property transfers
(1) Expressions in this section have the same meaning as in section 63.
(2) The Bank of England may—
(a) cancel a contract or other arrangement between the residual bank and a third party (whether or not rights or obligations under it have been transferred to a transferee);
(b) modify the terms of a contract or other arrangement between the residual bank and a third party (whether or not rights or obligations under it have been transferred to a transferee);
(c) add or substitute a transferee as a party to a contract or other arrangement between the residual bank and a third party;
(d) confer and impose rights and obligations on a group company and a transferee, which shall have effect as if created by contract between them;
(e) confer and impose rights and obligations on the residual bank and a transferee which shall have effect as if created by contract between them.
(3) In modifying or setting terms under subsection (2) the Bank of England shall aim, so far as is reasonably practicable, to preserve or include—
(a) provision for reasonable consideration, and
(b) any other provision that would be expected in arrangements concluded between parties dealing at arm's length.
(4) The power under subsection (2) must be exercised by way of provision in a property transfer instrument (or supplemental instrument).
(5) The power in subsection (2)(d) and (e) may be exercised only—
(a) in so far as the Bank of England thinks it necessary to do so to ensure the provision of such services and facilities as are required to enable the transferee to operate the transferred business, or part of it, effectively, and
(b) with the consent of the Treasury.
(6) An obligation imposed on the residual bank or a group company under subsection (2)(d) or (e) continues to apply despite the residual bank or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.
(7) For the purposes of subsection (2), “third party” includes a group company.
(1) In this section—
(a) “onward transfer” means a transfer of property, rights or liabilities (whether or not under a power in this Part) from—
(i) a person who is a transferee under a property transfer instrument under section 12(2) or 12ZA(3) (an “original transferee”), or
(ii) a bank, securities issued by which were earlier transferred by a share transfer instrument under section 12(2) or a share transfer order under section 13(2), and
(b) the person to whom the onward transfer is made is referred to as an “onward transferee”.
(2) The continuity authority may—
(a) provide for an obligation under section 63 to apply in respect of an onward transferee;
(b) extend section 64 so as to permit action to be taken under section 64(2) for the purpose of enabling an onward transferee to operate transferred business, or part of it, effectively.
(3) “The continuity authority” means—
(a) the Bank of England, where subsection (1)(a)(i) applies, and
(b) the Treasury, where subsection (1)(a)(ii) applies.
(4) Subsection (2) may be relied on to impose obligations on—
(a) an original transferee (where the original transfer was a property transfer),
(b) a residual bank within the meaning of section 63 (where the original transfer was a property transfer),
(c) the bank (where the original transfer was a share transfer),
(d) anything which is or was a group undertaking (within the meaning of section 1161(5) of the Companies Act 2006) of anything within paragraphs (a) to (c), or
(e) any combination.
(5) Subsection (2) may be used to impose obligations—
(a) in addition to obligations under or by virtue of section 63 or 64, or
(b) replacing obligations under or by virtue of either of those sections to a specified extent.
(6) A power under subsection (2) is exerciseable by giving a notice to each person—
(a) on whom a continuity obligation is to be imposed under the power, or
(b) who is expected to benefit from a continuity obligation under the power.
(7) Sections 63(3) to (7) and 64(3) and (4) apply to an obligation as applied under subsection (2)—
(a) construing “transferred business” as the business transferred by means of the onward transfer, and
(b) with any other necessary modification.
(8) The Bank of England may act under or by virtue of subsection (2) only with the consent of the Treasury.
(1) In this section and section 67—
(a) “transferred bank” means a bank all or part of the ownership of which has been transferred in accordance with section 11(2)(a), 12(2)(a) or 13(2), or which falls within subsection (1A),
(b) “former group company” means anything which was a group undertaking in relation to the transferred bank immediately before the transfer (whether or not it is also a group undertaking in relation to the transferred bank immediately after the transfer),
(c) “group undertaking” has the meaning given by section 1161(5) of the Companies Act 2006 (interpretation), and
(d) “the continuity authority” means—
(i) the Bank of England, where ownership was transferred in accordance with section 11(2)(a), 12(2)(a), or in a case falling within subsection (1A), and
(ii) the Treasury, where ownership was transferred in accordance with section 13(2).
(1ZA) In this section a reference to insolvency includes a reference to (i) liquidation, (ii) bank insolvency, (iii) administration, (iv) bank administration, (v) receivership, (vi) composition with creditors and (vii) a scheme of arrangement.
(1A) A bank falls within this subsection if a mandatory reduction instrument or resolution instrument (or supplemental resolution instrument) has changed the ownership of the bank (wholly or partly) by providing for the transfer, cancellation or conversion from one form or class to another of securities issued by the bank (and the reference in subsection (1)(b) to “the transfer” includes such a cancellation or conversion).
(2) Each former group company must provide such services and facilities as are required to enable the transferred bank to operate effectively.
(3) The duty under subsection (2) (the “continuity obligation”) may be enforced as if created by contract between the transferred bank and the former group company.
(3A) The continuity obligation continues to apply despite the former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.
(4) The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration.
(4A) But if the services and facilities provided in pursuance of the continuity obligation were provided to the transferred bank, under an agreement with that bank, before the share transfer instrument or order or the resolution instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and subsection (4) does not apply).
(5) The continuity obligation is not limited to the provision of services or facilities directly to the transferred bank.
(6) The continuity authority may by notice to a former group company state that in the authority's opinion—
(a) specified activities are required to be undertaken in accordance with the continuity obligation;
(b) activities are required be undertaken in accordance with the continuity obligation on specified terms.
(7) A notice under subsection (6) shall be determinative of the nature and extent of the continuity obligation as from the time when the notice is given.
(8) The Bank of England may act under or by virtue of subsection (6) only with the consent of the Treasury.
67 Special continuity obligations: share transfers
(1) Expressions in this section have the same meaning as in section 66.
(2) The continuity authority may—
(a) cancel a contract or other arrangement between the transferred bank and a third party;
(b) modify the terms of a contract or other arrangement between the transferred bank and a third party;
(c) confer and impose rights and obligations on a former group company and the transferred bank, which shall have effect as if created by contract between them.
(3) In modifying or setting terms under subsection (2) the continuity authority shall aim, so far as is reasonably practicable, to preserve or include—
(a) provision for reasonable consideration, and
(b) any other provision that would be expected in arrangements concluded between parties dealing at arm's length.
(4) The power under subsection (2) must be exercised by way of provision in a share transfer instrument or order or resolution instrument (or supplemental instrument or order).
(5) The power in subsection (2)(c) may be exercised—
(a) only in so far as the continuity authority thinks it necessary to do so to ensure the provision of such services and facilities as are required to enable the transferred bank to operate effectively, and
(b) by the Bank of England only with the consent of the Treasury.
(6) An obligation imposed on the transferred bank or a former group company under subsection (2)(b) or (c) continues to apply despite the transferred bank or former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.
(1) In this section “onward transfer” means a transfer (whether or not under a power in this Part) of securities issued by a bank where—
(a) securities issued by the bank were earlier transferred by a share transfer instrument under section 12(2), a resolution instrument under section 12A(2) or supplemental resolution instrument under section 48U(2) or a share transfer order under section 13(2), or
(b) the bank was the transferee under a property transfer instrument under section 12(2).
(2) The continuity authority may—
(a) provide for an obligation under section 66 to apply in respect of the bank after the onward transfer;
(b) extend section 67 so as to permit action to be taken under section 67(2) to enable the bank to operate effectively after the onward transfer.
(3) In this section “continuity authority” has the same meaning as in sections 66 and 67.
(4) Subsection (2) may be relied on to impose obligations on—
(a) the bank,
(b) anything which is or was a group undertaking (within the meaning of section 1161(5) of the Companies Act 2006) of the bank,
(c) anything which is or was a group undertaking of the residual bank (in a case to which subsection (1)(b) applies), or
(d) any combination.
(5) Subsection (2) may be used to impose obligations—
(a) in addition to obligations under or by virtue of section 66 or 67, or
(b) replacing obligations under or by virtue of either of those sections to a specified extent.
(6) A power under subsection (2) is exerciseable by giving a notice to each person—
(a) on whom a continuity obligation is to be imposed under the power, or
(b) who is expected to benefit from a continuity obligation under the power.
(7) Sections 66(3) to (7) and 67(3) and (4) apply to an obligation as applied under subsection (2) with any necessary modification.
(8) The Bank of England may act under or by virtue of subsection (2) only with the consent of the Treasury.
69 Continuity obligations: consideration and terms
(1) The Treasury may by order specify matters which are to be or not to be considered in determining—
(a) what amounts to reasonable consideration for the purpose of sections 63 to 68;
(b) what provisions to include in accordance with section 64(3)(b) or 67(3)(b).
(2) An order—
(a) shall be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(3) A continuity authority may give guarantees or indemnities in respect of consideration for services or facilities provided or to be provided in pursuance of a continuity obligation.
(4) In this section “continuity authority”—
(a) in relation to sections 63 and 64, means the Bank of England, and
(b) in relation to sections 65 to 68, has the same meaning as in those sections.
(1) The continuity authority may by notice terminate an obligation arising under section 63 or 66.
(2) The power under subsection (1) is exerciseable by giving a notice to each person—
(a) on whom the obligation is imposed, or
(b) who has benefited or might have expected to benefit from the obligation.
(3) In this section “continuity authority”—
(a) in relation to section 63, means the Bank of England, and
(b) in relation to section 66, has the same meaning as in that section.
(4) A reference in subsection (1) to obligations under a section includes a reference to obligations under that section as applied under section 65 or 68.
(1) The Bank of England may suspend obligations to make a payment, or delivery, under a contract where one of the parties to the contract is a bank in respect of which the Bank is exercising a stabilisation power.
(2) A suspension imposed under subsection (1) does not apply to—
(a) payments of eligible deposits or eligible claims, or
(b) payments or deliveries to excluded persons.
(3) A suspension imposed under subsection (1)—
(a) begins when the instrument providing for the suspension is first published,
(b) must end no later than midnight at the end of the first business day following the day on which the instrument providing for the suspension is published, and
(c) subject to subsection (2), suspends all obligations to make a payment or delivery under the contract in question, whether the obligation concerned is that of the bank under resolution or of any other party to the contract.
(4) Where a payment or delivery under the contract concerned first fell due within the period of the suspension, that payment or delivery is treated as being due immediately on the expiry of the suspension.
(5) The power under subsection (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.
(6) The Bank of England must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in subsection (1).
(7) In this section—
“eligible claim” means a claim in respect of which compensation is payable under the Financial Services Compensation Scheme ...
“eligible deposit” means a deposit in respect of which the person, or any of the persons, to whom it is owed would be eligible for compensation under the Financial Services Compensation Scheme ....
(1) Where the Bank of England is exercising a stabilisation power in respect of bank, the Bank may suspend the rights of a secured creditor of the bank to enforce any security interest the creditor has in relation to any assets of the bank.
(2) A suspension under subsection (1)—
(a) begins when the instrument providing for the suspension is first published, and
(b) must end no later than midnight at the end of the first business day following the day on which that instrument is published.
(3) But the Bank of England may not suspend the rights of an excluded person to enforce any security interest that person may have in relation to any asset of the bank under resolution which has been pledged or provided to the excluded person in question as collateral or as cover for margin.
(4) The power under subsection (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.
(5) Where the power in subsection (1) is being exercised in a partial property transfer, the Bank of England must ensure that any restrictions on the enforcement of security interests which it imposes under that subsection are applied consistently for all banking group companies in respect of which the Bank is exercising a stabilisation power.
(6) The Bank of England must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in subsection (1).
(7) For the purposes of this section, a “security interest” means an interest or right held for the purpose of securing the payment of money or the performance of any other obligation.
(1) The Bank of England may suspend the termination right of any party to a qualifying contract (other than a party who is an excluded person).
(2) A contract is a “qualifying contract” for the purpose of this section if—
(a) one of the parties to the contract is a bank in respect of which the Bank is exercising a stabilisation power (a “bank under resolution”) and all the obligations under the contract to make a payment, make delivery or provide collateral continue to be performed, or
(b) one of the parties to the contract is a subsidiary undertaking of a bank under resolution and the condition in subsection (3) is met.
(3) The condition is that—
(a) the obligations of the subsidiary undertaking are guaranteed or otherwise supported by the bank under resolution,
(b) the termination rights under the contract are triggered by the insolvency or the financial condition of the bank under resolution, and
(c) if a property transfer instrument has been made in relation to the bank under resolution—
(i) all the assets and liabilities relating to the contract have been or are being transferred to, or assumed by, a single transferee, or
(ii) the Bank of England is providing adequate protection for the performance of the obligations of the subsidiary undertaking under the contract in any other way.
(4) The Bank of England must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in subsection (1).
(5) The power under subsection (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.
(6) A suspension imposed under subsection (1)—
(a) begins when the instrument providing for the suspension is first published, and
(b) must end no later than midnight at the end of the first business day following the day on which that instrument is published;
....
(7) A person may exercise a termination right under a contract before the expiry of the suspension if that person is given notice by the Bank of England that the rights and liabilities of the bank under resolution covered by the contract are not—
(a) to be transferred to another undertaking through the exercise of a stabilisation power, or
(b) to be made subject to a mandatory reduction instrument or a resolution instrument.
(8) If—
(a) no notice has been given by the Bank of England under subsection (7), and
(b) a termination right has been triggered otherwise than through the exercise of a stabilisation power or the imposition of a suspension under subsection (1) (or the occurrence of an event directly linked to the exercise of a stabilisation power),
a person may, on the expiry of the suspension, exercise the termination right in accordance with the terms of the contract.
(9) But, where the rights and liabilities of the bank under resolution or the subsidiary undertaking under the contract have been transferred to another undertaking, subsection (8) applies only if the event giving rise to the termination right has been triggered by that undertaking.
(10) For the purposes of this section, “termination right” means—
(a) a right to terminate a contract,
(b) a right to accelerate, close out, set-off or net obligations, or any similar provision that suspends, modifies or extinguishes an obligation of a party to the contract, or
(c) a provision that prevents an obligation from arising under the contract.
(1) For the purposes of sections 70A to 70C—
“business day” means any day other than a Saturday, a Sunday, or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom;
“excluded person” means—
a person who has been declared to be, or who is an operator of, a designated system under regulation 4 of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999,
...
a recognised central counterparty ... or third country central counterparty, or
a central bank.
(2) For the purposes of subsection (1) ..., “recognised central counterparty” and “third country central counterparty” have the meaning given in section 285 of the Financial Services and Markets Act 2000.
(1) This section applies to—
(za) mandatory reduction instruments,
(a) share transfer orders,
(b) share transfer instruments, ...
(c) property transfer instruments, and
(d) resolution instruments.
(2) An order or instrument may make provision—
(a) about the consequences of a transfer for a pension scheme;
(b) about property, rights and liabilities of any pension scheme of the bank.
(3) In particular, an order or instrument may—
(a) modify any rights and liabilities;
(b) apportion rights and liabilities;
(c) transfer property of, or accrued rights in, one pension scheme to another (with or without consent).
(4) Provision by virtue of this section may (but need not) amend the terms of a pension scheme.
(5) A share or property transfer instrument may make provision in reliance on this section only with the consent of the Treasury.
(6) In this section—
(a) “pension scheme” includes any arrangement for the payment of pensions, allowances and gratuities, and
(b) a reference to a pension scheme of a bank is a reference to a scheme in respect of which the bank, or a group company of the bank, is or was an employer.
(7) In subsection (6)(b) the reference to a group company of the bank is a reference to anything that is or was a group undertaking in relation to the bank within the meaning given by section 1161(5) of the Companies Act 2006.
(1) This section applies to—
(za) mandatory reduction instruments,
(a) share transfer orders,
(b) share transfer instruments, ...
(c) property transfer instruments, ...
(d) resolution instruments, and
(e) third-country instruments.
(2) An order or instrument may include provision for disputes to be determined in a specified manner.
(3) Provision by virtue of subsection (2) may, in particular—
(a) confer jurisdiction on a court or tribunal;
(b) confer discretion on a specified person.
(1) The Treasury may by regulations make provision about the fiscal consequences of the exercise of the power to make a mandatory reduction instrument or a stabilisation power.
(2) Regulations may relate to—
(a) capital gains tax;
(b) corporation tax;
(c) income tax;
(d) inheritance tax;
(e) stamp duty;
(f) stamp duty land tax;
(g) stamp duty reserve tax.
(3) Regulations may apply to—
(a) anything done in connection with an instrument or order;
(b) things transferred or otherwise affected by virtue of an instrument or order;
(c) a transferor or transferee under an instrument or order;
(d) persons otherwise affected by an instrument or order.
(4) Regulations may—
(a) modify or disapply an enactment;
(b) provide for an action to have or not have specified consequences;
(c) provide for specified classes of property (including securities), rights or liabilities to be treated, or not treated, in a specified way;
(d) withdraw or restrict a relief;
(e) extend, restrict or otherwise modify a charge to tax;
(f) provide for matters to be determined by the Treasury in accordance with provision made by or in accordance with the regulations.
(5) Regulations may make provision for the fiscal consequences of the exercise of the power to make a mandatory reduction instrument or a stabilisation power in respect of things done—
(a) during the period of three months before the date on which the power to make the mandatory reduction instrument or (as the case may be) the stabilisation power is exercised, or
(b) on or after that date.
(5A) Where the mandatory reduction provision required by section 6B is made in two or more mandatory reduction instruments, in subsection (5)(a) above the reference to the date on which the power to make the mandatory reduction instrument is exercised is, in relation to any of those instruments, a reference to the date on which the power is exercised to make the first of those instruments.
(6) In relation to the exercise of a supplemental or onward instrument or order under section 26, 27, 28, 30, 42, 43, 45, 48U or 48V, in subsection (5)(a) above “the stabilisation power” is a reference to the first stabilisation power in connection with which the supplemental or onward instrument or order is made.
(7) The Treasury may by order amend subsection (2) so as to—
(a) add an entry, or
(b) remove an entry.
(8) Regulations or an order under this section—
(a) shall be made by statutory instrument, and
(b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
(1) The Treasury may by order amend the law for the purpose of enabling the powers under this Part to be used effectively, having regard to the special resolution objectives.
(2) An order may be made—
(a) for the general purpose of the exercise of powers under this Part,
(b) to facilitate a particular proposed or possible use of a power, or
(c) in connection with a particular exercise of a power.
(3) An order under subsection (2)(c) may make provision which has retrospective effect in so far as the Treasury consider it necessary or desirable for giving effect to the particular exercise of a power under this Act in connection with which the order is made (but in relying on this subsection the Treasury shall have regard to the fact that it is in the public interest to avoid retrospective legislation).
(4) In subsection (1) “amend the law” means—
(a) disapply or modify the effect of a provision of an enactment (other than a provision made by or under this Act),
(b) disapply or modify the effect of a rule of law not set out in legislation, or
(c) amend any provision of an instrument or order made in the exercise of a stabilisation power.
(5) Provision under this section may relate to this Part as it applies—
(a) to banks,
(b) to building societies,
(c) to credit unions (by virtue of section 89), ...
(ca) to investment firms,
(cb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cc) to third-country institutions,
(cd) to UK branches, or
(d) to any combination.
(6) Specific powers under this Part are without prejudice to the generality of this section.
(7) An order—
(a) shall be made by statutory instrument, and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(8) But if the Treasury think it necessary to make an order without complying with subsection (7)(b)—
(a) the order may be made,
(b) the order shall lapse unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made,
(c) the lapse of an order under paragraph (b) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and
(d) the lapse of an order under paragraph (b) does not prevent the making of a new order (in new terms).
(9) For the purposes of this section—
“third-country institution” has the same meaning as in section 48Z;
“UK branch” means a branch located in the United Kingdom of a third-country institution authorised for the purposes of the Financial Services and Markets Act 2000 by the PRA or the FCA.
(1) The Bank of England may not exercise the power to make a resolution administrator appointment instrument or a mandatory reduction instrument or a stabilisation power in respect of a bank if the Treasury notify the Bank that the exercise would be likely to contravene an international obligation of the United Kingdom.
(2) A notice under subsection (1)—
(a) must be in writing, and
(b) may be withdrawn (generally, partially or conditionally).
(3) If the Treasury give a notice under subsection (1) the Bank of England must consider other exercises of the power to make a resolution administrator appointment instrument or a mandatory reduction instrument or the stabilisation powers with a view to—
(a) pursuing the special resolution objectives, and
(b) avoiding the objections on which the Treasury's notice was based.
(4) The Treasury may by notice to the Bank of England disapply subsection (3) in respect of a bank; and a notice may be revoked by further notice.
(5) “Resolution administrator appointment instrument” means an instrument under section 62B(2)(a).
77 International obligation notice: resolution company
(1) This section applies where the Bank of England has transferred all or part of a bank's business to a resolution company.
(2) The Bank of England must comply with any notice of the Treasury requiring the Bank, for the purpose of ensuring compliance by the United Kingdom with its international obligations—
(a) to take specified action under this Part in respect of the resolution company, or
(b) not to take specified action under this Part in respect of the resolution company.
(3) A notice under subsection (1)—
(a) must be in writing, and
(b) may be withdrawn (generally, partially or conditionally).
(4) A notice may include requirements about timing.
(1) The Bank of England may not exercise the power to make a mandatory reduction instrument or a stabilisation power in respect of a bank without the Treasury's consent if the exercise would be likely to have implications for public funds.
(2) In subsection (1)—
(a) “public funds” means the Consolidated Fund and any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury, and
(b) action has implications for public funds if it would or might involve or lead to a need for the application of public funds.
(3) The Treasury may by order specify considerations which are to be, or not to be, taken into account in determining whether action has implications for public funds for the purpose of subsection (1).
(4) If the Treasury refuse consent under subsection (1), the Bank of England must consider other exercises of the power to make a mandatory reduction instrument or the stabilisation powers with a view to—
(a) pursuing the special resolution objectives, and
(b) avoiding the objections on which the Treasury's refusal was based.
(5) The Treasury may by notice to the Bank of England disapply subsection (4) in respect of a bank; and a notice may be revoked by further notice.
(6) An order under subsection (3)—
(a) shall be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of the House of Commons.
78A Pre-conditions for financial assistance: duty of Bank to give information
(1) The Treasury may at any time require the Bank of England to inform them in writing whether or not a condition for financial assistance has been met in relation to a particular bank.
(2) “Condition for financial assistance” means a condition specified in—
(a) Article 37(10)(a) (financial assistance through government stabilisation tools), or
(b) Article 44(5)(a) (contributions to institution from resolution financing arrangement where bail-in liabilities have been excluded from bail-in),
of the recovery and resolution directive.
(3) If the Bank of England seeks the Treasury’s consent to the making of a mandatory reduction instrument or the exercise of a stabilisation power in accordance with section 78, the Bank must notify the Treasury in writing—
(a) whether or not the proposals involve action in relation to which a condition for financial assistance applies, and
(b) if the proposals do involve such action, whether or not the condition in question has been met.
(4) This section does not apply where the Bank of England has required, or decided to require, a recapitalisation payment under section 214E of the Financial Services and Markets Act 2000.
(1) This section applies where the Bank of England has transferred all or part of a bank's business to a resolution company.
(2) The Bank of England may not take action in respect of the resolution company without the Treasury's consent if the action would be likely to have implications for public funds.
(3) Section 78(2) and (3) have effect for the purposes of this section.
(1) This section applies where the Bank of England sells all or part of a bank's business to a commercial purchaser.
(2) The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments and property transfer instruments under section 11(2).
(3) The report must comply with any requirements as to content specified by the Treasury.
(4) The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under section 11(2).
(1) Where the Bank of England transfers all or part of a bank's business to a resolution company, the Bank must report to the Chancellor of the Exchequer about the activities of the resolution company.
(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer to the resolution company.
(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.
(4) The Chancellor of the Exchequer must lay a copy of each report under subsection (2) or (3) before Parliament.
(5) The Bank must comply with any request of the Treasury for a report dealing with specified matters in relation to a resolution company.
(6) A request under subsection (5) may include provision about—
(a) the content of the report;
(b) timing.
(1) This section applies where the Bank of England makes one or more resolution instruments under section 12A(2) in respect of a bank.
(2) The Bank of England must, on request by the Treasury, report to the Chancellor of the Exchequer about—
(a) the exercise of the power to make a resolution instrument under section 12A(2),
(b) the activities of the bank, and
(c) any other matters in relation to the bank that the Treasury may specify.
(3) In relation to the matters in subsection (2)(a) and (b), the report must comply with any requirements that the Treasury may specify.
(4) The Chancellor of the Exchequer must lay a copy of each report under subsection (2) before Parliament.
(1) Where the Treasury make one or more share transfer orders under section 13(2) in respect of a bank, the Treasury must lay before Parliament a report about the activities of the bank.
(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first share transfer order.
(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.
(4) The obligation to produce reports continues to apply in respect of each year until the first during which no securities issued by the bank are owned by—
(a) a company wholly owned by the Treasury, or
(b) a nominee of the Treasury.
81A Accounting information to be included in reports under sections 80, 80A(2)(b) and 81
(1) A report under section 80(1), 80A(2)(b) or 81 must include accounting information in respect of the bank or resolution company that is the subject of the report.
(2) In this section “accounting information” means—
(a) a balance sheet that, in the opinion of the person making the report, gives a true and fair view of the state of affairs of the bank or resolution company as at the reporting date, and
(b) a profit and loss account that, in the opinion of the person making the report, gives a true and fair view of the profit or loss of the bank or resolution company for the reporting period.
(3) In this section—
(a) “reporting period” means the period to which the report relates, and
(b) “reporting date” means the last day of the reporting period.
81AA Cases where mandatory write-down, conversion etc applies: banking group companies
(1) Section 6B (mandatory write-down, conversion, etc. of capital instruments and relevant internal liabilities) applies in relation to a banking group company in the cases set out in subsections (2), (4) , (8) and (8A).
(2) Case 1 is where—
(a) the conditions imposed by section 81B or 81ZBA on the exercise of a stabilisation power in accordance with section 11(2), 12(2) or 12ZA(3) are met in respect of the banking group company,
(b) the Bank of England has decided to exercise the stabilisation power,
(c) if the banking group company—
(i) is a financial institution which is a subsidiary of an institution (within the meaning of Article 4.1A of the capital requirements regulation) (“the parent institution”), but
(ii) is not an entity within subsection (2A),
the requirements of subsection (3) are met, and
(d) section 12AA (mandatory write-down etc in bail-in cases) does not apply in relation to the banking group company by virtue of the exercise of a power under section 81BA (bail-in: banking group company).
(2A) The entities covered by subsection (2)(c)(ii) are—
(a) an entity of any of the following kinds which is established in the United Kingdom—
(i) a financial holding company;
(ii) a mixed financial holding company;
(iii) a mixed-activity holding company;
(b) a UK parent financial holding company or a UK parent mixed financial holding company,
and expressions used in this subsection have the same meaning as in the capital requirements regulation.
(3) For the purposes of subsection (2)(c)—
(a) the first requirement is that—
(i) the appropriate authority is satisfied that Condition 1 in section 7 is met in relation to the banking group company, and
(ii) the Bank of England is satisfied that Conditions 2, 3 and 4 of that section are met in relation to that company;
(b) the second requirement is that—
(i) where the parent institution is a bank, the PRA is satisfied that Condition 1 in section 7 is met, and the Bank of England is satisfied that Conditions 2, 3 and 4 in that section are met in relation to the parent institution,
(ii) ... and
(iii) where the parent institution is a third-country institution, subsection (7) applies in relation to the banking group company by reason of that third country institution.
(4) Case 2 is where—
(a) the appropriate authority is satisfied that Condition 1 in section 7 is met in respect of the banking group company,
(b) the Bank of England is satisfied that—
(i) (ignoring section 6B) Condition 2 in section 7 is met, and
(ii) that Condition will continue to be met unless the action required by section 6B is taken in respect of the banking group company, and
(c) one of subsections (5) ... or (7) apply in relation to the banking group company.
(5) This subsection applies in relation to the banking group company if—
(a) the PRA is satisfied that Condition 1 in section 7 is met in respect of a bank to which section 81D(1)(a) applies, and
(b) the Bank of England is satisfied that (ignoring section 6B) Condition 2 in section 7 is met in relation to that bank.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) This subsection applies in relation to the banking group company if the relevant third-country authority has determined that any conditions required by the law of the third country to be met before—
(a) any power for the relevant third country authority to write down or convert capital instruments or relevant internal liabilities provided for under the law of that third country may be exercised, or
(b) third-country resolution action may be taken,
are met in relation to a third-country institution to which section 81D(1)(a) applies.
(8) Case 3 is where—
(a) extraordinary public financial support is required by the banking group company other than in circumstances where subsection (5E) of section 7 applies by virtue of paragraph (c) of that subsection, and
(b) the Bank of England is satisfied ... that, in order for a bank ... which is a member of the same group as the banking group company to fulfil its own funds requirements, relevant capital instruments or relevant internal liabilities of the banking group company need to be written down or converted into Common Equity Tier 1 instruments (or both).
(8A) Case 4 is where—
(a) the banking group company is (or, but for the exercise of a stabilisation power, would be) a parent undertaking of a bank from which it has purchased (directly or indirectly) relevant capital instruments or relevant internal liabilities,
(b) the banking group company is not a resolution entity,
(c) the relevant capital instruments or relevant internal liabilities of the banking group company have been purchased (directly or indirectly) by a resolution entity in the same resolution group as the banking group company,
(d) any of the cases provided for in section 6A applies to the bank referred to in paragraph (a) above, and
(e) none of cases 1 to 3 in this section applies to the banking group company.
(9) For the purposes of determining if the matters set out in subsections (3) to (7) are satisfied, the FCA, PRA, Bank of England ... or relevant third-country authority (as the case may be) may ignore any transfer of losses or capital made between members of the group.
(10) For the purposes of subsections (3)(a) and (b), (4), (5) and (8)—
(a) references in section 7 to the bank are to be read—
(i) in the case of subsections (3)(a) and (b), (4) and (5), as references to the banking group company, and
(ii) in the case of subsection (8), as references to the banking group company or the parent institution (as the case may be), and
(b) section 7(5C)(a) is to be ignored in determining whether Condition 1 in that section is met in relation to the banking group company where that company is not a UK authorised person.
(11) For the purposes of subsections (3), (4) and (5), the “appropriate authority” means—
(a) in the case of a banking group company which is a PRA-authorised person, the PRA;
(b) in the case of a banking group company which is a UK authorised person but not a PRA-authorised person, the FCA;
(c) in the case of a banking group company which is not an UK authorised person—
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iii) if the parent undertaking of the group is not a UK authorised person and there is a PRA-authorised person in the group, the PRA; and
(iv) in all other cases, the Bank of England.
(12) Where the PRA is the “appropriate authority” under subsection (11) in relation to a banking group company in the same group as a UK authorised person which is not a PRA-authorised person, the PRA must consult the FCA before making any decision as to whether the conditions referred to in subsection (3)(a), (4)(a) or (5)(a) (the “relevant conditions”) are satisfied.
(13) Where the FCA is the “appropriate authority” under subsection (11) in relation to a banking group company in the same group as a PRA-authorised person, the FCA must consult the PRA before making any decision as to whether the relevant conditions are satisfied.
(14) For the purposes of this section—
...
...
...
...
“financial institution” has the same meaning as in the capital requirements regulation;
“parent undertaking” has the meaning given in Article 4.1(15)(a) of the capital requirements regulation;
“PRA-authorised person” has the meaning given in section 2B(5) of the Financial Services and Markets Act 2000;
“relevant third-country authority” means an authority in a country or territory other than the United Kingdom which has functions corresponding to those of the Bank of England, the FCA or the PRA, in relation to bank recovery and resolution;
“third-country institution” has the meaning given in section 89H(7);
“third-country resolution action” has the meaning given in section 89H(7);
“UK authorised person” has the same meaning as in section 105(8) of the Financial Services and Markets Act 2000.
81B Sale to commercial purchaser and transfer to bridge bank
(1) The Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 11(2) or 12(2) if the following conditions are met.
(2) Condition 1 is that—
(a) the PRA is satisfied that Condition 1 of the general conditions is met in respect of a bank in the same group and the Bank of England is satisfied that Conditions 2, 3 and 4 of the general conditions are met in respect of that bank, or
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) a relevant third-country authority of a third-country institution in the same group is satisfied that any conditions required by the law of the third country to be met before third-country resolution action may be taken are met in relation to that third-country institution.
(2A) For the purposes of determining if a requirement of Condition 1 is met, the PRA, Bank of England ... or relevant third-country authority (as the case may be) may ignore any transfer of losses or capital made between members of the group.
(3) Condition 2 (which does not apply in a financial assistance case) is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in the advancement of one or more of the special resolution objectives.
(4) Condition 3 (which applies only in a financial assistance case) is that—
(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and
(b) in the Bank's opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.
(5) Condition 4 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(6) Before determining whether Condition 2 or 3 (as appropriate) is met, the Bank of England must consult—
(a) the Treasury,
(b) the PRA, and
(c) the FCA.
(7) In exercising a stabilisation power in reliance on this section the Bank of England must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.
(8) In this section “financial assistance case” means a case in which the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank in the same group for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom.
(9) In this section—
...
...
“the general conditions” means the general conditions for the exercise of a stabilisation power set out in section 7;
“relevant third-country authority” has the meaning given by section 81AA(14);
“third-country institution” has the meaning given by section 89H(7);
“third-country resolution action” has the meaning given by section 89H(7).
81ZZBA Sale to commercial purchaser and transfer to bridge bank: supplemental powers in relation to certain holding companies
(1) Without prejudice to the operation of section 81B, the Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 11(2) or 12(2) if the following conditions are met.
(2) Condition 1 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(3) Condition 2 is that the banking group company is an entity within subsection (2A) of section 81AA.
(4) Condition 3 is that the PRA is satisfied that the banking group company is failing or likely to fail.
(5) Condition 4 is that the Bank of England is satisfied that, having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the banking group company that will result in Condition 3 ceasing to be met.
(6) Condition 5 is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in the advancement of one or more of the special resolution objectives.
(7) Condition 6 is that the Bank of England is satisfied that one or more of the special resolution objectives would not be met to the same extent by the winding up of the banking group company.
(8) Condition 7 (which applies only in a financial assistance case) is that—
(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and
(b) in the Bank of England’s opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.
(9) In exercising a stabilisation power in reliance on this section, the Bank of England must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.
(10) In this section “financial assistance case” has the meaning given in section 81B(8).
81ZZBB Assessment of conditions for section 81ZZBA
(1) This section applies for the purposes of section 81ZZBA.
(2) The PRA must treat Condition 3 as met if satisfied that it would be met but for financial assistance provided by—
(a) the Treasury, or
(b) the Bank of England,
disregarding ordinary market assistance offered by the Bank of England on its usual terms.
(3) The Bank of England must treat Condition 4 as met if satisfied that it would be met but for financial assistance of the kind mentioned in subsection (2).
(4) For the purposes of Condition 3, a banking group company is failing or likely to fail if—
(a) it is contravening or likely to contravene a regulatory requirement where that contravention is serious in nature or directly related to a deterioration in the financial situation of the banking group company which threatens the viability of—
(i) the banking group company, or
(ii) another undertaking in the same resolution group,
(b) it is failing, or is likely to fail, to meet the approval conditions set out in section 192R(3) to (6) of the Financial Services and Markets Act 2000 in circumstances where that failure—
(i) would justify the taking of measures in relation to the company by the PRA under section 192T(1) of that Act, and
(ii) is serious in nature,
(c) the value of the assets of the banking group company is less than the amount of its liabilities,
(d) the banking group company is unable to pay its debts or other liabilities as they fall due,
(e) paragraph (c) or (d) (or both) will, in the near future, apply to the banking group company, or
(f) extraordinary public financial support is required in respect of the banking group company and subsection (5) does not apply to it.
(5) This subsection applies where, in order to remedy a serious disturbance in the economy of the United Kingdom and preserve financial stability, the extraordinary financial support takes any of the following forms—
(a) a State guarantee to back liquidity facilities provided by the Bank of England,
(b) a State guarantee of newly issued liabilities,
(c) an injection of own funds, or purchase of capital instruments or liabilities, at prices and on terms that do not confer an advantage upon the banking group company, where none of the circumstances referred to in subsection (4)(a), (b), (c), (d) or (e) are present at the time the public support is granted and none of Cases 1 to 4 in section 6A apply.
(6) Before determining that Condition 3 is met, the PRA must consult the Bank of England.
(7) Before determining whether or not Conditions 4 and (where applicable) 7 are met, the Bank of England must consult—
(a) the Treasury,
(b) the PRA, and
(c) the FCA.
(8) Before determining that Conditions 5 and 6 are met the Bank of England must consult—
(a) the Treasury,
(b) the PRA, and
(c) the FCA.
(9) The special resolution objectives are not relevant to Conditions 3 and 4.
(10) In this section “regulatory requirement” means a requirement imposed—
(a) by or under the Financial Services and Markets Act 2000,
(b) by or under the capital requirements regulation including any assimilated law that was originally made under Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26th June 2013 on prudential requirements for credit institutions and investment firms,
(c) by any enactment which was relied on by the United Kingdom immediately before IP completion day to implement the capital requirements directive and its implementing measures or any assimilated law originally made under that directive, or
(d) by the Bank of England under this Act,
and for the purposes of this definition, “capital requirements directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
(1) The Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 12ZA(3) if the following conditions are met.
(2) Condition 1 is that—
(a) the PRA is satisfied that Condition 1 of the general conditions is met in respect of a bank in the same group and the Bank of England is satisfied that Conditions 2, 3 and 4 of the general conditions are met in respect of that bank, or
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) a relevant third-country authority of a third-country institution in the same group is satisfied that any conditions required by the law of the third country to be met before third-country resolution action may be taken are met in relation to that third-country institution.
(2A) For the purposes of determining if a requirement of Condition 1 is met, the PRA, Bank of England ... or relevant third-country authority (as the case may be) may ignore any transfer of losses or capital made between members of the group.
(3) Condition 2 is that the power is exercised in connection with the exercise of one or more stabilisation powers in respect of the banking group company otherwise than for the purposes of the third stabilisation option.
(4) Condition 3 (which does not apply in a financial assistance case) is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives.
(5) Condition 4 (which applies only in a financial assistance case) is that—
(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and
(b) in the Bank of England’s opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.
(6) Condition 5 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(7) Condition 6 is that the Bank of England is satisfied that—
(a) the situation of the market for the assets which it is proposed to transfer by the exercise of the stabilisation power is of such a nature that the liquidation of those assets under normal insolvency proceedings could have an adverse effect on one or more financial markets,
(b) the transfer is necessary to ensure the proper functioning of the banking group company from which the transfer is to be made, or
(c) the transfer is necessary to maximise the proceeds available for distribution.
(8) Before determining whether Conditions 2 and 5 and Condition 3 or 4 (as appropriate) are met, and if so how to react, the Bank of England must consult—
(a) the PRA,
(b) the FCA, and
(c) the Treasury.
(9) For the purposes of this section—
“financial assistance case” has the meaning given by section 81B(8);
...
and the definitions in section 81B(9) apply.
81ZBB Transfer to asset management vehicle: supplemental powers in relation to certain holding companies
(1) Without prejudice to the operation of section 81ZBA, the Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 12ZA(3) if the following conditions are met.
(2) Condition 1 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(3) Condition 2 is that the banking group company is an entity within subsection (2A) of section 81AA.
(4) Condition 3 is that the PRA is satisfied that the banking group company is failing or likely to fail.
(5) Condition 4 is that the Bank of England is satisfied that, having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the banking group company that will result in Condition 3 ceasing to be met.
(6) Condition 5 is that the power is exercised in connection with the exercise of one or more stabilisation powers in respect of the banking group company otherwise than for the purposes of the third stabilisation option.
(7) Condition 6 is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in the advancement of one or more of the special resolution objectives.
(8) Condition 7 is that the Bank of England is satisfied that one or more of the special resolution objectives would not be met to the same extent by the winding up of the banking group company.
(9) Condition 8 (which applies only in a financial assistance case) is that—
(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and
(b) in the Bank of England’s opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.
(10) Condition 9 is that the Bank of England is satisfied that—
(a) the situation of the market for the assets which it is proposed to transfer by the exercise of the stabilisation power is of such a nature that the liquidation of those assets under normal insolvency proceedings could have an adverse effect on one or more financial markets,
(b) the transfer is necessary to ensure the proper functioning of the banking group company from which the transfer is to be made, or
(c) the transfer is necessary to maximise the proceeds available for distribution.
(11) In this section—
“financial assistance case” has the meaning given in section 81B(8); ...
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