Banking Act 2009

Provision	Modification
Section 3	Treat the definition of “normal insolvency proceedings” in subsection (1) as including investment bank special administration established by the Investment Bank Special Administration Regulations 2011 (S.I. 2011/245).
Section 6A	Treat the reference to the PRA in subsections (3)(a) and (7) as references to the FCA.
Section 6C	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 7	(a) Treat the references to the PRA in subsections (1), (5A), (5C), (5D) and (5F) as references to the FCA.(b) . . .(c) If the bank has as a member of its immediate group a PRA-authorised person the FCA must consult the PRA before determining whether or not Condition 2 is met.(d) Subsections (5G)(a) and (5H)(a) do not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 7A	In subsection (1), the reference to the PRA does not apply unless the bank has as a member of its immediate group a PRA-authorised person
. . .	. . .
. . .	. . .
Section 8ZA	(a) Subsection (4)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.. . .
Section 9	Subsection (4)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
. . .	. . .
Section 24	Ignore subsection (1)(c).
Section 25	Ignore subsection (2)(c).
Section 26	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 26ZA	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 26A	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 27	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 28	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 29	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 30	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 31	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 41	Ignore subsection (1)(c).
Section 41A	Subsection (4)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 42	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 42A	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 43	Subsection (7)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 44	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 44A	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 44D	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 44E	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 45	Subsection (8)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 46	Subsection (7)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 48H	Subsection (5)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 48U	Subsection (4)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 48V	Subsection (6)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 48W	Subsection (9)(a) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 63	Treat the reference to insolvency in subsection (1A), as including investment bank special administration, established by the Investment Bank Special Administration Regulations 2011
Section 66	Treat the reference to insolvency in subsection (1ZA), as including investment bank special administration, established by the Investment Bank Special Administration Regulations 2011
Section 81AA	Treat the references to the PRA in subsections (3)(b) and (5)(a) as references to the FCA.
Section 81B	(a) Treat the references to the PRA in subsections (2) and (2A) as references to the FCA. (b) Ignore subsection (6)(b) unless the bank has as a member of its immediate group a PRA-authorised person.
Section 81ZZBA	Treat the reference to the PRA in subsection (4) as a reference to the FCA.
Section 81ZZBB	(a) Treat the references to the PRA in subsections (2) and (6) as references to the FCA.(b) Subsections (7)(b) and (8)(b) do not apply unless the banking group company has as a member of its immediate group a PRA-authorised person.
Section 81ZBA	(a) Treat the references to the PRA in subsections (2)(a) and (2A) as references to the FCA.(b) Ignore subsection (8)(a) unless the bank has as a member of its immediate group a PRA-authorised person.. . .
Section 81ZBB	Treat the reference to the PRA in subsection (4) as a reference to the FCA.
Section 81ZBC	(a) Treat the references to the PRA in subsections (2) and (6) as references to the FCA.(b) Subsections (7)(b) and (8)(b) do not apply unless the banking group company has as a member of its immediate group a PRA-authorised person.
Section 81BA	(a) Treat the references to the PRA in subsections (2)(a) and (2A) as references to the FCA.(b) Subsection (5)(b) does not apply unless the bank has as a member of its immediate group a PRA-authorised person.
Section 81BB	Treat the reference to the PRA in subsection (4) as a reference to the FCA.
Section 81BC	(a) Treat the references to the PRA in subsections (2) and (6) as references to the FCA.(b) Subsections (7)(b) and (8)(b) do not apply unless the banking group company has as a member of its immediate group a PRA-authorised person.
Section 82	(a) Treat the reference to the PRA in subsection (2) as a reference to the FCA.(b) Ignore subsection (5)(a).
. . .	. . .

Application to recognised central counterparties

Dissolution

Disqualification of directors

Interpretation: “the court”

Insolvency Services Account

129A

• (1) In the application of this Part to an FCA-regulated bank the modifications specified in the Table apply.

• (2) In this section—

• “FCA-regulated bank” means a bank which does not carry on any activity which is a PRA-regulated activity for the purposes of the Financial Services and Markets Act 2000;

• “immediate group” has the meaning given by section 421ZA of the Financial Services and Markets Act 2000;

• “PRA-authorised person” has the meaning given by section 2B(5) of that Act.

Status of bank administrator

145A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157A

• (1) In the application of this Part to an FCA-regulated bank the modifications specified in the Table apply.

• (2) In this section “FCA-regulated bank” means a bank which does not carry on any activity which is a PRA-regulated activity for the purposes of the Financial Services and Markets Act 2000.

186A

• (1) The Treasury may amend a recognition order.

• (2) Before amending a recognition order the Treasury must—

• (a) consult the Bank of England and the Payment Systems Regulator,

• (aa) in the case of a recognition order in respect of a DSA service provider, consult the FCA,

• (b) notify the operator of the recognised ... payment system or the recognised DSA service provider (as appropriate), and

• (c) consider any representations made.

(See section 206A(4) for the procedure to be followed before amending a recognition order so as to specify a person under section 206A(2)(b) (service providers in relation to recognised payment systems) in the order.)

• (2A) Before amending a recognition order so as to revoke or amend the specification of a person under section 206A(2)(b), the Treasury must also—

• (a) consult the FCA and the PRA,

• (b) notify the specified person, and

• (c) consider any representations made.

• (3) In addition, the Treasury—

• (a) must consult the FCA before amending a recognition order in respect of a payment system or a DSA service provider, where the operator of the system or the provider—

• (i) is, or has applied to become, a recognised investment exchange, or

• (ii) has, or has applied for, a Part 4A permission, and

• (b) if the operator or provider has, or has applied for, a Part 4A permission for the carrying on of a PRA-regulated activity, must also consult the PRA.

• (4) The Treasury must consider any request by the operator of a recognised ... payment system or by a recognised DSA service provider for the amendment of its recognition order or any request by a service provider in relation to such a system or provider, for the amendment or revocation of its specification.

202A

• (1) If, on the application of the Bank of England, the court is satisfied—

• (a) that there is a reasonable likelihood that there will be a compliance failure, or

• (b) that there has been a compliance failure and there is a reasonable likelihood that it will continue or be repeated,

the court may make an order restraining the conduct constituting the failure.

• (2) If, on the application of the Bank of England, the court is satisfied—

• (a) that there has been a compliance failure by the operator of a recognised ... payment system , a recognised DSA service provider, or a service provider in relation to such a system or such a DSA service provider, and

• (b) that there are steps which could be taken for remedying the failure,

the court may make an order requiring the operator , DSA service provider or service provider, and anyone else who appears to have been knowingly concerned in the failure, to take such steps as the court may direct to remedy it.

• (3) If, on the application of the Bank of England, the court is satisfied—

• (a) that there may have been a compliance failure by the operator of a recognised ... payment system , a recognised DSA service provider, or a service provider in relation to such a system or such a DSA service provider, or

• (b) that a person may have been knowingly concerned in a compliance failure,

the court may make an order restraining the operator , DSA service provider, , service provider or person from dealing with any assets which it is satisfied the operator , service provider or person is reasonably likely to deal with.

• (4) The jurisdiction conferred by this section is exercisable—

• (a) in England and Wales and Northern Ireland, by the High Court, and

• (b) in Scotland, by the Court of Session.

• (5) In this section—

• (a) references to an order restraining anything are, in Scotland, to be read as references to an interdict prohibiting that thing,

• (b) references to remedying a failure include mitigating its effect, and

• (c) references to dealing with assets include disposing of them.

203A

• (1) The Bank of England must maintain satisfactory arrangements for—

• (a) recording decisions made in the exercise of its functions under this Part, and

• (b) the safe-keeping of those records which it considers ought to be preserved.

• (2) The duty in subsection (1) does not apply to a decision to issue a notice under section 204(1).

203B

• (1) At least once a year the Bank of England must make a report to the Treasury on—

• (a) the discharge of its functions under this Part,

• (b) the extent to which, in its opinion, in discharging those functions its financial stability objective has been met, and

• (c) such other matters as the Treasury may from time to time direct.

• (2) Subsection (1) does not require the inclusion in the report of any information whose publication would in the opinion of the Bank of England be against the public interest.

• (3) The Treasury must lay before Parliament a copy of each report received by them under this section.

206B

• (1) If it appears to the Treasury that any action proposed to be taken by the Bank of England in exercising its powers under this Part would be incompatible with any international obligations of the United Kingdom, the Treasury may direct the Bank not to take that action.

• (2) If it appears to the Treasury that any action which the Bank of England has power under this Part to take is required for the purpose of implementing any such obligation, the Treasury may direct the Bank to take that action.

• (3) A direction under this section—

• (a) may include such supplemental or incidental requirements as the Treasury consider necessary or expedient, and

• (b) is enforceable on an application by the Treasury, by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

Bail-in option

48B

• (1) “Special bail-in provision”, in relation to a bank, means any of the following (or any combination of the following)—

• (a) provision cancelling a liability owed by the bank;

• (b) provision modifying, or changing the form of, a liability owed by the bank;

• (c) provision that a contract under which the bank has a liability is to have effect as if a specified right had been exercised under it.

• (2) “Special bail-in provision”, in relation to a bank, also includes any associated provision (see subsection (3)) that the Bank of England may think it appropriate to make in consequence of any provision under subsection (1) that—

• (a) is made in the same resolution instrument, or

• (b) has been made in another resolution instrument in respect of the bank.

• (3) “Associated provision” means provision cancelling or modifying a contract under which a banking group company has a liability.

• (4) A power to make special bail-in provision—

• (a) may be exercised only for the purpose of, or in connection with, reducing, deferring or cancelling a liability of the bank;

• (b) may not be exercised so as to affect any excluded liability.

• (5) The following rules apply to the interpretation of subsection (1).

• (1) The reference to cancelling a liability owed by the bank includes a reference to cancelling a contract under which the bank has a liability.

• (2) The reference to modifying a liability owed by the bank includes a reference to modifying the terms (or the effect of the terms) of a contract under which the bank has a liability.

• (3) The reference to changing the form of a liability owed by the bank, includes, for example—

• (a) converting an instrument under which the bank owes a liability from one form or class to another,

• (b) replacing such an instrument with another instrument of a different form or class, ...

• (c) creating a new security (of any form or class) in connection with the modification of such an instrument, or

• (d) converting those liabilities into securities issued by a bridge bank or a UK parent undertaking (within the meaning of section 6C(7)).

• (6) Examples of special bail-in provision include—

• (a) provision that transactions or events of any specified kind have or do not have (directly or indirectly) specified consequences or are to be treated in a specified manner for specified purposes;

• (b) provision discharging persons from further performance of obligations under a contract and dealing with the consequences of persons being so discharged.

• (7) The form and class of the instrument (“the resulting instrument”) into which an instrument is converted, or with which it is replaced, do not matter for the purposes of paragraphs (a) and (b) of rule 3 in subsection (5); for instance, the resulting instrument may (if it is a security) fall within Class 1 or any other Class in section 14.

• (7A) Liabilities of the bank are “excluded liabilities” if they are—

• (a) liabilities listed in subsection (8), or

• (b) liabilities which the Bank of England has excluded under subsection (10) from the application of special bail-in provision.

• (8) The following liabilities of the bank are the excluded liabilities referred to in subsection (7A)(a) —

• (a) liabilities representing protected deposits;

• (b) any liability, so far as it is secured;

• (c) liabilities that the bank has by virtue of holding client assets;

• (d) liabilities with an original maturity of less than 7 days owed by the bank to a credit institution or investment firm;

• (e) liabilities with a remaining maturity of less than 7 days arising from participation in designated settlement systems and owed to such systems or to operators of, or participants in, such systems;

• (ea) liabilities with a remaining maturity of less than 7 days owed by the bank to a recognised central counterparty ... or a third country central counterparty;

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (g) liabilities owed to an employee or former employee in relation to salary or other remuneration, except —

• (i) variable remuneration that is not regulated by a collective bargaining agreement, and

• (ii) variable remuneration of material risk takers within the meaning of rule 3 of Part 152 (remuneration) of the PRA rulebook (other than persons deemed by virtue of rule 3.2 not to be material risk takers and notified to the PRA in accordance with rule 3.2);

• (h) liabilities owed to a pension scheme, except for liabilities owed in connection with variable remuneration of the kind mentioned in paragraph (g)(i) or (ii),

• (i) liabilities owed to creditors arising from the provision to the bank of goods or services (other than financial services) that are critical to the daily functioning of the bank's operations.

• (j) liabilities owed by the bank to the scheme manager of the FSCS in relation to levies imposed by the scheme manager under section 213(3)(b) of the Financial Services and Markets Act 2000;

• (k) liabilities owed by the bank to another bank or a banking group company which (in either case)—

• (i) is part of the same resolution group as the bank, and

• (ii) is not itself a resolution entity,

where the liabilities do not rank below ordinary non-preferential debts under the hierarchy of claims in normal insolvency proceedings.

• (9) The following special rules apply in cases involving banking group companies—

• (a) a liability is not within subsection (8)(d) if the credit institution or investment firm to which the liability is owed is a banking group company in relation to the bank (see section 81D);

• (b) in subsection (8)(i) the reference to creditors does not include companies which are banking group companies in relation to the bank.

• (10) The Bank of England may, in a resolution instrument, exclude any bail-in liability or class of bail-in liabilities from the application of any special bail-in provision in relation to the bank if, and only if, the Bank of England—

• (a) thinks the exclusion is justified on one or more of the grounds set out in subsection (12), ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) The power conferred by subsection (10) may be exercised to exclude only part of a bail-in liability, or part of each of the bail-in liabilities of a particular class; and where it is so exercised that part is treated as a bail-in liability excluded under that subsection and the remainder is treated as an a bail-in liability which has not been so excluded.

• (12) The grounds are—

• (a) that it is not reasonably possible to give effect to special bail-in provision in relation to the liability or class within a reasonable time;

• (b) that the exclusion is necessary and proportionate to achieve the continuity of critical functions and core business lines in a manner that maintains the ability of the bank to continue key operations, services and transactions;

• (c) that the exclusion is necessary and proportionate to avoid giving rise to widespread contagion, in particular as regards protected deposits held by natural persons or micro, small and medium-sized enterprises, which would severely disrupt the functioning of financial markets, including financial market infrastructures, in a manner that could cause a serious disturbance to the economy of the United Kingdom;

• (d) that the making of special bail-in provision in relation to the liability would cause a reduction in value such that the losses borne by other creditors would be higher than if the liability were excluded.

• (13) When deciding whether to exclude liabilities under subsection (10) or (11), the Bank of England must give due consideration to—

• (a) the principle that all the liabilities of the bank ought to be treated in accordance with the priority they would enjoy on a liquidation,

• (b) the principle that any creditors who would have equal priority on a liquidation ought to bear losses on an equal footing with each other,

• (c) the level of loss absorbing capacity that would remain in the bank if the liability or liabilities of a class were wholly or partly excluded, and

• (d) the need to maintain adequate resources to deal with the implications for public funds of anything done, in future, in connection with the exercise of one or more of the stabilisation powers.

• (13A) The Treasury may by regulations made by statutory instrument make further provision in connection with the exercise of functions under subsection (10) (including provision about further circumstances in which functions under that subsection may or must be exercised).

• (13B) Regulations under subsection (13A) may—

• (a) amend subsections (12) and (13) by adding any provision;

• (b) amend or revoke Commission Delegated Regulation (EU) 2016/860;

• (c) amend that Regulation by adding, omitting or varying any provision (pending the revocation of the whole Regulation under paragraph (b).

• (13C) A statutory instrument containing regulations under subsection (13A) may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.

• (14) For the purposes of subsection (12)—

• “core business lines” means business lines and associated services which represent material sources of revenue, profit or franchise value for the bank or a group which includes the bank (or in the case of an instrument made in relation to a resolution company, of the resolution company);

• “protected deposit” has the meaning given by section 48C, and

• “micro, small and medium-sized enterprises” means micro, small and medium-sized enterprises as defined with regard to the annual turnover criterion referred to in Article 2(1) of the Annex to Commission Recommendation 2003/361/EC.

• (15) For the purposes of the definition of “core business lines”—

• (a) Article 7 of Commission Delegated Regulation (EU) 2016/778 (criteria relating to the determination of core business lines) applies, and

• (b) “group” has the meaning given by section 3(2)(b).

• (16) The Treasury may by regulations made by statutory instrument specify criteria for the determination of the business lines and associated services referred to in the definition of “core business lines”.

• (17) The power conferred by subsection (16) includes—

• (a) power to amend or revoke Article 7 of Commission Delegated Regulation (EU) 2016/778; and

• (b) power to amend or repeal subsection (15)(a).

• (18) A statutory instrument containing regulations under subsection (16) is subject to annulment in pursuance of a resolution of either House of Parliament.

48C

• (1) A deposit is “protected” so far as it is covered by the FSCS.

• (4) In subsection (1) and section 48B(8)(a), “deposit” has the meaning given by article 5(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), but ignoring the exclusions in article 6.

48D

• (1) In section 48B—

• “client assets” means assets which the bank has undertaken to hold on trust for, or on behalf of, a client;

• “contract” includes any instrument;

• “credit institution” means any credit institution as defined in Article 4.1(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council, other than an entity mentioned in Article 2.5(2), (3) or (24) of Directive 2013/36/EU of the European Parliament and of the Council;

• “designated settlement system” means a system which is designated in accordance with the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979);

• ...

• “employee” includes the holder of an office;

• ...

• ...

• “pension scheme” includes any arrangement for the payment of pensions, allowances and gratuities;

• “recognised central counterparty” has the meaning given in section 285 of the Financial Services and Markets Act 2000;

• “secured” means secured against property or rights, or otherwise covered by collateral arrangements;

• “third country central counterparty” has the meaning given in section 285 of the Financial Services and Markets Act 2000.

• (2) In subsection (1)—

• “assets” has the same meaning as in section 232(4) (ignoring for these purposes section 232(5A)(b));

• “collateral arrangements” includes arrangements which are title transfer collateral arrangements for the purposes of section 48.

• (2A) The definition of “investment firm” in section 258A applies for the purposes of section 48B but for these purposes—

• (a) any exclusions made under the power conferred by subsection (2)(b) of section 258A are to be ignored; and

• (b) an institution is to be treated as falling within the definition only if it has permission to carry on the investment services and activities in point 3 or 6 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48E

• (1) This section applies where the Bank of England makes a resolution instrument containing special bail-in provision (see section 48B).

• (2) The Bank of England must report to the Chancellor of the Exchequer stating the reasons why that provision has been made in the case of the liabilities concerned.

• (3) If the provision departs from the insolvency treatment principles, the report must state the reasons why it does so.

• (4) The insolvency treatment principles are that where an instrument includes special bail-in provision—

• (a) the provision made by the instrument must be consistent with treating all the liabilities of the bank in accordance with the priority they would enjoy on a liquidation, and

• (b) any creditors who would have equal priority on a liquidation are to bear losses on an equal footing with each other.

• (5) A report must comply with any other requirements as to content that may be specified by the Treasury.

• (6) A report must be made as soon as reasonably practicable after the making of the resolution instrument to which it relates.

• (7) The Chancellor of the Exchequer must lay a copy of each report under subsection (2) before Parliament.

48F

• (1) The Treasury may by order amend section 48B(8) by—

• (a) adding to the list of excluded liabilities;

• (b) amending or omitting any paragraph of that subsection, other than paragraphs (a) to (c).

• (2) The Treasury may by order amend section 48C or 48D.

• (3) The powers conferred by subsections (1) and (2) include power to make consequential and transitional provision.

• (4) An order under this section—

• (a) is to 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.

• (5) The Treasury must consult before laying a draft order under this section before Parliament.

48G

• (1) The Treasury may, for the purpose of ensuring that the treatment of liabilities in any instrument that contains special bail-in provision is aligned to an appropriate degree with the treatment of liabilities on an insolvency, by order specify matters or principles to which the Bank of England is to be required to have regard in making any such instrument.

• (2) An order may, for example, specify the insolvency treatment principles (as defined in section 48E(4)) or alternative principles.

• (3) An order may specify the meaning of “insolvency” for one or more purposes of the order.

• (4) An order may amend sections 44C(4) and 48E(4).

• (5) An order—

• (a) is to 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.

48H

• (1) A resolution instrument may require a resolution administrator, or one or more directors of the bank, to—

• (a) draw up a business reorganisation plan with respect to the bank, ...

• (b) submit it to the Bank of England within the period allowed by (or under) the instrument ; and

• (c) submit to the Bank of England progress reports on the implementation of the plan at such intervals as the instrument may require.

• (2) “Business reorganisation plan” means a plan that includes—

• (a) an assessment of the factors that caused Condition 1 in section 7 to be met in the case of the bank,

• (b) a description of the measures to be adopted with a view to restoring the viability of the bank, and

• (c) a timetable for the implementation of those measures.

• (3) Where a person has submitted a business reorganisation plan to the Bank of England under subsection (1) (or has re-submitted a plan under subsection (4)), the Bank of England—

• (a) must approve the plan if satisfied that the plan is appropriately designed for meeting the objective mentioned in subsection (2)(b);

• (b) must otherwise require the person to amend the plan in a specified manner.

• (4) Where the Bank of England has required a person to amend a business re-organisation plan, the person must re-submit the amended plan within the period allowed by (or under) the resolution instrument.

• (5) Before deciding what action to take under subsection (3) the Bank of England must (for each submission or re-submission of a plan) consult—

• (a) the PRA, and

• (b) the FCA.

• (6) A business reorganisation plan may include recommendations by the person submitting the plan as to the exercise by the Bank of England of any of its powers under this Part in relation to the bank.

• (7) Where a resolution instrument contains provision under subsection (1), the instrument may—

• (a) specify further matters (in addition to those mentioned in subsection (2)) that must be dealt with in the business reorganisation plan;

• (b) make provision about the timing of actions to be taken in connection with the making and approval of the plan;

• (c) enable any provision that the Bank of England has power under paragraph (a) or (b) to make in the instrument to be made instead in an agreement between the Bank of England and the person required to draw up the business reorganisation plan.

• (7A) The Bank of England may make technical standards which—

• (a) require progress reports mentioned in subsection (1)(c) to include such matters as are specified in the technical standards; or

• (b) otherwise relate to the content of those progress reports, so far as dealing with matters so specified.

• (8) For the purposes of subsection (2)(b) the viability of a bank is to be assessed by reference to whether the bank satisfies, and (if so) for how long it may be expected to continue to satisfy, the threshold conditions (as defined in section 55B of the Financial Services and Markets Act 2000).

48I

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48J

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48K

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48L

• (1) A resolution instrument may—

• (a) cancel or modify any securities to which this subsection applies;

• (b) convert any such securities from one form or class into another.

• (2) Subsection (1) applies to securities issued by the bank that fall within Class 1 in section 14.

• (3) A resolution instrument may—

• (a) make provision with respect to rights attaching to securities issued by the bank;

• (b) provide for the listing of securities issued by the bank to be discontinued or suspended.

• (c) provide for the listing or admission to trading on a regulated market of securities in class 1 (and related class 3 securities) created in accordance with that or any other resolution instrument;

• (d) provide for the listing or admission to trading on a regulated market of existing securities in class 2 modified by that or any other resolution instrument ....

• (4) The reference in subsection (1)(b) to converting securities from one form or class into another includes creating a new security in connection with the modification of an existing security.

• (4A) In subsection (2) any reference to a class of securities is to be construed in accordance with section 14.

• (5) The provision that may be made under subsection (3)(a) includes, for example—

• (a) provision that specified rights attaching to securities are to be treated as having been exercised;

• (b) provision that the Bank of England, or a resolution administrator, is to be treated as authorised to exercise specified rights attaching to securities;

• (c) provision that specified rights attaching to securities may not be exercised for a period specified in the instrument.

• (6) In subsection (3)—

• (a) the reference to “listing” is to listing under section 74 of the Financial Services and Markets Act 2000, and

• (b) “regulated market” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000.

• (6A) Where the listing of securities is suspended in accordance with a resolution instrument, those securities are to be treated for the purposes of section 96 of, and paragraph 23(6) of Schedule 1ZA to, the Financial Services and Markets Act 2000 as still being listed.

• (7) The provision that may be made under this section in relation to any securities is in addition to any provision that the Bank of England may have power to make in relation to them under section 48B.

48M

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48N

• (1) A resolution instrument may enable the Bank of England—

• (a) to remove a director or senior manager of a specified bank;

• (b) to vary the service contract of a director or senior manager of a specified bank;

• (c) to terminate the service contract of a director or senior manager of a specified bank;

• (d) to appoint a director or senior manager of a specified bank.

• (2) Subsection (1) also applies to a director or senior manager of any undertaking which is a banking group company in respect of a specified bank.

• (3) Appointments under subsection (1)(d) are to be on terms and conditions agreed with the Bank of England.

• (4) In this section “senior manager” means a person who—

• (a) exercises executive functions within a specified bank or banking group company, and

• (b) is responsible, and directly accountable to the directors, for the day to day management of that bank or banking group company.

48O

• (1) A resolution instrument may—

• (a) require one or more directors of the bank to comply with any general or specific directions that may be set out in the instrument;

• (b) enable the Bank of England to give written directions (whether general or specific) to one or more directors of the bank.

• (2) A director—

• (a) is not to be regarded as failing to comply with any duty owed to any person (for example, a shareholder, creditor or employee of the bank) by virtue of any action or inaction in compliance with a direction given under subsection (1)(a) or (b);

• (b) is to be immune from liability in damages in respect of action or inaction in accordance with a direction.

• (3) A director must comply with a direction within the period of time specified in the direction, or if no period of time is specified, as soon as reasonably practicable.

• (4) A direction under subsection (1)(a) or (b) is enforceable on an application made by the Bank of England, by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

• (5) See also section 83ZR for further provision about enforcement of a direction under this section.

48P

• (1) In this section “protected arrangements” means security interests, title transfer collateral arrangements, set-off arrangements and netting arrangements.

• (2) In subsection (1)—

• “netting arrangements” means arrangements under which a number of claims or obligations can be converted into a net claim or obligation, and includes, in particular, “close-out” netting arrangements, under which actual or theoretical debts are calculated during the course of a contract for the purpose of enabling them to be set off against each other or to be converted into a net debt;

• “security interests” means arrangements under which one person acquires, by way of security, an actual or contingent interest in the property of another;

• “set-off arrangements” means arrangements under which two or more debts, claims or obligations can be set off against each other;

• “title transfer collateral arrangements” means arrangements under which Person 1 transfers assets to Person 2 on terms providing for Person 2 to transfer assets if specified obligations are discharged.

• (3) The Treasury may by order—

• (a) restrict the exercise of any power within the scope of this paragraph in cases that involve, or where the exercise of the power might affect, protected arrangements;

• (b) impose conditions on the exercise of any power within the scope of this paragraph in cases that involve, or where the exercise of the power might affect, protected arrangements;

• (c) require any instrument that makes special bail-in provision to include specified provision, or provision to a specified effect, in respect of or for purposes connected with protected arrangements;

• (d) provide for an instrument to be void or voidable, or for other consequences to arise, if or in so far as the instrument is made or purported to be made in contravention of a provision of the order (or of another order under this section);

• (e) specify principles to which the Bank of England is to be required to have regard in exercising specified powers—

• (i) that involve protected arrangements, or

• (ii) where the exercise of the powers might affect protected arrangements.

• (4) References to exercising a power within the scope of paragraph (a) or (b) of subsection (3) are to making an instrument containing provision made in reliance on section 12A(3)(a) or 44B (special bail-in provision).

• (5) An order may apply to protected arrangements generally or only to arrangements—

• (a) of a specified kind, or

• (b) made or applying in specified circumstances.

• (6) An order may include provision for determining which arrangements are to be, or not to be, treated as protected arrangements; in particular, an order may provide for arrangements to be classified not according to their description by the parties but according to one or more indications of how they are treated, or are intended to be treated, in commercial practice.

• (7) In this section “arrangements” includes arrangements which—

• (a) are formed wholly or partly by one or more contracts or trusts;

• (b) arise under or are wholly or partly governed by the law of a country or territory outside the United Kingdom;

• (c) wholly or partly arise automatically as a matter of law;

• (d) involve any number of parties;

• (e) operate partly by reference to other arrangements between parties.

• (8) An order—

• (a) is to 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.

48Q

• (1) A resolution instrument may provide for anything (including legal proceedings) that relates to anything affected by the instrument and is in the process of being done immediately before the instrument takes effect to be continued from the time the instrument takes effect.

• (2) A resolution instrument may modify references (express or implied) in an instrument or document.

• (3) A resolution instrument may require or permit any person to provide information and assistance to the Bank of England or another person, for the purposes of or in connection with provision made or to be made in that or another resolution instrument.

48R

• (1) A resolution instrument may permit or require the execution, issue or delivery of an instrument.

• (2) A resolution instrument may provide for any provision in the instrument to have effect irrespective of—

• (a) whether an instrument has been produced, delivered, transferred or otherwise dealt with;

• (b) registration.

• (3) A resolution instrument may provide for the effect of an instrument executed, issued or delivered in accordance with the resolution instrument.

• (4) A resolution instrument may—

• (a) entitle a person to be registered in respect of a security;

• (b) require a person to effect registration.

48S

• (1) Provision made in a resolution instrument takes effect despite any restriction arising by virtue of contract or legislation or in any other way.

• (2) A resolution instrument may include incidental, consequential or transitional provision.

• (3) In relying on subsection (2) a resolution instrument—

• (a) may make provision generally or only for specified purposes, cases or circumstances, and

• (b) may make different provision for different purposes, cases or circumstances.

48T

• (1) As soon as is reasonably practicable after making a resolution instrument in respect of a bank the Bank of England must send a copy to—

• (a) the bank,

• (b) the Treasury,

• (c) the PRA,

• (d) the FCA, and

• (e) any other person specified in the code of practice under section 5.

• (2) As soon as is reasonably practicable after making a resolution instrument the Bank of England must publish a copy—

• (a) on the Bank's internet website, ...

• (b) in two newspapers, chosen by the Bank of England to maximise the likelihood of the instrument coming to the attention of persons likely to be affected, and

• (c) if securities issued by the bank have been admitted to trading on a regulated market (within the meaning of section 103(1) of the Financial Services and Markets Act 2000), by means of a regulatory information service (within the meaning of section 313D of that Act)),

and arrange for the publication of a copy on the internet website of the bank in respect of which the instrument was made.

• (3) Where the Treasury receive a copy of a resolution instrument under subsection (1) they must lay a copy before Parliament.

48U

• (1) This section applies where the Bank of England has made a resolution instrument (“the original instrument”) with respect to a bank.

• (2) The Bank of England may make, with respect to the bank, one or more resolution instruments designated by the Bank of England as supplemental resolution instruments.

• (3) Section 7 does not apply to a supplemental resolution instrument (but it is to be treated in the same way as a resolution instrument for all other purposes, including for the purposes of the application of a power under this Part).

• (4) Before making a supplemental resolution instrument the Bank of England must consult—

• (a) the PRA,

• (b) the FCA, and

• (c) the Treasury.

• (5) The possibility of making a supplemental resolution instrument in reliance on subsection (2) is without prejudice to the possibility of making a new instrument in accordance with section 12A(2) (and not in reliance on subsection (2) above).

48V

• (1) This section applies where the Bank of England has made a resolution instrument (“the original instrument”) providing for securities issued by a specified bank to be transferred to any person.

• (2) The Bank of England may make one or more onward transfer resolution instruments.

• (3) An onward transfer resolution instrument is a resolution instrument which—

• (a) provides for the transfer of—

• (i) securities which were issued by the bank before the original instrument and have been transferred by the original instrument or a supplemental resolution instrument, or

• (ii) securities which were issued by the bank after the original instrument;

• (b) makes other provision for the purposes of, or in connection with, the transfer of securities issued by the bank (whether the transfer has been or is to be effected by that instrument, by another instrument or otherwise).

• (4) An onward transfer resolution instrument may not transfer securities to the transferor under the original instrument.

• (5) Section 7 does not apply to an onward transfer resolution instrument (but it is to be treated in the same way as any other resolution instrument for all other purposes, including for the purposes of the application of a power under this Part).

• (6) Before making an onward transfer resolution instrument the Bank of England must consult—

• (a) the PRA,

• (b) the FCA, and

• (c) the Treasury.

• (7) Section 48U applies where the Bank of England has made an onward transfer resolution instrument.

48W

• (1) This section applies where the Bank of England has made an instrument (“the original instrument”) that is either—

• (a) a resolution instrument providing for the transfer of securities issued by a bank to a person (“the transferee”), or

• (b) an onward transfer resolution instrument (see section 48V) providing for the transfer of securities issued by a bank to a person (“the onward transferee”).

• (2) In a case falling within subsection (1)(a) the Bank of England may make one or more reverse transfer resolution instruments in respect of securities issued by the bank and held by the transferee (whether or not they were transferred by the original instrument).

• (3) In a case falling within subsection (1)(b), the Bank of England may make one or more reverse transfer resolution instruments in respect of securities issued by the bank and held by the onward transferee.

• (4) A reverse transfer resolution instrument is a resolution instrument which—

• (a) provides for transfer to the transferor under the original instrument;

• (b) makes other provision for the purposes of, or in connection with, the transfer of securities which are, or could be or could have been, transferred under paragraph (a).

• (5) Except where subsection (6) applies, the Bank of England may make a reverse transfer resolution instrument under subsection (2) only with the written consent of the transferee.

• (6) This subsection applies where the transferee is—

• (a) a resolution administrator, or

• (b) a person who is not to be authorised to exercise any rights attaching to the securities except on the Bank of England's instructions.

• (7) The Bank of England may make a reverse transfer resolution instrument under subsection (3) only with the written consent of the onward transferee.

• (8) Section 7 does not apply to a reverse transfer resolution instrument (but it is to be treated in the same way as any other resolution instrument for all other purposes including for the purposes of an application of a power under this Part).

• (9) Before making a reverse transfer resolution instrument the Bank of England must consult—

• (a) the PRA,

• (b) the FCA, and

• (c) the Treasury.

• (10) Section 48U applies where the Bank of England has made a reverse transfer resolution instrument.

60A

• (1) The Treasury may make regulations about compensation arrangements in the case of—

• (a) resolution instruments under section 12A(2) and supplemental resolution instruments under section 48U(2), and

• (b) instruments (made under any provision) that include special bail-in provision.

• (2) Regulations may—

• (a) require a resolution fund order, a compensation scheme order, a third party compensation order or a bail-in compensation order to include provision of a specified kind or to specified effect;

• (b) make provision that is to be treated as forming part of any such order (whether (i) generally, (ii) only if applied, (iii) unless disapplied, or (iv) subject to express modification).

• (3) Regulations may provide for whether compensation is to be paid, and if so what amount is to be paid, to be determined by reference to any factors or combination of factors; in particular, the regulations may provide for entitlement—

• (a) to depend in part upon the amounts which are or may be payable under a resolution fund order;

• (b) to be contingent upon the occurrence or non-occurrence of specified events;

• (c) to be determined wholly or partly by an independent valuer (within the meaning of sections 54 to 56) appointed in accordance with a compensation scheme order or bail-in compensation order.

• (4) Regulations may make provision about payment including, in particular, provision for payments—

• (a) on account subject to terms and conditions;

• (b) by instalment.

• (5) Regulations—

• (a) are to 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.

60B

• (1) In making regulations under section 60A the Treasury must, in particular, have regard to the desirability of ensuring that pre-resolution shareholders and creditors of a bank do not receive less favourable treatment than they would have received had the bank entered insolvency immediately before the coming into effect of the initial instrument.

• (2) References in this section to the initial instrument are—

• (a) in relation to compensation arrangements in the case of property transfer instruments under section 11(2), 12(2) or 12ZA(2), to the first instrument to be made under those provisions with respect to the bank;

• (b) in relation to compensation arrangements in other cases, to the first resolution instrument to be made under section 12A with respect to the bank.

• (3) The “pre-resolution shareholders and creditors” of a bank are the persons who held securities issued by the bank, or were creditors of the bank, immediately before the coming into effect of the initial instrument.

• (4) References in this section to insolvency include 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.

81B

• (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).

81C

• (1) In the following provisions references to banks include references to banking group companies—

• (a) section 10(1), ...

• (aa) section 48Z, and

• (b) section 75(5)(a).

• (1A) Where section 6B applies to a banking group company by virtue of section 81AA, sections 6B to 6D apply with the following modifications—

• (a) references to the bank are to be read as references to the banking group company,

• (aa) where Case 4 in section 81AA applies, section 6B(2) is to be read as providing that “the mandatory reduction provision” is provision which, together with the mandatory reduction provision made in respect of any other subsidiary of the resolution entity that is in the same resolution group as the banking group company, produces the results referred to in subsection (1AA) of this section,

• (b) in section 6B, in subsection (8) the reference to section 6A is to be read as a reference to section 81AA and subsection (9) is to be ignored,

• (c) in sections 6B and 6C references, which (by virtue of paragraph (a)) are read as references to a UK parent undertaking of a banking group company, include, where the banking group company satisfied section 81D(1)(a) by reference to a bank which is not a UK parent undertaking of the banking group company, a reference to that bank,

• (d) for the purposes of section 6D, references to a bank in sections 48L(3), 48O and 48T are to be read as references to the banking group company, and, where the banking group company satisfied section 81D(1)(a) by reference to a bank (“the failing bank”), those references to a bank (except the first reference in section 48T(1)) are also to be read as including a reference to the failing bank.

• (1AA) The results are that—

• (a) the principal amount of the relevant capital instruments or relevant internal liabilities of the banking group company is reduced, or

• (b) such instruments or liabilities of the banking group company are converted (directly or indirectly) into Common Equity Tier 1 instruments,

(or both (a) and (b)) in accordance with the principle that losses of the bank referred to in relation to that banking group company in section 81AA(8A)(a) are effectively passed on to, and the bank is recapitalised by, the resolution entity that is in the same resolution group as the banking group company.

• (1B) Where the Bank of England makes a mandatory reduction instrument in respect of a banking group company, section 6E applies (with any necessary modifications) as if the banking group company were a bank.

• (2) Where the Bank of England exercises a stabilisation power in respect of a banking group company in reliance on section 81B , 81ZZBA, 81ZBA or 81ZBB, the provisions relating to the stabilisation powers and the bank administration procedure contained in this Act (except sections 7 , 8 and 8ZA) and any other enactment apply (with any necessary modifications) as if the banking group company were a bank.

• (3) For the purposes of the application of section 143 (grounds for applying for bank administration order), the reference in subsection (2) to the Bank of England exercising a stabilisation power includes a case where the Bank of England intends to exercise such a power.

81D

• (1) In this Part “banking group company” means an undertaking—

• (a) which is (or, but for the exercise of a stabilisation power, would be) in the same group as a bank ... or third-country institution (within the meaning of section 81AA(14)), and

• (b) in respect of which any conditions specified in an order made by the Treasury are met.

• (2) An order may require the Bank of England to consult specified persons before determining whether the conditions are met.

• (3) An order—

• (a) is to 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.

• (4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—

• (a) the order may be made, and

• (b) the order lapses 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.

• (5) The lapse of an order under subsection (4)(b)—

• (a) 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

• (b) does not prevent the making of a new order (in new terms).

• (6) Undertakings are in the same group for the purposes of sections 81AA to 81CA and this section if they are group undertakings in respect of each other.

• (7) Expressions defined in the Companies Act 2006 have the same meaning in sections 81B to 81CA and this section as in that Act.

Investment firms

89A

• (1) This Part applies to investment firms as it applies to banks, subject to the modifications in the following Table—

Provision	Modification
Section 1	Ignore subsection (2)(b).
Section 3	In subsection (1), in the definition of “normal insolvency proceedings” ignore the reference to the bank insolvency procedure.
Section 4	Ignore subsections (2)(b), (6) and (7)(b).
Section 5	Ignore subsection (1)(b).
Section 7	Ignore subsection (7).
. . .	. . .
Section 8ZA	In subsection (5), ignore the reference to the bank insolvency procedure.
Section 12AA	References to normal insolvency proceedings do not include a reference to the bank insolvency procedure.
Section 14	Ignore subsection (5).
Section 60	In subsection (3)(c), ignore the reference to bank insolvency.
Section 60B	In subsection (4), ignore the reference to bank insolvency.
Section 63	In subsection (1A), ignore the reference to bank insolvency.
Section 66	In subsection (1ZA), ignore the reference to bank insolvency.

• (2) In the case of investment firms which are FCA-regulated investment firms, in subsection (1) the reference to this Part is a reference to this Part as it applies to FCA-regulated banks by virtue of section 83A.

• (3) In this section—

• “FCA-regulated bank” has the meaning given by section 83A(2);

• “FCA-regulated investment firm” means an investment firm which does not carry on any activity which is a PRA-regulated activity for the purposes of the Financial Services and Markets Act 2000.

...

89B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89F

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89G

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional general powers

Partnerships

Evidence

Fees

Rights in insolvency

Investing in National Loans Fund

Regulations

Payments in error

Delegation of functions

Compensation: valuer

Overview

Compensation: valuer

Tenure

Weekly return

Abolition for cheques

Supplemental

Abolition for cheques

258A

• (1) In this Act “investment firm” means a UK institution which is (or, but for the exercise of a stabilisation power, would be) an investment firm for the purposes of Regulation (EU) No. 575/2013 of the European Parliament and of the Council as it forms part of assimilated law.

• (2) But “investment firm” does not include—

• (a) an institution which is also—

• (i) a bank (within the meaning of Part 1),

• (ii) a building society (within the meaning of section 119 of the Building Societies Act 1986), or

• (iii) a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or

• (b) an institution which is of a class or description specified in an order made by the Treasury.

• (3) An order—

• (a) is to 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.

• (4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—

• (a) the order may be made, and

• (b) the order lapses 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.

• (5) The lapse of an order under subsection (4)(b)—

• (a) 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

• (b) does not prevent the making of a new order (in new terms).

• (6) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.

36A

• (1) A property transfer instrument may enable the Bank of England—

• (a) to remove a director or senior manager of a specified bank;

• (b) to vary the service contract of a director or senior manager of a specified bank;

• (c) to terminate the service contract of a director or senior manager of a specified bank;

• (d) to appoint a director or senior manager of a specified bank.

• (2) Subsection (1) also applies to a director or senior manager of any undertaking which is a banking group company in respect of a specified bank.

• (3) Appointments under subsection (1)(d) are to be on terms and conditions agreed with the Bank of England.

• (4) In this section “senior manager” means a person who—

• (a) exercises executive functions within a specified bank or banking group company, and

• (b) is responsible, and directly accountable to the directors, for the day to day management of that bank or banking group company.

• (5) In this section references to a bank include a resolution company (whether or not it is a bank).

39A

Paragraphs 59, 60 and 108 of Schedule 11 to the Financial Services and Markets Act 2023 (recognised central counterparty rules, membership and recognition) apply in relation to a bank which would be a recognised central counterparty but for paragraph 155(2) of Schedule 11 to that Act (exclusion of banks etc from definition of recognised central counterparty) as they apply in relation to a recognised central counterparty.

159A

This Part applies to investment firms as it applies to banks.

Chapter 1 — Introduction

Chapter 2 — Pre-resolution powers of the Bank of England

3A

• (1) In this section “relevant person” means—

• (a) an institution authorised for the purpose of the Financial Services and Markets Act 2000 by the PRA or FCA,

• (b) a parent of such an institution which—

• (i) is a financial holding company or a mixed financial holding company; and

• (ii) is established in, or formed under the law of any part of, the United Kingdom, or

• (c) a subsidiary of such an institution or of such a parent which—

• (i) is a financial institution authorised by the PRA or FCA, and

• (ii) is established in, or formed under the law of any part of, the United Kingdom.

• (2) The Bank of England may give directions to a relevant person requiring that person to take measures which, in the opinion of the Bank of England, are required to address impediments to—

• (a) the effective exercise of the stabilisation powers, or

• (b) the winding up of that person (whether by use of the bank insolvency procedure provided for under Part 2 of this Act or otherwise).

• (3) The power conferred by subsection (2) includes a power to direct a relevant person—

• (a) to amend a group financial support agreement;

• (b) where there is no such agreement, to review the need to enter into one;

• (c) to enter into an agreement for the provision of services relating to the provision of critical functions;

• (d) to limit that person’s maximum individual and aggregate exposures (with “exposure” for this purpose having the meaning given in the capital requirements regulation);

• (e) to produce information which is relevant to the exercise of the stabilisation powers, and to provide that information to the Bank of England;

• (f) to dispose of specified assets;

• (g) to cease carrying out specified activities, or observe restrictions in relation to the carrying out of specified activities;

• (h) to cease the development of new or existing business operations, or observe restrictions in relation to the development of such operations;

• (i) in order to ensure that it is possible for the performance of critical functions to be legally or operationally separated from the performance of other functions—

• (i) to change its legal or operational structure, or

• (ii) so far as it is able to do so, to change the legal or operational structure of a subsidiary;

• (j) to establish a financial holding company which is not a subsidiary of an institution, another financial holding company or a mixed financial holding company.

• (4) The Bank of England may give directions to a relevant person requiring that person to maintain or issue particular kinds of bail-in liabilities.

• (4A) Where the Bank of England gives directions to a relevant person under subsection (4) the bail-in liabilities that the person is required to maintain or issue are referred to, in relation to that person, as “eligible liabilities”.

• (4B) The Bank of England may give directions to a relevant person requiring that person—

• (a) to maintain a minimum requirement for own funds and eligible liabilities, and

• (b) for the purpose of paragraph (a), to change the maturity profile of own funds instruments and eligible liabilities or take other specified steps.

• (4C) The Bank of England must not exercise the power under subsection (4B)(b) in relation to the maturity profile of own funds instruments—

• (a) in the case of a relevant person which is—

• (i) an institution authorised for the purpose of the Financial Services and Markets Act 2000 by the PRA, or

• (ii) a parent of such an institution or subsidiary of such an institution or such a parent for the purposes of paragraph (b) or (c) of subsection (1),

without the consent of the PRA, or

• (b) in the case of a relevant person to which paragraph (a) does not apply, without the consent of the FCA.

• (5) Under subsection (4B), the Bank may, in particular, direct a relevant person to endeavour to re-negotiate any eligible liability or relevant capital instruments issued by that person, for the purpose of ensuring that any decision by the Bank to write down or convert the liability or instrument concerned would have effect under the law which governs that liability or instrument.

• (6) The Bank may give directions to a relevant MAHC requiring it to establish a separate financial holding company as a parent of an institution for the purpose of—

• (a) facilitating the exercise of the stabilisation powers, or

• (b) ensuring that the exercise of a stabilisation power does not have an adverse effect on the non-financial part of the group of the relevant MAHC.

• (7) Directions under this section—

• (a) must be in writing, and

• (b) may be given with general effect or with respect to a particular relevant person or class of relevant persons.

• (8) In this section—

• “financial holding company” has the meaning given by Article 4.1(20) of the capital requirements regulation;

• “financial institution” has the meaning given by Article 4.1(26) of the capital requirements regulation;

• “group” has the meaning given in section 3(2)(b);

• “group financial support agreement” has the meaning given by section 192JB(4) of the Financial Services and Markets Act 2000;

• “institution” (except in the phrase “financial institution”) means a bank , building society (within the meaning of section 119 of the Building Societies Act 1986) or investment firm;

• “mixed financial holding company” has the meaning given by Article 4.1(21) of the capital requirements regulation;

• “parent” means a parent undertaking within the meaning given by section 1162 of the Companies Act 2006;