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

  1. Introductory Text

  2. PART 1 Introductory provisions

    1. 1.Citation and commencement

    2. 2.Interpretation

    3. 3.Application of Order

  3. PART 2 Designation of authorities and competent ministry

    1. 4.Designation of the Bank as resolution authority

    2. 5.Designation for the purposes of Article 59 of the recovery and resolution directive

    3. 6.Designation of the Treasury as the ministry responsible for exercising the functions of the competent ministry

  4. PART 3 Recovery and resolution planning

    1. 7.Recovery planning: preparatory steps and simplified obligations

    2. 8.Resolution planning: preparatory steps and simplified obligations

    3. 9.Consultation with the Financial Policy Committee

    4. 10.Provision of information to EBA

  5. PART 4 Recovery plans

    1. CHAPTER 1 Assessment of recovery plan drawn up by an institution

      1. 11.Application and interpretation of Chapter 1

      2. 12.Assessment of plan

      3. 13.Criteria for assessment

      4. 14.Revision of plan

      5. 15.Business changes and relevant measures

    2. CHAPTER 2 Assessment of group recovery plan where the PRA or FCA is the consolidating supervisor

      1. 16.Application and interpretation of Chapter 2

      2. 17.Duty to transmit a copy of group recovery plan

      3. 18.Assessment of group recovery plan

      4. 19.Purpose of assessment

      5. 20.Timing of assessment of plan

      6. 21.Joint assessment of plan

      7. 22.Revision of plan

      8. 23.Business changes and relevant measures

      9. 24.Recovery plan for group institution

      10. 25.References to EBA

      11. 26.Requesting the assistance of EBA

    3. CHAPTER 3 Assessment of group recovery plan where neither the PRA nor the FCA is the consolidating supervisor

      1. 27.Application and interpretation of Chapter 3

      2. 28.Purpose of assessment

      3. 29.Joint assessment of plan

      4. 30.Assessment of recovery plans drawn up on an individual basis

      5. 31.References to EBA

      6. 32.Requesting the assistance of EBA

    4. CHAPTER 4 Review of recovery plans and group recovery plans

      1. 33.Review of recovery plan

      2. 34.Review of group recovery plan assessed under Chapter 2

      3. 35.Review of group recovery plan assessed under Chapter 3

  6. PART 5 Resolution plans

    1. CHAPTER 1 Resolution plans for institutions

      1. 36.Interpretation of Chapter 1

      2. 37.The Bank's duty to draw up resolution plans

      3. 38.Duty to transmit a copy of the resolution plan

    2. CHAPTER 2 Group resolution plan where the PRA or FCA is the consolidating supervisor

      1. 39.Application of Chapter 2

      2. 40.The Bank's duty to draw up group resolution plans

      3. 41.Information to be transmitted for the purpose of drawing up group resolution plans

      4. 42.Joint decision on adoption of group resolution plan

      5. 43.References to EBA

      6. 44.Requesting the assistance of EBA

      7. 45.Duty to transmit a copy of the group resolution plan

    3. CHAPTER 3 Group resolution plan where neither the PRA nor the FCA is the consolidating supervisor

      1. 46.Application and interpretation of Chapter 3

      2. 47.Joint decision on adoption of group resolution plan

      3. 48.Failure to reach joint decision: disagreement by the Bank with a joint proposal

      4. 49.Failure to reach joint decision: agreement by the Bank with a joint proposal

      5. 50.Resolution plan for group entity

      6. 51.References to EBA

      7. 52.Requesting the assistance of EBA

    4. CHAPTER 4 Review of resolution plans and group resolution plans

      1. 53.Review of resolution plan

      2. 54.Review of group resolution plan drawn up by the Bank

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

    5. CHAPTER 5 Information and records for resolution planning

      1. 56.Information required for resolution planning

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

      3. 58.Records of financial contracts

  7. PART 6 Assessment of resolvability and removal of impediments to resolvability

    1. CHAPTER 1 Assessment of resolvability of institutions

      1. 59.Application and interpretation of Chapter 1

      2. 60.Assessment of resolvability

    2. CHAPTER 2 Assessment of resolvability of groups

      1. 61.Application and interpretation of Chapter 2

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

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

    3. CHAPTER 3 Removal of impediments to resolvability of institutions

      1. 64.Application and interpretation of Chapter 3

      2. 65.Notice of determination

      3. 66.Effect of notice of determination

      4. 67.Right of appeal

    4. CHAPTER 4 Removal of impediments to resolvability of group entities where the PRA or FCA is the consolidating supervisor

      1. 68.Application and interpretation of Chapter 4

      2. 69.Report on substantive impediments to the resolvability of group entities

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

      4. 71.Determining remedial measures

      5. 72.Joint decision on impediments to group resolvability and remedial measures

      6. 73.References to EBA

      7. 74.Requesting the assistance of EBA

    5. CHAPTER 5 Removal of impediments to resolvability of groups where neither the PRA nor the FCA is the consolidating supervisor

      1. 75.Application and interpretation of Chapter 5

      2. 75A.Report on substantive impediments to the resolvability of group entities

      3. 76.Suspension of requirement to draw up or review group resolution plan

      4. 77.Determining remedial measures

      5. 78.Joint decision on impediments to group resolvability and remedial measures

      6. 79.Failure to reach joint decision: disagreement by the Bank with joint proposals

      7. 80.Failure to reach joint decision: agreement by the Bank with joint proposals

      8. 81.References to EBA

      9. 82.Requesting the assistance of EBA

  8. PART 7 Intra-group financial support

    1. CHAPTER 1 Authorisation of agreement for group financial support where the PRA or FCA is the consolidating supervisor

      1. 83.Application and interpretation of Chapter 1

      2. 84.Review of group financial support agreement and decision on authorisation

      3. 85.Duty to transmit a copy of application

      4. 86.Joint decision with other competent authorities

      5. 87.References to EBA

      6. 88.Requesting the assistance of EBA

      7. 89.Duty to transmit a copy of authorised agreement

      8. 90.Amendment of authorised agreement

    2. CHAPTER 2 Authorisation of agreement for group financial support where neither the PRA nor the FCA is the consolidating supervisor

      1. 91.Application and interpretation of Chapter 2

      2. 92.Review of group financial support agreement and decision on authorisation

      3. 93.Joint decision with other competent authorities

      4. 94.References to EBA

      5. 95.Requesting the assistance of EBA

      6. 96.Amendment of authorised agreement

    3. CHAPTER 3 Approval of authorised agreements by the members of a UK group entity

      1. 97.Interpretation of Chapter 3

      2. 98.Requirement for approval of authorised agreement

      3. 98A.Publication of information concerning group financial support agreements

      4. 99.Revocation of authorised agreement

      5. 100.Obligation to provide annual report

    4. CHAPTER 4 Provision of group financial support

      1. 101.Interpretation of Chapter 4

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

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

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

      5. 105.Requesting the assistance of EBA

      6. 106.Reciprocal support

  9. PART 8 Early intervention

    1. CHAPTER 1 Early intervention with respect to an institution

      1. 107.Interpretation of Chapter 1

      2. 108.Notice that institution meets the conditions for early intervention

      3. 109.Deadline for compliance with measure for early intervention

    2. CHAPTER 2 Early intervention with respect to groups where the PRA or FCA is the consolidating supervisor

      1. 110.Application and interpretation of Chapter 2

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

      3. 112.Procedure for early intervention in respect of a non-UK group entity

      4. 113.Joint decisions about early intervention

      5. 114.References to EBA

      6. 115.Requesting the assistance of EBA

    3. CHAPTER 3 Early intervention with respect to groups where neither the PRA nor the FCA is the consolidating supervisor

      1. 116.Application and interpretation of Chapter 3

      2. 117.Procedure for early intervention in respect of a UK group entity

      3. 118.Joint decisions about early intervention

      4. 119.References to EBA

      5. 120.Requesting the assistance of EBA

  10. PART 9 Minimum requirement for own funds and eligible liabilities

    1. CHAPTER 1 Determination of minimum requirement for an institution

      1. 121.Interpretation of Chapter 1

      2. 122.Duties of the Bank in relation to minimum requirement

      3. 123.Determination of minimum requirement

      4. 124.Review of minimum requirement

    2. CHAPTER 2 Determination of minimum consolidated requirement where the PRA or FCA is the consolidating supervisor

      1. 125.Application and interpretation of Chapter 2

      2. 126.Determination of minimum consolidated requirement

      3. 127.Joint determination

      4. 128.References to EBA: determination of minimum consolidated requirement

      5. 129.Review of minimum consolidated requirement

    3. CHAPTER 3 Determination of minimum consolidated requirement where neither the PRA nor the FCA is the consolidating supervisor

      1. 130.Application and interpretation of Chapter 3

      2. 131.Joint determination of minimum consolidated requirement

      3. 132.Review of minimum consolidated requirement

    4. CHAPTER 4 Determination of minimum requirements for group institutions where the PRA or FCA is the consolidating supervisor

      1. 133.Application and interpretation of Chapter 4

      2. 134.Duties of the Bank in relation to minimum requirement

      3. 135.Determination of minimum requirement

      4. 136.Joint determination of minimum requirements

      5. 137.References to EBA: determination of minimum requirement

      6. 138.Review of minimum requirements

      7. 139.Minimum requirement for other group entities set up in the United Kingdom

    5. CHAPTER 5 Determination of minimum requirements for group institutions where neither the PRA nor the FCA is the consolidating supervisor

      1. 140.Application and interpretation of Chapter 5

      2. 141.Duties of the Bank in relation to minimum requirement

      3. 142.Determination of minimum requirement

      4. 143.Joint determination of minimum requirements

      5. 144.References to EBA: determination of minimum requirement

      6. 145.Review of minimum requirements

      7. 146.Minimum requirement for other group entities set up in the United Kingdom

    6. CHAPTER 6 Minimum requirement for own funds and eligible liabilities: other provisions

      1. 147.Waiver of application of Chapter 4 ...

      2. 148.Meeting minimum requirement through contractual bail-in instruments etc

  11. PART 10 Requirement to write down or convert capital instruments

    1. 149.Application and interpretation of Part

    2. 150.Determinations under section 6A and 81AA of the Banking Act 2009: preliminary steps for UK group entities

    3. 151.Regulator to take alternative measures

    4. 152.Determination that Case 2, 3, 4 or 5 is satisfied

    5. 153.Joint determination under Article 59(3)(c) of the recovery and resolution directive in relation to a non-UK group entity

  12. PART 11 Removal of procedural impediments to application of bail-in tool

    1. 154.Interpretation of Part

    2. 155.Requirement to increase or remove limit on share capital

    3. 156.Removal of impediments to the conversion of liabilities into shares

  13. PART 11A Contractual recognition of bail-in

    1. 156A.Contractual recognition of bail-in: technical standards

  14. PART 12 Treatment of derivative contracts where bail-in option is applied

    1. 157.Application and interpretation of Part

    2. 158.Liabilities arising from derivative contracts

  15. PART 13 Preparation of business reorganisation plans after application of bail-in tool

    1. CHAPTER 1 Assessment of business reorganisation plan drawn up by an institution

      1. 159.Application and interpretation of Chapter 1

      2. 160.Assessment of business reorganisation plan

      3. 161.Purpose of assessment

      4. 162.Revision of plan

    2. CHAPTER 2 Assessment of business reorganisation plan drawn up by a single group entity

      1. 163.Application and interpretation of Chapter 2

      2. 164.Assessment etc of business reorganisation plan

    3. CHAPTER 3 Assessment of business reorganisation plan drawn up for relevant group where the PRA or FCA is the consolidating supervisor

      1. 165.Application and interpretation of Chapter 3

      2. 166.Duty to transmit a copy of business reorganisation plan

      3. 167.Assessment of business reorganisation plan

      4. 168.Purpose of assessment

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

      6. 170.Joint assessment of plan

      7. 171.Revision of plan

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

      9. 173.References to EBA

      10. 174.Requesting the assistance of EBA

    4. CHAPTER 4 Assessment of business reorganisation plan drawn up for relevant group where neither the PRA nor the FCA is the consolidating supervisor

      1. 175.Application and interpretation of Chapter 4

      2. 176.Purpose of assessment

      3. 177.Joint assessment of plan

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

      5. 179.References to EBA

      6. 180.Requesting the assistance of EBA

  16. PART 14 Procedural obligations where an undertaking is failing or likely to fail

    1. 181.Interpretation of Part

    2. 182.Matters to be notified by the regulator to the Bank

    3. 183.Notification that an undertaking is failing or likely to fail

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

    5. 184A.Notifications under articles 182, 183 and 184

  17. PART 15 Applications to the court in relation to resolution action

    1. 185.Stay of legal proceedings

    2. 186.Remedies on judicial review

  18. PART 16 Cross-border group resolution

    1. CHAPTER 1 General provisions

      1. 187.Principles for reaching decisions which may have an impact in two or more EEA States

      2. 188.Information exchange

      3. 189.Requirements for group resolution schemes

    2. CHAPTER 2 Resolution colleges

      1. 190.Application of Chapter 2

      2. 191.Duty to establish a resolution college

      3. 192.Membership of resolution college

      4. 193.Functioning of resolution college

      5. 194.Use of an existing resolution college

    3. CHAPTER 3 European resolution colleges

      1. 195.Application of Chapter 3

      2. 196.Establishment and functioning of a European resolution college

      3. 197.Recognition of third-country resolution action

      4. 198.Use of an existing resolution college

    4. CHAPTER 4 Group resolution involving a group subsidiary where the PRA or FCA is the consolidating supervisor

      1. 199.Application and interpretation of Chapter 4

      2. 200.Assessment of impact of notified measures

      3. 201.Joint decision on adoption of group resolution scheme

      4. 202.Requesting the assistance of EBA

    5. CHAPTER 5 Group resolution involving a group subsidiary where neither the PRA nor the FCA is the consolidating supervisor

      1. 203.Application Chapter 5

      2. 204.Bank decision that group subsidiary meets the conditions for resolution

      3. 205.Joint decision on adoption of group resolution scheme

      4. 206.Failure to reach joint decision: disagreement by the Bank with joint proposals

      5. 207.Requesting the assistance of EBA

    6. CHAPTER 6 Group resolution where EEA parent undertaking is set up in the United Kingdom

      1. 208.Application and interpretation of Chapter 6

      2. 209.Bank decision that EEA parent undertaking meets the conditions for resolution

      3. 210.Joint decision on adoption of group resolution scheme

      4. 211.Requesting the assistance of EBA

    7. CHAPTER 7 Group resolution where EEA parent undertaking is set up in another EEA State

      1. 212.Application of Chapter 7

      2. 213.Joint decision on adoption of group resolution scheme

      3. 214.Failure to reach joint decision: disagreement by the Bank with joint proposals

      4. 215.Requesting the assistance of EBA

  19. PART 17 Modified application of company law to banks etc in resolution

    1. 216.Interpretation of Part

    2. 217.Shadow directorship

    3. 218.Modified application of legislation on cross-border mergers

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

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

    6. 220A.Modified application of the Companies Act 2006 (shareholders’ rights)

  20. PART 18 Treasury support for investment firms

    1. 221.Investment firms to be treated as financial institutions

  21. PART 19 Miscellaneous provisions

    1. 222.Continuity

    2. 223.Duty to co-operate

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

    4. 225.Duty to inform EBA of imposition of penalties

  22. PART 20 Amendments

    1. 226.Amendments of primary and secondary legislation

  23. PART 21 Review

    1. 227.Review

  24. Signature

    1. SCHEDULE A1

      Information to be contained in a recovery plan or group recovery plan

      1. 1.In this Schedule— (a) “ entity ” means, in relation...

      2. 2.A plan must include— (a) a summary of its key...

      3. 3.The plan must provide for measures to be taken by...

      4. 4.In drawing up the plan the entity must not assume...

      5. 5.The plan must include, where applicable, an analysis of the...

      6. 6.The analysis must identify the assets of the entity which...

      7. 7.The plan must include possible measures which could be taken...

      8. 8.The plan must include appropriate conditions and procedures to ensure...

      9. 9.The plan must contemplate a range of scenarios of severe...

      10. 10.The plan must provide evidence that the management body of...

      11. 11.The plan must include an appropriate framework of indicators established...

      12. 12.The indicators may be of a qualitative or quantitative nature...

      13. 13.The plan must provide details of appropriate arrangements which the...

      14. 14.An entity may— (a) take action under its plan where...

      15. 15.The entity must without delay notify the appropriate regulator of...

    2. SCHEDULE 1

      Information to be contained in a resolution plan

      1. 1.Impediments to the effectiveness of resolution action

      2. 2.The context for resolution action

      3. 3.Application for the use of the Bank's facilities

      4. 4.Options for applying the resolution tools and exercising the resolution powers

    3. SCHEDULE 2

      Information to be contained in a group resolution plan

      1. 1.The context for resolution action

      2. 2.Contents of group resolution plan

      3. 3.The Bank must ensure that the principles set out in...

      4. 4.In this Schedule, “ group resolution ” means—

    4. SCHEDULE 2A

      Additional information which may be required for the purposes of a resolution plan or group resolution plan

      1. 1.In this Schedule, “ entity ” means in relation to...

      2. 2.The additional information referred to in article 8(3)(a) is as...

    5. SCHEDULE 2B

      Matters that the Bank is to consider when assessing resolvability

      1. 1.In this Schedule— (a) “ back-to-back transaction ” means a...

      2. 2.The matters referred to in articles 60(2)(a) and 62(3)(a) are—...

    6. SCHEDULE 3

      Amendments

      1. PART 1 Amendments of FSMA

        1. 1.Amendments of FSMA

        2. 2.Recovery plans

        3. 3.Rules about resolution packs: duty to consult

        4. 4.Special provision relating to adequacy of resolution plans

        5. 5.Recovery plans and resolution packs: restriction on duty of confidence

      2. PART 2 Amendments of other primary legislation

        1. 6.Amendment of the Financial Services (Banking Reform) Act 2013

      3. PART 3 Amendments of secondary legislation

        1. 7.Financial Markets and Insolvency (Settlement Finality) Regulations 1999

        2. 8.Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001

        3. 9.Financial Collateral Arrangements (No 2) Regulations 2003

        4. 10.Credit Institutions (Reorganisation and Winding up) Regulations 2004

        5. 11.Financial Services and Markets Act 2000 (Prescribed Financial Institutions) Order 2013

        6. 12.Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013

        7. 13.Capital Requirements Regulations 2013

    7. SCHEDULE 4

      Modified application of the Companies Act 2006 to banks etc in resolution

      1. PART 1 Provisions concerning the exercise of certain rights of shareholders in listed companies

        1. 1.In relation to a company under resolution, this Part modifies...

        2. 2.Section 145 (effect of provisions of articles as to enjoyment...

        3. 3.Section 153 (exercise of rights where shares held on behalf...

        4. 4.Section 282 (ordinary resolutions) has effect as if, in subsection...

        5. 5.Section 283 (special resolutions) has effect as if, in subsection...

        6. 6.Section 284 (votes: general rules) has effect as if, in...

        7. 7.Section 303 (members' power to require directors to call general...

        8. 8.Section 307 (notice required of general meeting) has effect as...

        9. 9.Part 13 (resolutions and meetings) has effect as if section...

        10. 10.Section 311 (contents of notices of meetings) has effect as...

        11. 11.Part 13 has effect as if the following sections were...

        12. 12.Section 327 (notice required of appointment of proxy etc) has...

        13. 13.Section 330 (notice required of termination of proxy's authority) has...

        14. 14.Part 13 has effect as if section 333A (traded company:...

        15. 15.Section 334 (application to class meetings) has effect as if—...

        16. 16.Section 336 (public companies and traded companies: annual general meeting)...

        17. 17.Section 337 (public companies and traded companies: notice of AGM)...

        18. 18.Part 13 has effect as if the following sections were...

        19. 19.Section 341 (results of poll to be made available on...

        20. 20.Section 352 (application of provisions to class meetings) has effect...

        21. 21.Section 360 (computation of periods of notice etc: clear day...

        22. 22.Section 360A (electronic meetings and voting) has effect as if...

        23. 23.Part 13 has effect as if the following sections were...

      2. PART 2 Provisions concerning mergers and divisions of public limited liability companies

        1. 24.In relation to a company under resolution, Part 27 of...

      3. PART 3 Provisions concerning the maintenance and alteration of a company's share capital

        1. 25.In relation to a company under resolution, this Part modifies...

        2. 26.Section 550 (power of directors to allot shares etc: private...

        3. 27.Section 551 (power of directors to allot shares etc: authorisation...

        4. 28.Part 17 (a company's share capital) has effect as if...

        5. 29.Section 569 (disapplication of pre-emption rights: private company with only...

        6. 30.Section 570 (disapplication of pre-emption rights: directors acting under general...

        7. 31.Section 571 (disapplication of pre-emption rights by special resolution) has...

        8. 32.Section 586 (public companies: shares must be at least one-quarter...

        9. 33.Section 593 (public company: valuation of non-cash consideration for shares)...

        10. 34.Section 617 (alteration of share capital of limited company) has...

        11. 35.Section 618 (sub-division or consolidation of shares) has effect—

        12. 36.Section 656 (public companies: duty of directors to call meeting...

  26. Explanatory Note