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

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

Interpretation of Part U.K.

181.  In this Part—

• [F1 “crisis prevention measure” has the meaning given in section 48Z(1) of the Banking Act 2009;]

• “the regulator”—

  (a)

  in relation to an undertaking which is a PRA-authorised person, means the PRA; and

  (b)

  in relation to any other undertaking, means the FCA.

• [F2 “supervisory measure” means a power of the FCA or PRA by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to Article 104.1 of the capital requirements directive;]

• “undertaking” means—

  (c)

  an institution which is authorised by the PRA or FCA and is not part of a group subject to supervision on a consolidated basis in accordance with [F3 the capital requirements regulation and CRR rules];

  (d)

  in relation to a relevant group, a group entity set up in the United Kingdom; or

  (e)

  a mixed activity holding company set up in the United Kingdom.

Textual Amendments

F1 Words in art. 181 inserted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 103(2); 2020 c. 1, Sch. 5 para. 1(1)

F2 Words in art. 181 inserted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 103(3) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 10(c)(vi)); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in art. 181 substituted (1.1.2022) by The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376), regs. 1(3), 19(12)

Matters to be notified by the regulator to the Bank U.K.

182.  The regulator must notify the Bank if—

(a) an undertaking notifies the regulator that the undertaking is failing or likely to fail (within the meaning given in [F4 section 7(5C) of the Banking Act 2009]); or

(b) the regulator requires an undertaking to take crisis prevention measures M1 or a [F5 supervisory measure].

Textual Amendments

F4 Words in art. 182(a) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 104(2); 2020 c. 1, Sch. 5 para. 1(1)

F5 Words in art. 182(b) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 104(3); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M1 For the meaning of “crisis prevention measures” see the recovery and resolution directive, Article 2.1, point (101).

Notification that an undertaking is failing or likely to fail U.K.

183.—(1) Where the regulator is satisfied that an undertaking is failing or likely to fail, it must give notice of that fact to the Bank.

(2) Where the Bank is satisfied, having regard to timing and other relevant circumstances, that it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the undertaking that will prevent the failure of the undertaking, the Bank must give notice of that fact to the regulator.

(3) The Bank must also give notice of that fact—

F6 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) to the scheme manager of the Financial Services Compensation Scheme (established under Part 15 of FSMA);

(d) to the Treasury [F7 ; and]

(e) to the Financial Policy CommitteeF8 ...

F9 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This article does not require any information to be disclosed if its disclosure would be contrary to section 348 of FSMA.

Textual Amendments

F6 Art. 183(3)(a)(b) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 105(2)(a); 2020 c. 1, Sch. 5 para. 1(1)

F7 Word in art. 183(3)(d) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 105(2)(b); 2020 c. 1, Sch. 5 para. 1(1)

F8 Word in art. 183(3)(e) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 105(2)(c); 2020 c. 1, Sch. 5 para. 1(1)

F9 Art. 183(3)(f) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 105(2)(d); 2020 c. 1, Sch. 5 para. 1(1)

F10 Art. 183(4) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 105(3); 2020 c. 1, Sch. 5 para. 1(1)

Duty to send copy of share transfer instrument etc to members and creditors of institution U.K.

184.—(1) This article applies where, in respect of an undertaking—

(a) the Bank has applied one or more of the resolution tools; or

(b) the Treasury have made a share transfer order for the purpose of taking the undertaking into temporary public ownership.

(2) Except where securities issued by the undertaking have been admitted to trading on a regulated market (within the meaning given in section 103(1) of FSMA), the Bank must send a copy of any property transfer instrument, resolution instrument, share transfer instrument, share transfer order or third-country instrument made in respect of the undertaking to the members and creditors of the undertaking who are known to the Bank.

(3) In this article—

“member” includes—

(a)

a shareholder of a company;

(b)

a member of a limited liability partnership; and

(c)

a shareholding or borrowing member of a building society established under the Building Societies Act 1986 M2 (“shareholding member” and “borrowing member” have the meaning given in paragraph 5(2) of Schedule 2 to that Act);

“property transfer instrument” means a property transfer instrument (within the meaning given by section 33 M3 ) made under section 11 (private sector purchaser), section 41A M4 (transfer of property subsequent to resolution instrument), section 42 M5 (supplemental instruments), section 42A M6 (private sector purchaser: reverse property transfer), section 43 M7 (onward transfer), section 44 M8 (resolution company: reverse property transfer) or section 44A M9 (bail-in: reverse property transfer);

“resolution instrument” means a resolution instrument made under section 12A (bail-in option), section 48U (supplemental resolution instruments), section 48V (onward transfer) or section 48W (reverse transfer) M10 ;

“share transfer instrument” means a share transfer instrument (within the meaning given by section 15) made under section 11, section 26 M11 (supplemental instruments), section 26A M12 (private sector purchaser: reverse share transfer), section 30 M13 (resolution company: share transfers) or section 31 M14 (resolution company: reverse share transfer);

“share transfer order” means a share transfer order (within the meaning given by section 16) made by the Treasury under section 13 M15 (temporary public ownership), section 27 M16 (supplemental orders), section 28 M17 (onward transfer) or section 29 M18 (reverse share transfer); and

“third-country instrument” has the meaning given in section 89I(4) M19 .

(4) In paragraph (3) each reference to a section is a reference to a section of the Banking Act 2009.

Marginal Citations

M2 1986 c. 53.

M3 Section 33 was amended by S.I. 2014/3329.

M4 Section 41A was inserted of the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraphs 1 and 5(1); and was amended by S.I. 2014/3329.

M5 Section 42 was amended by S.I. 2014/3329.

M6 Section 42A was inserted by the Financial Services Act 2012, section 97(1) and (5).

M7 Section 43 was amended by the Financial Services Act 2012, Schedule 17, paragraph 22, and by S.I. 2014/3329.

M8 Section 44 was amended by the Financial Services Act 2012, section 97 and Schedule 17, paragraph 23, by the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraph 16, and by S.I. 2014/3329.

M9 Section 44A was inserted of the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraphs 1 and 5(3); and was amended by S.I. 2014/3329.

M10 Sections 12A, 48U, 48V and 48W were inserted of the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraphs 1, 2 and 4; and were amended by S.I. 2014/3329.

M11 Section 26 was amended by the Financial Services Act 2012, Schedule 17(1), paragraph 14, and by S.I. 2014/3329.

M12 Section 26A was inserted by the Financial Services Act 2012, section 97(1) and (2).

M13 Section 30 was amended by the Financial Services Act 2012, Schedule 17(1), paragraph 18, and by S.I. 2014/3329.

M14 Section 31 was amended by the Financial Services Act 2012, section 97(4)(a) and (b), section 97(4)(c) and Schedule 17(1), paragraph 12, and by S.I. 2014/3329.

M15 Section 13 was amended by the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraph 13, and by S.I. 2014/3329.

M16 Section 27 was amended by the Financial Services Act 2012, Schedule 17(1), paragraph 15.

M17 Section 28 was amended by the Financial Services Act 2012, Schedule 17(1), paragraph 16.

M18 Section 29 was amended by the Financial Services Act 2012, section 97(3) and Schedule 17(1), paragraph 17.

M19 Section 89I was inserted by S.I. 2014/3329.

[F11 Notifications under articles 182, 183 and 184 U.K.

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

(2) The Bank may make technical standards specifying—

(a) the procedures for, and contents of notifications under article 183(2); or

(b) the procedures for sending documents under article 184.]

Textual Amendments

F11 Art. 184A inserted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 3 para. 106; 2020 c. 1, Sch. 5 para. 1(1)