xmlns:atom="http://www.w3.org/2005/Atom" xmlns:atom="http://www.w3.org/2005/Atom"

Part 1U.K.Special Resolution Regime

Modifications etc. (not altering text)

[F1Chapter 5U.K. Special cases]

Textual Amendments

F1Pt. 1 Ch. 5 formed from ss. 83A-89G (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 98

Building societies, &c.U.K.

[F284D. [F3Transfer to a bridge bank or] Bail-in option: modifications of this Act and other legislationU.K.

[F4(A1)Where a share transfer instrument makes provision under section 84ZA(2) with respect to a building society, the second stabilisation option is to be exercised by making (in that or a subsequent share transfer instrument) provision under section 12(2)(a)—

(a)with respect to the successor company, or

(b)where provision made under section 84ZA includes provision under subsection (3)(g) of that section, with respect to the successor company or its specified parent undertaking.]

(1)Where a resolution instrument makes provision under section 84A(5) with respect to a building society, the exercise of the fourth stabilisation option involves the making (in that or a subsequent resolution instrument) of provision or proposals of any kind mentioned in section 12A(3) to (6)—

(a)with respect to the successor company, or

(b)where provision made under section 84A includes provision under subsection (8) of that section, with respect to the successor company or its specified parent undertaking.

(2)For the purpose of the making of [F5provision as mentioned in subsection (A1)(a) or (b) or] provision or proposals as mentioned in subsection (1)(a) or (b)—

(a)the Table in section 84 does not apply, and

(b)the provisions in the first column of the following Table apply [F6where relevant]

(i)in relation to the successor company, or

(ii)in a case within subsection [F7(A1)(b) or] (1)(b), in relation to the successor company or its specified parent undertaking,

as they apply in relation to a bank, but subject to the modifications in the third column of the Table.

Table
SectionTopicModification
Section 12ABail-in option

Treat references in subsection (4) to securities issued by a specified bank as references to securities issued by the building society, or by the successor company or its specified parent undertaking.

For subsection (8) substitute—

(8)Subsection (8ZA) applies where—

(a)the Bank of England has exercised the power in subsection (4) to transfer securities to a resolution administrator; or

(b)by virtue of section 84A, 84B or 84C securities of a successor company or a specified parent undertaking are held by—

(i)the resolution administrator,

(ii)the Bank of England,

(iii)a subscriber to the memorandum of association of a company into which the building society is converted in accordance with section 84B, or

(iv)a person nominated for the purposes of section 84C(1)(c).

(8ZA)The Bank of England must exercise its functions under this Part (see, in particular, section 48V) with a view to ensuring that any securities—

(a)held by a person in the capacity of a resolution administrator,

(b)held by the Bank of England,

(c)held by a person as a result of being a subscriber to the memorandum of association of a company into which the building society is converted in accordance with section 84B,

(d)held by a person as a result of being nominated by the Bank of England for the purposes of section 84C(1)(c),

are so held only for so long as is, in the Bank of England’s opinion, appropriate having regard to the special resolution objectives..

Section 12AABail-in: sequence of write-down and conversion of capital instruments and liabilitiesIn relation to the result to be achieved, treat any reference to an instrument or liability of the bank as a reference to an instrument or liability of the building society immediately before the making of the first resolution instrument under section 84A in respect of it.
[F8Section 15 Share transfer instrumentsTreat references in subsection (1) to securities issued by a specified bank as references to securities issued by the building society, or by the successor company or its specified parent undertaking.]
Section 17Effect of transfer
Section 18Continuity
[F9Section 19 Conversion and delisting
Section 20Directors and senior managers

Treat references to a director or senior manager of a specified bank as references to a director or senior manager of the building society or of the successor company or its specified parent undertaking.

In subsection (1A) treat the reference to a specified bank as a reference to the building society or its successor company.

Section 21Ancillary instruments: production, registration etc
Section 21Incidental provision
Section 24Procedure: instrumentsOn the first occasion on which the power to make a share transfer instrument is exercised in relation to a building society, treat the references in this section to a bank as a reference to a building society.
Section 26Supplemental InstrumentsTreat the reference in subsection (3) to securities issued by the bank as a reference to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 26ZAOnward share transfer instrumentsTreat references to securities issued by the bank as references to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 30Resolution company: share transfers
Section 31Resolution company: reverse share transfer]
Section 41A, and any other provision so far as relating to property transfer instruments under section 41A(2)Transfer of property subsequent to resolution instrument
[F10Section 44D and any other provision so far as relating to property transfer instruments under section 44D Transfer of property subsequent to share transfer instrumentSection 44D also applies where the Bank of England has made a share transfer instrument in accordance with section 12(2) which provides for the conversion of the building society under section 84ZA(2).]
Section 48BSpecial bail-in provisionThe provision that may be made in accordance with section 48B(1)(b) (see also rule 3(a) and (b) of section 48B(5)) includes provision replacing a liability (of any form) of the building society or its successor company with a liability of the successor company’s specified parent undertaking.
Section 48CMeaning of “protected deposit”
Section 48DGeneral interpretation of section 48B
Section 48EReport on special bail-in provision
Section 48FPower to amend definition of “excluded liabilities”
Section 48GPriority between creditorsTreat the reference in subsection (1) to the treatment of liabilities on an insolvency as a reference to the treatment of liabilities on the insolvency of a building society.
Section 48HBusiness reorganisation plansTreat the reference in subsection (2)(a) to the bank as a reference to the building society.
Section 48LPowers in relation to securitiesTreat references to securities issued by the bank as references to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 48NDirectors and senior managersTreat references to a director or senior manager of a specified bank as references to a director or senior manager of the building society or of the successor company or its specified parent undertaking.
Section 48ODirections in or under resolution instrumentTreat references to a director of the bank as references to a director of the building society or of the successor company or its specified parent undertaking.
Section 48POrders for safeguarding certain financial arrangements
Section 48QContinuity
Section 48RExecution and registration of instruments etc.
Section 48SResolution instruments: general matters
Section 48TResolution instruments: procedureOn the first occasion on which the power to make a resolution instrument is exercised in relation to a building society, treat the first reference in subsection (1) to a bank as a reference to the building society.
Section 48USupplemental resolution instrumentsTreat the reference in subsection (1) to a bank as a reference to the building society.
Section 48VOnward transferTreat references to securities issued by the bank as references to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 48WReverse transferTreat references to securities issued by the bank as references to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 48XReplacement of Bank’s provisional valuationTreat the first reference in subsection (2)(a) to the bank as a reference to the building society.
Section 48YConsequences of a replacement valuationTreat the first reference in subsection (1) to the bank as a reference to the building society.
Section 48ZTermination rights etc.This section applies to contracts and other agreements entered into by the building society or by the successor company or its specified parent undertaking.
Section 49Compensation ordersTreat references to transferors as including references to the shareholding members of the building society.
[F11Section 52 Transfer to resolution company]
Section 52ACompensation orders: bail-in option
Section 53Onward and reverse transfers etc.
Section 54Independent valuer: compensation scheme order or bail-in compensation order
Section 55Independent valuer: supplemental
Section 56Independent valuer: money
Section 57Valuation principles

Treat the reference in subsection (4) to a bank as a reference to the building society.

Treat the reference in subsection (5) to a transferor as including a reference to a shareholding member of the building society.

Section 58Resolution fund
Section 59Third party compensation: discretionary provisionTreat the reference in subsection (1) to a transferor as including a reference to a shareholding member of the building society.
Section 60AFurther mandatory provision: bail-in provision
Section 60BPrinciple of no less favourable treatment

Treat references to pre-resolution shareholders and creditors of a bank as references to persons who were shareholding members of, or creditors of, the building society, immediately before the coming into effect of the first resolution instrument to be made in respect of the building society.

Treat references to the bank as references to the building society.

Section 61Sources of compensation
Section 62Procedure
Section 62AIndependent valuer: sections 6E and 48X
Sections 62B to 62EResolution administrator
Sections 63, 64 and 66 to 70 where they apply in relation to [F12a share transfer instrument or] a resolution instrument or in relation to a property transfer instrument under section 41A(2)Continuity obligationsTreat references in sections 66(1A) and 68(1)(a) to securities issued by the bank as references to securities issued by the building society or by the successor company or its specified parent undertaking.
Section 70ASuspension of obligations
Section 70BRestriction of security interests
Section 70CSuspension of termination rights
Section 70DSuspension: general provisions
Section 71PensionsThis section applies in relation to a pension scheme of the building society or of the successor company.
Section 73Disputes
Section 74TaxThis section enables regulations to make provision in relation to the building society, the successor company or its specified parent undertaking.
Section 75Power to change lawTreat the reference in subsection (5)(b) to building societies as including a reference to successor companies and their specified parent undertakings.
[F13Section 78 Public funds: general]
Section 78APre-conditions for financial assistance: duty of Bank to give information
[F14Section 79 Public funds: resolution companyTreat the reference in subsection (1) to a bank as a reference to a building society or its successor company.
Section 80Resolution company: reportTreat the reference in subsection (1) to a bank as a reference to a building society or its successor company.]
Section 80ATransfer for bail-in purposes: reportTreat the reference in subsection (1) to a bank as a reference to the building society.
Section 81AAccounting information to be included in reports under sections 80, 80A(2)(b) and 81
Sections 83ZA to 83Z2Information, investigation and enforcement
Section 89KInsolvency proceedingsTreat the references in paragraphs (a) and (b) of subsection (1) to a relevant firm as references to the building society.
Section 89LRestrictions on disclosure of confidential information
Section 89MGiving of notices, documents etc. under Part 1

(3)Any statutory instrument made under a provision specified in the first column of the Table in subsection (2) applies—

(a)to the successor company, or

(b)in a case within subsection [F15(A1)(b) or] (1)(b), to the successor company or the specified parent undertaking,

as it applies in relation to a bank, but subject to modifications corresponding to those applying to the provision under which it is made and as if references to a provision modified by subsection (2) or (5) were references to that provision as so modified.

(4)Subsection (3) does not apply where the instrument—

(a)states that it does not apply, or

(b)makes express provision about building societies or their successor companies.

(5)Where a resolution instrument makes provision under section 84A in respect of a building society—

(a)section 81BA (groups: bail-in option) applies with the following modifications—

(i)references to a banking group company are to be read as references to a subsidiary of the building society, and

(ii)the power in subsection (1) of that section is to be exercised only where the Bank of England has exercised the stabilisation power in accordance with section 12A(2) in respect of the parent building society;

(b)section 81CA applies as if references to a banking group company were references to a subsidiary of the building society or of the successor company; and

(c)section 81D (interpretation: “banking group company”) does not apply.

[F16(5A)Where—

(a)the third stabilisation option is exercised in connection with the fourth stabilisation option in respect of a building society, and

(b)before the third stabilisation option is exercised—

(i)the building society is converted into a company pursuant to section 84A(5)(a), or

(ii)all the property, rights and liabilities of the building society are transferred to a company pursuant to section 84A(5)(b),

the references to the bank in section 12ZA(1)(a) and any other provision so far as relating to property transfer instruments under section 12ZA include a reference to the successor company.]

(6)Sections 97 to 102D of the Building Societies Act 1986 (transfer of business of building society to commercial company) do not apply where

[F17(a)a share transfer instrument makes provision under section 84ZA, or

(b)] a resolution instrument makes provision under section 84A.

(7)Section 103 of the Building Societies Act 1986 (cancellation of registration) does not apply where

[F18(a)a share transfer instrument makes provision under section 84ZA(3)(e), or

(b)]a resolution instrument makes provision under section 84A(7)(e).

(8)In this section—

Textual Amendments

F3Words in s. 84D heading inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(10)

F8Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(a)

F9Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(b)

F10Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(c)

F11Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(d)

F12Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(e)

F13Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(f)

F14Words in s. 84D(2) Table inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 22(4)(g)