[89BApplication to [recognised central counterparties] U.K.
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(1)[Subject to subsection (1ZA), this Part] applies to [recognised central counterparties] as it applies to banks, subject to—
[(za)subsection (1A),]
(a)the modifications specified in subsections (2) to (5), and in the Table in subsection (6), and
(b)any other necessary modifications.
[(1ZA)For the purposes of this section and sections 89C to 89G, this Act has effect disregarding any amendments made by the Bank Recovery and Resolution Order 2014 [or by the Bank Recovery and Resolution Order 2016].]
[(1A)The provisions relating to the third stabilisation option (bail-in) are to be disregarded in the application of this Part to recognised central counterparties.]
(2)For section 13 substitute—
13“Transfer of ownership
(1)The [fourth] stabilisation option is to transfer ownership of the [recognised central counterparty] to any person.
(2)For that purpose the Bank of England may make one or more share transfer instruments.”
(3)For sections 28 and 29 substitute—
28“Onward transfer
(1)This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a [recognised central counterparty], in accordance with section 13(2) (“the original instrument”).
(2)The Bank of England may make one or more onward share transfer instruments.
(3)An onward share transfer instrument is a share transfer instrument which—
(a)provides for the transfer of—
(i)securities which were issued by the [recognised central counterparty] before the original instrument and have been transferred by the original instrument or a supplemental share transfer instrument, or
(ii)securities which were issued by the [recognised central counterparty] after the original instrument;
(b)makes other provision for the purposes of, or in connection with, the transfer of securities issued by the [recognised central counterparty] (whether the transfer has been or is to be effected by that instrument, by another share transfer instrument or otherwise).
(4)An onward share transfer instrument may not transfer securities to the transferor under the original instrument.
(5)The Bank of England may not make an onward share transfer instrument unless the transferee under the original instrument is—
(a)the Bank of England,
(b)a nominee of the Treasury, or
(c)a company wholly owned by the Bank of England or the Treasury.
(6)Sections 7 and 8 do not apply to an onward share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Part).
(7)Before making an onward share transfer instrument the Bank of England must consult—
(a)if the [recognised central counterparty] is a PRA-authorised person, the PRA, and
(b)the FCA.
(8)Section 26 applies where the Bank of England has made an onward share transfer instrument.
29Reverse share transfer
(1)This section applies where the Bank of England has made a share transfer instrument in accordance with section 13(2) (“the original instrument”) providing for the transfer of securities issued by a [recognised central counterparty] to a person (“the original transferee”).
(2)The Bank of England may make one or more reverse share transfer instruments in respect of securities issued by the [recognised central counterparty] and held by the original transferee (whether or not they were transferred by the original instrument).
(3)If the Bank of England makes an onward share transfer instrument in respect of securities transferred by the original instrument, the Bank may make one or more reverse share transfer instruments in respect of securities issued by the [recognised central counterparty] and held by a transferee under the onward share transfer instrument (“the onward transferee”).
(4)A reverse share transfer instrument is a share transfer instrument which—
(a)provides for transfer to the transferor under the original instrument (where subsection (2) applies);
(b)provides for transfer to the original transferee (where subsection (3) applies);
(c)makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a) or (b).
(5)The Bank of England may not make a reverse share transfer instrument under subsection (2) unless—
(a)the original transferee is—
(i)the Bank of England,
(ii)a company wholly owned by the Bank of England or the Treasury, or
(iii)a nominee of the Treasury, or
(b)the reverse share transfer instrument is made with the written consent of the original transferee.
(6)The Bank of England may not make a reverse share transfer instrument under subsection (3) unless—
(a)the onward transferee is—
(i)the Bank of England,
(ii)a company wholly owned by the Bank of England or the Treasury, or
(iii)a nominee of the Treasury, or
(b)the reverse share transfer instrument is made with the written consent of the onward transferee.
(7)Sections 7 and 8 do not apply to a reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Part).
(8)Before making a reverse share transfer instrument the Bank of England must consult—
(a)if the [recognised central counterparty] is a PRA-authorised person, the PRA, and
(b)the FCA.
(9)Section 26 applies where the Bank of England has made a reverse share transfer instrument.”
(4)For sections 45 and 46 substitute—
45“Transfer of ownership: property transfer
(1)This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a [recognised central counterparty], in accordance with section 13(2) (“the original instrument”).
(2)The Bank of England may make one or more property transfer instruments.
(3)A property transfer instrument is an instrument which—
(a)provides for property, rights or liabilities of the [recognised central counterparty] to be transferred (whether accruing or arising before or after the original instrument);
(b)makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities of the [recognised central counterparty] (whether the transfer has been or is to be effected by the instrument or otherwise).
(4)The Bank of England may not make a property transfer instrument in accordance with this section unless the original instrument transferred securities to—
(a)the Bank of England,
(b)a company wholly owned by the Bank of England or the Treasury, or
(c)a nominee of the Treasury.
(5)Sections 7 and 8 do not apply to a property transfer instrument made in accordance with this section.
(6)Section 42 applies where the Bank of England has made a property transfer instrument in accordance with this section.
(7)Before making a property transfer instrument in accordance with this section, the Bank of England must consult—
(a)if the [recognised central counterparty] is a PRA-authorised person, the PRA, and
(b)the FCA.
46Transfer of ownership: reverse property transfer
(1)This section applies where the Bank of England has made a property transfer instrument in accordance with section 45(2) (“the original instrument”).
(2)The Bank of England may make one or more reverse property transfer instruments in respect of property, rights or liabilities of the transferee under the original instrument.
(3)A reverse property transfer instrument is a property transfer 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 property, rights or liabilities which are, could be or could have been transferred.
(4)The Bank of England must not make a reverse property transfer instrument unless—
(a)the transferee under the original instrument is—
(i)the Bank of England,
(ii)a company wholly owned by the Bank of England or the Treasury, or
(iii)a nominee of the Treasury, or
(b)the reverse property transfer instrument is made with the written consent of the transferee under the original instrument.
(5)Sections 7 and 8 do not apply to a reverse property transfer instrument made in accordance with this section.
(6)Before making a reverse property transfer instrument in accordance with this section, the Bank of England must consult—
(a)if the [recognised central counterparty] is a PRA-authorised person, the PRA, and
(b)the FCA.
(7)Section 42 applies where the Bank of England has made a reverse property transfer instrument in accordance with this section.”
(5)For section 81 substitute—
81“Transfer of ownership: report
(1)This section applies where the Bank of England makes one or more share transfer instruments in respect of a [recognised central counterparty] under section 13(2).
(2)The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments under that section.
(3)The report must comply with any requirements as to content specified by the Treasury.
(4)The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under section 13(2).”
(6)The table mentioned in subsection (1)(a) is as follows—
TABLE OF MODIFICATIONS
Provision | Modification |
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Section 1 | Ignore subsection (2)(b) and (c). |
In subsection (3)(c), for “to temporary public ownership” substitute “ of ownership ”.
|
In subsection (4)(a), for “15, 16, 26 to 31 and 85” substitute “ 15, 26 and 28 to 31 ”.
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Section 4 | Ignore subsection (2)(b) and (c). |
Ignore subsection (3)(a), (b) and (ba). |
In subsection (5), for “banking” substitute “ financial ”.
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In subsection (6), for “protect depositors” substitute “ maintain the continuity of central counterparty clearing services ”.
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Ignore subsections (8A), (8B) and (9). |
Section 5 | Ignore subsection (1)(b) and (c). |
In subsection (3)—
(a) for “Sections 12 and 13 require” substitute “ Section 12 requires ”, and
(b) ignore the words “and temporary public ownership”.
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Section 6 | In subsection (4)—
(a) after “Before” insert “ issuing or ”, and
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In subsection (5) after “after” insert “ issuing or ”.
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Section 7 | In subsection (1), for “PRA” substitute “ Bank of England ”.
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In subsection (2), for the words following “satisfy the” substitute “ recognition requirements ”.
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The Bank of England may treat Condition 1 as met if satisfied that it would be met but for the withdrawal or possible withdrawal of critical clearing services by the [recognised central counterparty]. |
In subsection (3), for “satisfy the threshold conditions” substitute “ maintain the continuity of any critical clearing services it provides while also satisfying the recognition requirements ”.
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In subsection (4), for “PRA” substitute “ Bank of England ”.
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Ignore subsection (4A). |
In subsection (5)—
(a) for “PRA” substitute “ Bank of England ”, and
(b) ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person, in which case for “Bank of England” substitute “ PRA ”.
|
Ignore subsections (7) and (8). |
For the purposes of section 7—
(a) “critical clearing services” means central counterparty clearing services the withdrawal of which may, in the Bank of England's opinion, threaten the stability of the financial systems of the United Kingdom, and
(b) “recognition requirements” means the requirements resulting from section 286 of the Financial Services and Markets Act 2000.
|
Section 8 | In subsection (1), omit “in accordance with section 11(2) or 12(2)”. |
Ignore subsection (2)(c) and (d). |
In subsection (3), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
In subsection (4), ignore the words “in accordance with section 11(2) or 12(2)”. |
Section 9 | Ignore section 9. |
Section 11 | Ignore subsection (2)(a). |
Section 13 | See above. |
Section 14 | Ignore subsection (5). |
Section 16 | Ignore section 16. |
Section 20 | Ignore subsections (2) and (4). |
Section 24 | In subsection (1), ignore paragraph (c) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 25 | Ignore section 25. |
Section 26 | In subsection (1), for “11(2)” substitute “ 13(2) ”.
|
In subsection (5), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
In subsection (6), for “11(2)” substitute “ 13(2) ”.
|
Sections 26A and 27 | Ignore sections 26A and 27. |
Sections 28 and 29 | See above. |
Section 30 | In subsection (5), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 31 | In subsection (4), for “7, 8 and 51” substitute “ 7 and 8 ”.
|
In subsection (5), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 41 | In subsection (1), ignore paragraph (c) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 42 | In subsection (5), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 42A | In subsection (5), for “7, 8 and 50” substitute “ 7 and 8 ”.
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In subsection (6), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 43 | In subsection (6), for “7, 8 and 52” substitute “ 7 and 8 ”.
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In subsection (7), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Section 44 | In subsection (5), for “7, 8 and 52” substitute “ 7 and 8 ”.
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In subsection (6), ignore paragraph (a) unless the [recognised central counterparty] is a PRA-authorised person. |
Sections 45 and 46 | See above. |
Sections 49 to 53 | Ignore sections 49 to 53. |
Section 54 | In subsection (1), for “A compensation scheme order” substitute “ An order under section 89F ”.
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In subsection (4)(b), for “compensation scheme order” substitute “ the order under section 89F ”.
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Section 55 | In subsection (10), for “to which section 62 applies” substitute “ under section 89F ”.
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Section 56 | In subsection (6), for “to which section 62 applies” substitute “ under section 89F ”.
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Section 57 | In subsection (1), for “A compensation scheme order” substitute “ An order under section 89F ”.
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In subsection (4)(a), for “has had a permission under Part 4A of the Financial Services and Markets Act 2000 (regulated activities) varied or cancelled” substitute “ no longer qualifies as a recognised body under Part 18 of the Financial Services and Markets Act 2000 (recognised investment exchanges and clearing houses) or is subject to a requirement imposed under that Part ”.
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Section 58 | In subsection (1), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.
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Ignore subsection (3). |
In subsection (4), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.
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In subsection (5), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.
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Ignore subsections (6) to (8). |
Section 59 | Ignore section 59. |
Section 60 | In subsection (3)(c), ignore the references to bank insolvency and bank administration. |
In subsection (4)—
(a) ignore paragraphs (a) and (b), and
(b) in paragraph (c), for “a third party compensation order” substitute “ an order under section 89F ”.
|
In subsection (5)—
(a) ignore paragraph (a), and
(b) in paragraph (c), for “a compensation scheme order or resolution fund order” substitute “ an order under section 89F ”.
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Section 61 | In subsection (1)—
(a) ignore paragraphs (a) to (c), and
(b) treat the subsection as including a reference to orders under section 89F.
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Ignore subsection (2)(b). |
Section 62 | Ignore section 62. |
Section 65 | In subsection (1)(a)(ii), for “order” substitute “ instrument ”.
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In subsection (3)—
(a) in paragraph (a), ignore the words “where subsection (1)(a)(i) applies”, and
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Section 66 | In subsection (1)—
(a) in paragraph (a), ignore the reference to section 11(2)(a),
(b) in paragraph (d)(i), ignore the words following “England”, and
(c) ignore paragraph (d)(ii).
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Section 68 | In subsection (1)(a), for “order” substitute “ instrument ”.
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Section 69 | In subsection (4)—
(a) in paragraph (a), ignore the words “in relation to sections 63 and 64”, and
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Section 70 | In subsection (3)—
(a) in paragraph (a), ignore the words “in relation to section 63”, and
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Section 71 | Ignore subsection (1)(a). |
Section 72 | Ignore subsection (1)(a). |
Section 73 | Ignore subsection (1)(a). |
Section 79A | In subsection (2), ignore the words “share transfer instruments and”. |
Section 81 | See above. |
Section 81B | In subsection (1), for “or 12(2)” substitute “ , 12(2) or 13(2) ”.
|
[In subsection (2), for “PRA” substitute “Bank of England”] |
Ignore subsection (3)(c) and (d). |
In subsection (6), ignore paragraph (b) unless the clearing house is a PRA-authorised person. |
Section 81C | In subsection (2), ignore the words “and the bank administration procedure”. |
Ignore subsection (3). |
Sections 82 and 83 | Ignore sections 82 and 83.] |