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

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

Application of Chapter 7

212.  This Chapter applies where, in relation to a relevant group—

(a) the EEA parent undertaking is set up in another EEA State;

(b) the Bank receives a notice from the resolution authority for the EEA parent undertaking (“the notifying authority”)—

(i) communicating its decision that the EEA parent undertaking meets the conditions for resolution; and

(ii) proposing measures for taking resolution action or insolvency proceedings in respect of that undertaking; and

(c) the notified measures include the implementation of a group resolution scheme adopted for the relevant group.

Joint decision on adoption of group resolution scheme

213.  The Bank must endeavour to reach a joint decision on the adoption of a group resolution scheme with the notifying authority and other resolution authorities which are members of the college.

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

214.—(1) Where the Bank, having taken account of the group resolution plan and any resolution plans adopted for group subsidiaries—

(a) disagrees with a proposal for a group resolution scheme, or

(b) considers that it needs to take independent resolution action or other measures in respect of a group subsidiary in the interest of financial stability,

it must give the notifying authority and the other members of the college a notice which sets out in detail its reasons for disagreement or independent action and what resolution action or other measures it intends to take in respect of the group subsidiary.

(2) The Bank must include in its reasons for disagreement an assessment of the potential impact of the resolution action or other measures that it intends to take in respect of the group subsidiary on other group entities and on the financial stability of other EEA States whose resolution authorities are members of the college.

(3) The Bank must take resolution action and other measures in respect of the group subsidiary in close co-operation with the other members of the college with a view to ensuring that there is a co-ordinated strategy for applying the resolution tools and exercising the resolution powers in respect of group entities.

(4) Co-operation under paragraph (3) includes informing the other members of the college regularly and fully about the action and other measures being taken and progress being made.

Requesting the assistance of EBA

215.  The Bank may ask EBA to assist the resolution authorities in accordance with Article 31(c) of the EBA Regulation to reach a joint decision on the adoption of a group resolution scheme for the relevant group.