10.—(1) Section 6C (mandatory reduction instruments: implementation of requirements of section 6B) is amended as follows.
(2) In subsection (4)(a)—
(a)for “parent” (where it first appears) substitute “UK parent”, and
(b)for the words from “resolution” to the end substitute “Bank of England”.
(3) In subsection (4)(b) for “State or a government entity” substitute “Treasury”.
(4) In subsection (4)(d), for the words from “complies” to the end substitute “represents appropriate compensation to the affected creditor for any loss incurred in consequence of the conversion of that instrument.”.
(5) After subsection (4) insert—
“(4A) Where different conversion rates are applied to different classes of instrument, a lower conversion rate must be applied to subordinated debt than is applied to debts ranking higher in the hierarchy of claims in normal insolvency proceedings.”.
(6) In subsection (7), omit the definition of “resolution authority”.