C1C2Part 1Special Resolution Regime
Pt. 1: power to amend conferred (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 17(3)(f), 148(5); S.I. 2014/377, art. 2(1)(b), Sch. Pt. 2
F6Chapter 3 Special resolution action
Pt. 1 Ch. 3 formed from ss. 4-83 (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 7
The stabilisation options
I2I112Bridge bank
1
The second stabilisation option is to transfer all or part of the business of the bank to a company which F3meets the requirements of subsection (1A) (a “bridge bank”).
F11A
Those requirements are that the company—
a
is wholly or partially owned by the Bank of England,
b
is controlled by the Bank, and
c
is created for the purposes of receiving a transfer by virtue of this section with a view to maintaining access to critical functions and (in due course) selling the bank or its business.
2
For the purpose of subsection (1) the Bank of England may make—
a
one or more share transfer instruments;
b
one or more property transfer instruments.
3
The code of practice under section 5 must include provision about the management and control of bridge banks including, in particular, provision about—
a
setting objectives,
b
the content of the articles of association,
c
the content of reports under section 80(1),
d
different arrangements for management and control at different stages, and
e
eventual disposal.
F23A
Where—
a
all or substantially all of the bridge bank’s assets, rights and liabilities have been transferred to a third party, or
b
following a transfer to the bridge bank under this section, no further transfer to the bridge bank is made under this section during the relevant post-transfer period,
the Bank of England must, without delay, take all necessary steps to wind up the bridge bank.
3B
But subsection (3A)(b) does not apply if the bridge bank—
a
has merged with another entity,
b
has ceased to meet the requirements of subsection (1A)(a) or (b), or
c
has already been wound up.
3C
“The relevant post-transfer period” means the period of two years beginning with the day of the transfer mentioned in subsection (3A)(a), subject to any extension under subsection (3D).
3D
The Bank of England may extend (or further extend) the relevant post-transfer period by one year if it is satisfied that the extension—
a
would support one or more of the outcomes mentioned in subsection (3A)(a) or (3B)(a), (b) or (c), or
b
is necessary to ensure the continuity of essential banking or financial services.
4
Where property, rights or liabilities are first transferred by property transfer instrument to a bridge bank and later transferred (whether or not by the exercise of a power under this Part) to another company which F4meets the requirements of subsection (1A), that other company is an “onward bridge bank”.
5
An onward bridge bank—
a
is a bridge bank for the purposes of—
F5i
subsections (3) to (3B),
ia
section 8ZA(3)(b),
ib
section 12ZA(1)(b) and (2)(c),
ii
section 77,
iii
section 79, and
iv
section 80(5), but
b
is not a bridge bank for the purposes of—
i
section 30(1),
ii
section 43(1), or
iii
section 80(1).
Pt. 1 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2