Modifications etc. (not altering text)
C1Pt. 1 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2
C2Pt. 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
Textual Amendments
F1Pt. 1 Ch. 6, 7 inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 103
(1)This section applies where the Bank of England is notified of third-country resolution action in respect of a third-country institution or third-country parent undertaking.
(2)The Bank must make an instrument which—
(a)recognises the action, or
(b)refuses to recognise the action, or
(c)recognises part of the action and refuses to recognise the remainder.
An instrument within paragraph (a), (b) or (c) is a “third-country instrument” (as is an instrument under section 89I(4)(b)).
(3)The Bank may only make a decision under subsection (2) with the approval of the Treasury.
(4)Recognition of the action (or a part of it) may be refused only if the Bank and the Treasury are satisfied that one or more of the following conditions are satisfied—
(a)recognition would have an adverse effect on financial stability in the United Kingdom or another EEA state;
(b)the taking of action in relation to a branch located in the United Kingdom of a third-country institution is necessary to achieve one or more of the special resolution objectives;
(c)under the third-country resolution action creditors (including in particular depositors) located or payable in an EEA state would not, by reason of being located or payable in the EEA state, receive the same treatment as creditors (including depositors) who are located or payable in the third country concerned and have similar legal rights;
(d)recognition of, and taking action in support of, the third-country resolution action (or the part) would have material fiscal implications for the United Kingdom;
(e)recognition would be unlawful under section 6 of the Human Rights Act 1998 (public authority not to act contrary to Human Rights Convention) or contrary to a provision of EU law.
(5)The recognition of third-country resolution action (or any part of it) is without prejudice to any normal insolvency proceedings.
(6)When exercising any function under or by virtue of this section or section 89I, the Bank and the Treasury must give due consideration to the interests of any EEA state where the third-country institution or third-country parent undertaking operates, and (in particular) to the potential effect of the exercise of any of those functions on—
(a)where the institution or undertaking is a member of a group, any member of the group in such an EEA state, and
(b)the financial stability in such an EEA state.
(7)In this section—
“EU institution” has the meaning given by Article 2.1(23) of the recovery and resolution directive,
“group” has the meaning given by section 474 of the Companies Act 2006,
“normal insolvency proceedings” has the meaning given in Article 2.1(47) of the recovery and resolution directive (and, in particular, includes the bank insolvency procedure and the bank administration procedure),
“third-country group company” means an undertaking—
which is (or, but for third-country resolution action or the exercise of a stabilisation power, would be) in the same group as a third-country institution or a third-country parent undertaking, and
in respect of which any conditions specified in an order made by the Treasury under section 81D are met (applying that order as if references to the bank were references to the third-country institution or third-country parent undertaking),
“third-country institution” has the meaning given by Article 2.1(86) of the recovery and resolution directive;
“third-country parent undertaking” has the meaning given by Article 2.1(87) of the recovery and resolution directive;
“third-country resolution action” means action under the law of a third country to manage the failure or likely failure of a third-country institution, third country parent undertaking or an EU institution—
the anticipated results of which are, in relation to a third-country institution or third-country parent undertaking or EU institution, broadly comparable to results which could have been anticipated from the exercise of a stabilisation option in relation to an entity in the United Kingdom corresponding to the institution or undertaking, and
the objectives of which are broadly comparable, in relation to the third country, to the objectives in section 4 as they apply in relation to the United Kingdom;
“third country” means a state other than an EEA state.]