C1C2Part 1Special Resolution Regime

Annotations:
Modifications etc. (not altering text)

F1Chapter 6Third-country resolution actions

Annotations:
Amendments (Textual)

Third-country resolution actions

89HRecognition of third-country resolution actions

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.

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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 F2...;

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 F3the United Kingdom would not, by reason of being located or payable in the F4United Kingdom, receive the same treatment as creditors (including depositors) who are located or payable in the F5... 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) F6....

5

The recognition of third-country resolution action (or any part of it) is without prejudice to any normal insolvency proceedings.

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7

In this section—

  • F8...

  • “group” has the meaning given by section 474 of the Companies Act 2006,

  • F8...

  • “third-country group company” means an undertaking—

    1. a

      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

    2. b

      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),

  • F9“third-country institution” means an institution established in a country or territory other than the United Kingdom that would, if it were established within the United Kingdom, be regarded as a bank, building society, credit union or investment firm;

  • “third-country parent undertaking” F10means a parent undertaking, parent financial holding company or a parent mixed financial holding company established in a country or territory outside the United Kingdom;

  • “third-country resolution action” means action under the F11law of a country or territory outside the United Kingdom to manage the failure or likely failure of a third-country institution, third country parent undertaking or F11a bank, building society, credit union or investment firm—

    1. a

      the anticipated results of which are, in relation to a third-country institution or third-country parent undertaking or F12a bank, building society, credit union or investment firm, 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

    2. b

      the objectives of which are broadly comparable, in relation to the F13country or territory concerned, to the objectives in section 4 as they apply in relation to the United Kingdom;

  • F14...