Specified conditions3

1

The following conditions are specified for the purposes of section 81D(1) of the Banking Act 2009.

2

Subject to paragraphs (3) and (4), the undertaking must be—

a

a subsidiary of the bank;

b

a parent of the bank; or

c

a group subsidiary.

3

Where the bank is a subsidiary of a mixed activity holding company (“the MAHC”) and of a financial holding company which is also a subsidiary of the MAHC—

a

the MAHC is not a parent for the purposes of paragraph (2)(b); and

b

a group subsidiary which is a subsidiary of the MAHC is not a group subsidiary for the purposes of paragraph (2)(c) unless it is—

i

a financial institution; or

ii

a subsidiary of a financial institution which is also a subsidiary of the MAHC.

4

If the undertaking is a covered bond vehicle or a securitisation company, it must be—

a

an investment firm M1; or

b

a financial institution.

5

A company which is a warehouse company within the meaning given by section 83(6) of the Finance Act 2005 or regulation 8 of the Taxation of Securitisation Companies Regulations 2006 is not a securitisation company for the purposes of paragraph (4) unless its business is carried on for the purposes of an existing asset-holding or note-issuing company.

6

In this article “group subsidiary” means a subsidiary of a parent of the bank which is not a parent or subsidiary of the bank.