The Bank Recovery and Resolution (No. 2) Order 2014

CHAPTER 4 U.K. Group resolution involving a group subsidiary where the PRA or FCA is the consolidating supervisor

Application and interpretation of Chapter 4 U.K.

199.—(1) This Chapter applies where, in relation to a relevant group—

(a) the PRA or FCA is the consolidating supervisor; and

(b) the Bank gives a relevant notice or receives a relevant notice from another resolution authority.

(2) In this Chapter—

“the failing subsidiary” means the group subsidiary named in a relevant notice;

“relevant assessment”, in relation to notified measures, means an assessment of the impact that the measures would have on other group entities, including an assessment of whether the measures would make it likely that a group entity set up in an EEA State other than the State in which the failing subsidiary is set up would meet the conditions for resolution; and

“relevant notice” means a notice which—

(a)

communicates to the members of the college a decision that a group subsidiary meets the conditions for resolution; and

(b)

proposes measures for taking resolution action or insolvency proceedings in respect of that subsidiary (“notified measures”).

Assessment of impact of notified measures U.K.

200.—(1) The Bank must make a relevant assessment of the notified measures in consultation with the other members of the college.

(2) Where the Bank has given a relevant notice and the relevant assessment is that the notified measures would not make it likely that another group entity would meet the conditions for resolution, the Bank may take the notified measures.

(3) Where the result of the relevant assessment is that the notified measures would make it likely that another group entity would meet the conditions for resolution, the Bank must make a proposal for a group resolution scheme.

(4) In paragraphs (2) and (3) the reference to another group entity is a reference to a group entity set up in an EEA State other than the State in which the failing subsidiary is set up.

(5) The Bank must make a proposal under paragraph (3) within—

(a) 24 hours beginning with the time at which it gives or receives the relevant notice; or

(b) where the Bank has not given the relevant notice, such longer period as the resolution authority for the failing subsidiary may allow for making the relevant assessment.

Joint decision on adoption of group resolution scheme U.K.

201.—(1) The Bank must endeavour to reach a joint decision on the adoption of a group resolution scheme with the other resolution authorities which are members of the college.

(2) Where the Bank and another resolution authority (“authority A”) are unable to reach a joint decision on the adoption of a group resolution scheme, the Bank must—

(a) decide the contents and details of a group resolution scheme for part of the relevant group, which it may do either alone or jointly with any resolution authority with which it is able to reach a joint decision; and

(b) ensure that—

(i) the decision on the contents and details of the scheme takes account of views and reservations of authority A; and

(ii) every group entity for which authority A is the resolution authority is excluded from the scope of the scheme.

(3) Where another resolution authority (apart from authority A) notifies the Bank that it does not wish to adopt a group resolution scheme for part of the relevant group, the Bank must ensure that every group entity for which that authority is the resolution authority is excluded from the scope of the group resolution scheme.

Requesting the assistance of EBA U.K.

202.  The Bank may ask EBA to assist the resolution authorities in accordance with Article 31(c) of the EBA Regulation to reach a joint decision on the adoption of a group resolution scheme for the relevant group.