SCHEDULE 3Amendments

PART 3Amendments of secondary legislation

Credit Institutions (Reorganisation and Winding up) Regulations 2004

10.

(1)

The Credit Institutions (Reorganisation and Winding up) Regulations 2004 M1 are amended as follows.

(2)

In regulation 2(1) (interpretation)—

(a)

in the appropriate place insert—

““recovery and resolution directive” means Directive 2014/59/EU of the European Parliament and of the Council of 15th May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms;”;

““stabilisation instrument” means any of the following—

  1. (a)

    a “mandatory reduction instrument” made under section 6B of the Banking Act 2009 M2;

  2. (b)

    a “resolution instrument” made under section 12A of the Banking Act 2009 M3;

  3. (c)

    a “share transfer instrument” as defined in section 15 of the Banking Act 2009;

  4. (d)

    a “share transfer order” as defined in section 16 of the Banking Act 2009;

  5. (e)

    a “property transfer instrument” as defined in section 33 of the Banking Act 2009 M4; or

  6. (f)

    a “third country instrument” made under section 89H of the Banking Act 2009 M5;”;

(b)

for the definition of “EEA regulator” substitute—

““EEA regulator” means—

  1. (a)

    a competent authority (within the meaning given by point (40) of Article 4(1) of the capital requirements regulation) established in an EEA State; or

  2. (b)

    the resolution authority (within the meaning given by point (18) of Article 2(1) of the recovery and resolution directive) established in an EEA State;”;

(c)

for the definition of “directive reorganisation measure” substitute—

““directive reorganisation measure” means a reorganisation measure as defined in Article 2 of the reorganisation and winding up directive which was adopted or imposed on or after the 5th May 2004, or any other measure to be given effect in or under the law of the United Kingdom pursuant to Article 66 of the recovery and resolution directive;”; and

(d)

for the definition of “the reorganisation and winding up directive” substitute—

““the reorganisation and winding up directive” means Directive 2001/24/EC of the European Parliament and of the Council of 4th April 2001 on the reorganisation and winding up of credit institutions M6 as amended by Article 117 of the recovery and resolution directive;”.

(3)

In regulation 3 (prohibition against winding up etc EEA credit institutions in the United Kingdom) after paragraph (7) insert—

“(7A)

A stabilisation instrument shall not be made in respect of an EEA credit institution.”.

(4)

In regulation 10 (notification to EEA regulators), in paragraph (3) after “it appears to” insert “ the Bank of England, ”.

(5)

In regulation 18 (disclosure of confidential information received from an EEA regulator)—

(a)

in paragraph (2) for “(3) and (4)” substitute “ (3), (4) and (5) ”;

(b)

in paragraph (4) omit “directive”; and

(c)

after paragraph (4) insert—

“(5)

The sections of the 2000 Act specified in paragraph (2) apply with the modifications set out in section 89L of the Banking Act 2009 M7 where that section applies.”.

(6)

In regulation 19 (application of Part 4), in paragraph (1)—

(a)

after sub-paragraph (c) delete “or”; and

(b)

after sub-paragraph (d) add—

“or

(e)

where a stabilisation instrument is made in respect of a UK credit institution.”.

(7)

In regulation 21 (interpretation of Part 4)—

(a)

in paragraph (1)(b) after “administration, winding up,” insert “ making of a stabilisation instrument ”;

(b)

after paragraph (2)(c) delete “and”; and

(c)

after paragraph (2)(d) add—

“and

(e)

in a case where a stabilisation instrument is made, the date on which that instrument is made,”.

(8)

In regulation 29 (regulated markets) for paragraph (2) substitute—

“(2)

For the purposes of this regulation “regulated market” has the meaning given by point (21) of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments M8.”.

(9)

For regulation 34 (netting agreements) substitute—

“Netting agreements34.

(1)

The effects of a relevant reorganisation or a relevant winding up on a netting agreement shall be determined in accordance with the law applicable to that agreement.

(2)

Nothing in paragraph (1) affects the application of—

(a)

section 48Z of the Banking Act 2009 M9;

(b)

section 70C of the Banking Act 2009 M10;

(c)

Articles 68 and 71 of the recovery and resolution directive or the law of any EEA State (other than the United Kingdom) transposing these provisions; or

(d)

any instrument made under the provisions referred to in sub-paragraph (a) or (b).”.

(10)

For regulation 35 (repurchase agreements) substitute—

“Repurchase agreements35.

(1)

Subject to regulation 33, the effects of a relevant reorganisation or a relevant winding up on a repurchase agreement shall be determined in accordance with the law applicable to that agreement.

(2)

Nothing in paragraph (1) affects the application of—

(a)

section 48Z of the Banking Act 2009 M11;

(b)

section 70C of the Banking Act 2009 M12;

(c)

Articles 68 and 71 of the recovery and resolution directive or the law of any EEA State (other than the United Kingdom) transposing these provisions; or

(d)

any instrument made under the provisions referred to in sub-paragraph (a) or (b).”.

(11)

In regulation 36 (interpretation of Part 5), in paragraph (1)(a)—

(a)

after paragraph (ii) delete “or”; and

(b)

at the end add—

“or

(iv)

the making of a stabilisation instrument.”.

(12)

In regulation 38 (disclosure of confidential information: third country credit institution)—

(a)

in paragraph (3), for “(4), (5) and (6)” substitute “ (4), (5), (6) and (8) ”;

(b)

in paragraph (6) omit “directive”; and

(c)

after paragraph (7), add—

“(8)

The sections of the 2000 Act specified in paragraph (3) apply with the additional modifications set out in section 89L of the Banking Act 2009 M13 where that section applies.”.

(13)

After regulation 38 (disclosure of confidential information: third country credit institution) insert—

“PART 6Application to Investment Firms

Interpretation of this Part39.

In this Part—

(a)

“EEA investment firm” means an investment firm as defined in point (2) of Article 4(1) of the capital requirements regulation whose head office is in an EEA State other than the United Kingdom; and

(b)

“UK investment firm” means an investment firm as defined in subsections (1) and (2)(a) of section 258A of the Banking Act 2009.

Application to UK investment firms40.

These Regulations apply to UK investment firms as if such firms were UK credit institutions, subject to the modifications set out in this Part.

Application to EEA investment firms41.

These Regulations apply to EEA investment firms as if such firms were EEA credit institutions, subject to the modifications set out in this Part.

Withdrawal of authorisation42.

Paragraph (3) of regulation 11 (withdrawal of authorisation) applies to UK investment firms as if the reference in that paragraph to section 55J of the 2000 Act M14 included a reference to any other power of the FCA or PRA under that Act to vary or cancel any permission of a body or firm.

Reorganisation measures and winding-up proceedings in respect of EEA investment firms effective in the United Kingdom43.

Regulation 5 (reorganisation measures and winding-up proceedings in respect of EEA credit institutions effective in the United Kingdom) applies to EEA investment firms as if, in paragraph (6), the phrase “relevant EEA State” meant the EEA State under the law of which the reorganisation is adopted or imposed, or the winding-up proceedings are opened, as the case may be.

PART 7Application to Group Companies

Interpretation of this Part44.

In this Part—

(a)

“EEA group company” means—

(i)

a financial institution as defined in point (26) of Article 4(1) of the capital requirements regulation,

(ii)

a parent undertaking as defined in point (15)(a) of Article 4(1) of the capital requirements regulation, or

(iii)

any other firm within the scope of Article 1(1) of the recovery and resolution directive,

the head office of which is in an EEA State other than the United Kingdom and which is not otherwise subject to these Regulations; and

(b)

“UK group company” means—

(i)

a financial institution as defined in point (26) of Article 4(1) of the capital requirements regulation that is authorised by the PRA or FCA,

(ii)

a parent undertaking as defined in Article 4(1)(15)(a) of the capital requirements regulation, or

(iii)

any other firm within the scope of Article 1(1) of the recovery and resolution directive,

the head office of which is in the United Kingdom and which is not otherwise subject to these Regulations.

Application to UK group companies45.

These Regulations apply to UK group companies with respect to which a stabilisation instrument has been made, as if they were UK credit institutions.

Application to EEA group companies46.

These Regulations apply to EEA group companies with respect to which one or more of the resolution tools or resolution powers provided for in the recovery and resolution directive have been applied, as if they were EEA credit institutions, subject to the modifications set out in this Part.

Reorganisation measures and winding-up proceedings in respect of EEA group companies effective in the United Kingdom47.

Regulation 5 (reorganisation measures and winding-up proceedings in respect of EEA group companies effective in the United Kingdom) applies to EEA group companies as if, in paragraph (6), the phrase “relevant EEA State” meant the EEA State under the law of which the reorganisation is adopted or imposed, or the winding-up proceedings are opened, as the case may be.

PART 8Application to Third Country Investment Firms

Interpretation of this Part48.

In this Part “third country investment firm” means an investment firm as defined in point (2) of Article 4(1) of the capital requirements regulation whose head office is not in an EEA State.

Application to third country investment firms49.

Part 5 of these Regulations applies to third country investment firms as if such firms were third country credit institutions (within the meaning given by regulation 36(1)(b) (interpretation of Part 5)).”.