SCHEDULE 3U.K.Amendments of the Bank Recovery and Resolution (No.2) Order 2014

Introductory provisionsU.K.

1.—(1) Article 2(1) (interpretation of Order) is amended as follows.

(2) Omit the definition of “another EEA State”.

(3) In the definition of “appropriate regulator” in paragraph (a) for “Article 111 of the capital requirements directive” substitute “ Part 6 of the Capital Requirements Regulations 2013 M1 ”.

(4) Omit the definition of “college”.

(5) For the definition of “competent authority” substitute—

““competent authority” means the supervisor of an authorised person under FSMA;”.

(6) After the definition of “competent authority” insert—

““conditions for early intervention” means where—

(a)an institution infringes the requirements of—

(i)the capital requirements regulation;

(ii)legislation upon which the United Kingdom relied immediately before [F1IP completion day] to meet its obligations with respect to the capital requirements directive;

(iii)legislation upon which the United Kingdom so relied to meet its obligations with respect to Title II of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments; or

(iv)any of Articles 3 to 7, 14 to 17 and 24 to 26 of Regulation (EU) No. 600/2014 of 15th May 2014 of the European Parliament and of the Council on Markets in Financial Instruments; or

(b)an institution is likely in the near future to infringe those requirements due, amongst other things, to—

(i)a rapidly deteriorating financial condition, including deteriorating liquidity situation;

(ii)increasing level of leverage;

(iii)non-performing loans; or

(iv)concentrations of exposures, as assessed on the basis of a set of triggers, which may include the institution's own funds requirement plus 1.5 percentage points.”.

(7) In the definition of “conditions for resolution”—

(a)in paragraph (b) after “Banking Act 2009;” omit “and”;

(b)omit paragraph (c).

(8) In the definition of “the consolidating supervisor” for “an EEA” in each case substitute “ a UK ”.

(9) After the definition of “consolidating supervisor” insert—

““core business lines” means business lines and associated services which represent material sources of revenue, profit or franchise value for an institution or for a group of which an institution forms part;

“credit institution” has the meaning given in section 48D(1) of the Banking Act 2009;”.

(10) In the definition of “critical functions”—

(a)in paragraph (a) omit “in relation to an undertaking set up in the United Kingdom,” and omit “and”;

(b)omit paragraph (b).

(11) After the definition of “critical functions” insert—

““deposit” has the meaning given in Article 2(1)(23A) of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15th May 2014 on markets in financial instruments and amending Regulation (EU) No. 648/2012;

“depositor” means the holder or, in the case of a joint account, each of the holders, of a deposit;”.

(12) Omit the definitions of “EBA”, “the EBA Regulation”, “EEA parent financial holding company”, “EEA parent institution”, “EEA parent mixed financial holding company” and “EEA parent undertaking”.

(13) In the definition of “eligible liabilities” —

(a)in paragraph (a) omit “in relation to an undertaking set up in the United Kingdom,”;

(b)omit paragraph (b) (together with the preceding “and”).

(14) After the definition of “eligible liabilities” insert—

““extraordinary public financial support” has the meaning given in section 3(1) of the Banking Act 2009;”.

(15) After the definition of “FSMA” insert—

““group” means a parent undertaking and its subsidiaries;”.

(16) In the definition of “group entity” for “EEA” substitute “ UK ”.

(17) After the definition of “insolvency proceedings” insert—

““institution” means a credit institution or an investment firm;

“instruments of ownership” means—

(a)shares,

(b)other instruments that confer ownership,

(c)instruments that are convertible into, or give the right to acquire, shares or other instruments of ownership, and

(d)instruments representing interests in shares or other instruments of ownership;

“investment firm” means an investment firm within the meaning of point (2) of Article 4.1 of the capital requirements regulation that is subject to the initial capital requirement laid down in Article 28.2 of the capital requirements directive;

“management body” has the meaning given in point (9) of Article 4.1 of the capital requirements regulation;”.

(18) Omit the following definitions—

(a)“parent financial holding company in an EEA State”,

(b)“parent institution in an EEA State” and

(c)“parent mixed financial holding company in an EEA State”.

(19) Omit the definition of “relevant competent authority”.

(20) In the definition of “relevant group” for “EEA” substitute “ UK ”.

(21) In the definition of “resolution objectives”—

(a)omit paragraph (a); and

(b)in paragraph (b) for “in relation to the United Kingdom, includes” substitute “ means ”.

(22) After the definition of “resolution plan” insert—

““resolution powers” means the powers of the Bank under Part 1 of the Banking Act 2009 other than those exercised in applying the resolution tools;”.

(23) In the definition of “resolution tools”—

(a)omit paragraph (a); and

(b)in paragraph (b) for the words from the start to “includes the” substitute “ means ”.

(24) After the definition of “resolution tools” insert—

““shareholders” means shareholders or holders of other instruments of ownership.”.

(25) In the definition of “third country”—

(a)for “State” substitute “ country or territory ”;

(b)for “an EEA State; and” substitute “ the United Kingdom; ”.

(26) At the end of the paragraph add—

““UK parent financial holding company” has the meaning given in point (30) of Article 4.1 of the capital requirements regulation;

“UK parent institution” has the meaning given in point (28) of Article 4.1 of the capital requirements regulation;

“UK parent mixed financial holding company” has the meaning given in point (32) of Article 4.1 of the capital requirements regulation;

“UK parent undertaking” means a UK parent institution, UK parent financial holding company or UK parent mixed financial holding company;”.

(27) Omit article 2(2).

(28) In article 2(3)—

(a)in the opening words for “State” substitute “ country or territory ”;

(b)for sub-paragraph (a) substitute—

“(a)the country or territory (as the case may be) in which the entity is authorised by an authority which, in the country or territory concerned, exercises any function equivalent to a function of the appropriate regulator; or”;

(c)in sub-paragraph (b) for “State”, in both cases substitute “ country or territory ”.

(29) After article 2(3) insert—

“(4) In this Order any reference to an EU regulation within the meaning of the European Union (Withdrawal) Act 2018 is to be read as a reference to the instrument as it [F2forms part of retained EU law].”.

Textual Amendments

Commencement Information

I1Sch. 3 para. 1(29) in force at 21.12.2018 and Sch. 3 para. 1 in force otherwise at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(2)(3)(d)

Marginal Citations