Authorisation of agreement for group financial supportU.K.
47.—(1) Article 83 (application and interpretation of Chapter 1 of Part 7) is amended as follows.
(2) In paragraph (1) in sub-paragraph (b) for “EEA” substitute “ UK ”.
(3) In paragraph (2)—
(a)omit the definition of “conditions for early intervention”;
(b)for the definition of “conditions for financial support” substitute—
““conditions for financial support” means the following conditions—
(a)there is a reasonable prospect that the financial support provided significantly redresses the financial difficulties of the group entity receiving the financial support;
(b)the provision of financial support has the objective of preserving or restoring the financial stability of the group as a whole or any of the entities of the group and is in the interests of the group entity providing the financial support;
(c)the financial support is provided on terms, including consideration, in accordance with Article 19.7 of the recovery and resolution directive;
(d)there is a reasonable prospect, on the basis of the information available to the management body of the group entity providing financial support at the time when the decision to grant financial support is taken, that the consideration for the support will be paid and, if the financial support is given in the form of a loan, that the loan will be reimbursed, by the group entity receiving the financial support;
(e)if the financial support is given in the form of a guarantee or any form of security and the guarantee or the security is enforced, the condition referred to in paragraph (d) shall apply to the liability arising for the recipient;
(f)the provision of the financial support would not jeopardise the liquidity or solvency of the group entity providing the financial support;
(g)the provision of the financial support would not create a threat to financial stability in the United Kingdom;
(h)the group entity providing the financial support complies, at the time the financial support is provided, with—
(i)the requirements relating to capital or liquidity imposed by or under legislation upon which the United Kingdom relied immediately before [F1IP completion day] to meet its obligations with respect to the capital requirements directive; and
(ii)the requirements imposed by or under legislation upon which the United Kingdom relied immediately before [F1IP completion day] to meet its obligations with respect to Article 104.2 of the capital requirements directive,
and the provision of the financial support shall not cause the group entity to infringe those requirements, unless the group entity is authorised by the appropriate regulator on an individual basis;
(i)the provision of the financial support would not undermine the resolvability of the group entity providing the financial support.”;
(c)in the definition of “group financial support agreement”, in paragraph (b), for the words from “other” to the end substitute “ , other than the United Kingdom, in which the relevant parent undertaking is set up ”;
(d)in the definition of “relevant parent undertaking” for “parent institution in an EEA State, an EEA” substitute “ UK ”.
(4) After paragraph (2) insert—
“(2A) The PRA and the FCA may each make technical standards relating to conditions (a), (c), (f) and (i) of the definition of “conditions for financial support” provided in paragraph (2) in so far as those conditions apply to a group financial support agreement submitted to it by a UK parent undertaking.”.
Textual Amendments
F1Words in Sch. 3 para. 47(3)(b) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 10(c)(ii)
Commencement Information
I1Sch. 3 para. 47 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(2)