The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020

Cases where mandatory write-down, conversion etc. applies: banking group companies

13.  In section 81AA (cases where mandatory write-down, conversion etc applies: banking group companies)—

(a) in subsection (1)—

(i) after “capital instruments” insert “and relevant internal liabilities”; and

(ii) for “and (8)” substitute “, (8) and (8A)”;

(b) in subsections (6)(a), (7)(a), and (8)(b), after “capital instruments”, insert “or relevant internal liabilities”;

(c) after subsection (8) insert—

“(8A) Case 4 is where—

(a) the banking group company is (or, but for the exercise of a stabilisation power, would be) a parent undertaking of a bank from which it has purchased (directly or indirectly) relevant capital instruments or relevant internal liabilities,

(b) the banking group company is not a resolution entity,

(c) the relevant capital instruments or relevant internal liabilities of the banking group company have been purchased (directly or indirectly) by a resolution entity in the same resolution group as the banking group company,

(d) any of the cases provided for in section 6A applies to the bank referred to in paragraph (a) above, and

(e) none of cases 1 to 3 in this section applies to the banking group company.”;

(d) in subsection (14) after the definition of “financial institution” insert—

““parent undertaking” has the meaning given in Article 4.1(15)(a) of the capital requirements regulation.”.