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

Interpretation

4.  In section 3 (interpretation: other expressions), in subsection (1)—

(a) in the definition of “Additional Tier 1 instruments” after “Chapter 2” insert “or 4”;

(b) after the definition of “Additional Tier 1 instruments” insert—

““bail-in liabilities”, of an undertaking, means liabilities and capital instruments that—

(a)

do not qualify as Common Equity Tier 1 instruments, Additional Tier 1 instruments or Tier 2 instruments, of the undertaking, and

(b)

are not excluded liabilities listed in section 48B(8),”;

(c) for the definition of “eligible liabilities” substitute—

““eligible liabilities” has the meaning given by section 3A(4A),”;

(d) in the definition of “the recovery and resolution directive”, at the end, insert “as last amended by Directive (EU) 2019/879 of the European Parliament and of the Council of 20th May 2019”;

(e) after the definition of “relevant capital instruments” insert—

““relevant internal liabilities” of a bank or banking group company means—

(a)

eligible liabilities, or

(b)

instruments used to meet any of the requirements set out in Article 92b of the capital requirements regulation,

in each case held by a resolution entity in the same resolution group as the bank or banking group company, either directly or indirectly (through other entities in the same resolution group that bought the liabilities or instruments from the bank or banking group company),

“resolution entity” means an entity which is identified by the Bank of England in a resolution plan or a group resolution plan under Part 5 of the Bank Recovery and Resolution (No.2) Order 2014 as an entity in respect of which—

(a)

the Bank of England might exercise a stabilisation power,

(b)

an EU resolution authority might take EU resolution action, or

(c)

a relevant third-country authority might take third-country resolution action,

and for the purposes of this definition, “EU resolution authority” has the meaning given by section 81AA(14), “relevant third-country authority” has the meaning given by section 81AA(14), “EU resolution action” has the meaning given to “resolution action” in Article 2.1(40) of the recovery and resolution directive and “third-country resolution action” has the meaning given by section 89H(7),

“resolution group” means a resolution entity together with any subsidiary that—

(a)

is not a resolution entity itself,

(b)

is not a subsidiary of another resolution entity, and

(c)

where the subsidiary is established in a third country, is stated by the group resolution plan under Part 5 of the Bank Recovery and Resolution (No.2) Order 2014 to be included in the resolution group,

and for the purpose of this definition “subsidiary” has the meaning given by Article 4.1(16) of the capital requirements regulation,;”;

(f) in the definition of “Tier 2 instruments” after “Chapter 2” insert “or 4”.