The Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Deferment of Provisions in Resolution Instruments) Regulations 2023

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations concern certain instruments (“resolution instruments”) issued by the Bank of England (“the Bank”) when a central counterparty is failing or likely to fail (under the special resolution regime set out in Schedule 11 to the Financial Services and Markets Act 2023 (c. 29) (“the 2023 Act”) (central counterparties)). “Resolution instruments” are defined in paragraph 79 of that Schedule (resolution instruments: effect and supplementary matters) and are the means by which some of the Bank’s powers under the special resolution regime are exercised. These Regulations make provision for and in connection with the suspension or waiver of provisions made under resolution instruments.

Regulation 2 makes provision for the suspension by the Bank of provisions made in a resolution instrument, including specifying a maximum period for such a suspension. Regulation 3 makes provision for the Bank to waive the application of provisions made in a resolution instrument. Regulation 4 sets out the matters to which the Bank must have regard when making a decision to suspend, or to suspend for a further period, a provision, to waive a provision or to end the suspension of a provision.

Regulation 5 requires the Bank to consult the Treasury before making a decision to suspend a provision, to waive a provision, to suspend a provision for a further period of time where less than three months remain until the expiry of the maximum period for which that provision can be suspended (in accordance with regulation 2) or to take no further action in respect of such provision.

Regulation 6 sets out the requirements for the Bank to notify the persons to whom a provision in a resolution instrument applies of any decision to suspend, suspend for a further period of time or waive that provision in respect of them.

Regulation 7 sets out the requirements for the Bank to review any decision to suspend, or suspend for a further period of time, a provision in a resolution instrument in accordance with three-month review periods. Regulation 8 requires the Bank to notify the person in respect of whom a provision has been suspended (or has previously been suspended) if the Bank makes a decision to enforce that provision.

Regulation 9 provides that the procedural requirements under paragraph 151 of Schedule 11 to the 2023 Act (giving of notices, documents etc) apply where the Bank is giving notices under these Regulations.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen. A de minimis impact assessment is available from HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.