(1) In a case where this section applies, the Bank of England must without delay make -

(a) an instrument in relation to the bank containing the mandatory reduction provision, or

(b) two or more instruments which (taken together) contain that provision.

An instrument made under this subsection is a "mandatory reduction instrument".

(2) "The mandatory reduction provision" is provision which produces the following results -

(a) existing Common Equity Tier 1 instruments of the bank are cancelled, transferred or diluted in accordance with the principle that losses should be borne first by the holders of such instruments,

(b) the principal amount of Additional Tier 1 instruments of the bank is reduced or such instruments are converted (directly or indirectly) into Common Equity Tier 1 instruments (or both) -

(i) to the extent required to achieve the special resolution objectives set out in section 4, or

(ii) to the extent of the capacity of the relevant capital instruments, whichever is lower;