(This note is not part of the Regulations)

These Regulations are made under the Banking Act 2009 (c. 1) ("the Act"), as amended by the Financial Services (Banking Reform) Act 2013 (c. 33) (which introduced a new stabilisation power, the power to make special bail-in provision). They also implement, in part, Directive 2014/59/EU of the European Parliament and of the Council of 15th May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms (OJ L173, 12.6.2014, p.190) ("the recovery and resolution directive").

The Regulations specify provisions which must, or may, be included in a compensation order made under the Act following the exercise of the power to make special-bail in provision in respect of banks, banking group companies, investment firms, or - with modifications - building societies. The nature of the compensation order will depend on the way in which special bail-in provision is made: when made under the bail-in stabilisation option of section 12A of the Act, this will be a bail-in compensation order; when made in conjunction with a sale to a commercial purchaser under section 11(2), the bridge bank stabilisation option of section 12 of the Act or the asset management vehicle stabilisation option under section 12ZA of the Act, this will be a third party compensation order, which regulation 4 requires to be included in the resolution fund order (a "relevant compensation order").