Table of Contents
Bank Recovery and Resolution (No. 2) Order 2014 [SI 2014 No. 3348]Introductory TextPart 1 Introductory provisions (arts. 1-3)Article 1 Citation and commencementArticle 2 InterpretationArticle 3 Application of OrderPart 2 Designation of authorities and competent ministry (arts. 4-6)Article 4 Designation of the Bank as resolution authorityArticle 5 Designation for the purposes of Article 59 of the recovery and resolution directiveArticle 6 Designation of the Treasury as the ministry responsible for exercising the functions of the competent ministryPart 3 Recovery and resolution planning (arts. 7-10)Article 7 Recovery planning: preparatory steps and simplified obligationsArticle 8 Resolution planning: preparatory steps and simplified obligationsArticle 9 Consultation with the Financial Policy CommitteeArticle 10 Provision of information to EBAPart 4 Recovery plans (arts. 11-35)Chapter 1 Assessment of recovery plan drawn up by an institution (arts. 11-15)Article 11 Application and interpretation of Chapter 1Article 12 Assessment of planArticle 13 Criteria for assessmentArticle 14 Revision of planArticle 15 Business changes and relevant measuresChapter 2 Assessment of group recovery plan where the PRA or FCA is the consolidating supervisor (arts. 16-26)Article 16 Application and interpretation of Chapter 2Article 17 Duty to transmit a copy of group recovery planArticle 18 Assessment of group recovery planArticle 19 Purpose of assessmentArticle 20 Timing of assessment of planArticle 21 Joint assessment of planArticle 22 Revision of planArticle 23 Business changes and relevant measuresArticle 24 Recovery plan for group institutionArticle 25 References to EBAArticle 26 Requesting the assistance of EBAChapter 3 Assessment of group recovery plan where neither the PRA nor the FCA is the consolidating supervisor (arts. 27-32)Article 27 Application and interpretation of Chapter 3Article 28 Purpose of assessmentArticle 29 Joint assessment of planArticle 30 Assessment of recovery plans drawn up on an individual basisArticle 31 References to EBAArticle 32 Requesting the assistance of EBAChapter 4 Review of recovery plans and group recovery plans (arts. 33-35)Article 33 Review of recovery planArticle 34 Review of group recovery plan assessed under Chapter 2Article 35 Review of group recovery plan assessed under Chapter 3Part 5 Resolution plans (arts. 36-58)Chapter 1 Resolution plans for institutions (arts. 36-38)Article 36 Interpretation of Chapter 1Article 37 The Bank's duty to draw up resolution plansArticle 38 Duty to transmit a copy of the resolution planChapter 2 Group resolution plan where the PRA or FCA is the consolidating supervisor (arts. 39-45)Article 39 Application of Chapter 2Article 40 The Bank's duty to draw up group resolution plansArticle 41 Information to be transmitted for the purpose of drawing up group resolution plansArticle 42 Joint decision on adoption of group resolution planArticle 43 References to EBAArticle 44 Requesting the assistance of EBAArticle 45 Duty to transmit a copy of the group resolution planChapter 3 Group resolution plan where neither the PRA nor the FCA is the consolidating supervisor (arts. 46-52)Article 46 Application and interpretation of Chapter 3Article 47 Joint decision on adoption of group resolution planArticle 48 Failure to reach joint decision: disagreement by the Bank with a joint proposalArticle 49 Failure to reach joint decision: agreement by the Bank with a joint proposalArticle 50 Resolution plan for group entityArticle 51 References to EBAArticle 52 Requesting the assistance of EBAChapter 4 Review of resolution plans and group resolution plans (arts. 53-55)Article 53 Review of resolution planArticle 54 Review of group resolution plan drawn up by the BankArticle 55 Review of group resolution plan drawn up by another resolution authorityChapter 5 Information and records for resolution planning (arts. 56-58)Article 56 Information required for resolution planningArticle 57 Notice of matters which could necessitate an amendment of a planArticle 58 Records of financial contractsPart 6 Assessment of resolvability and removal of impediments to resolvability (arts. 59-82)Chapter 1 Assessment of resolvability of institutions (arts. 59-60)Article 59 Application and interpretation of Chapter 1Article 60 Assessment of resolvabilityChapter 2 Assessment of resolvability of groups (arts. 61-63)Article 61 Application and interpretation of Chapter 2Article 62 Assessment of group resolvability where the PRA or FCA is the consolidating supervisorArticle 63 Assessment of group resolvability where neither the PRA nor the FCA is the consolidating supervisorChapter 3 Removal of impediments to resolvability of institutions (arts. 64-67)Article 64 Application and interpretation of Chapter 3Article 65 Notice of determinationArticle 66 Effect of notice of determinationArticle 67 Right of appealChapter 4 Removal of impediments to resolvability of group entities where the PRA or FCA is the consolidating supervisor (arts. 68-74)Article 68 Application and interpretation of Chapter 4Article 69 Report on substantive impediments to the resolvability of group entitiesArticle 70 Suspension of requirement to draw up or review group resolution planArticle 71 Determining remedial measuresArticle 72 Joint decision on impediments to group resolvability and remedial measuresArticle 73 References to EBAArticle 74 Requesting the assistance of EBAChapter 5 Removal of impediments to resolvability of groups where neither the PRA nor the FCA is the consolidating supervisor (arts. 75-82)Article 75 Application and interpretation of Chapter 5Article 75A Report on substantive impediments to the resolvability of group entitiesArticle 76 Suspension of requirement to draw up or review group resolution planArticle 77 Determining remedial measuresArticle 78 Joint decision on impediments to group resolvability and remedial measuresArticle 79 Failure to reach joint decision: disagreement by the Bank with joint proposalsArticle 80 Failure to reach joint decision: agreement by the Bank with joint proposalsArticle 81 References to EBAArticle 82 Requesting the assistance of EBAPart 7 Intra-group financial support (arts. 83-106)Chapter 1 Authorisation of agreement for group financial support where the PRA or FCA is the consolidating supervisor (arts. 83-90)Article 83 Application and interpretation of Chapter 1Article 84 Review of group financial support agreement and decision on authorisationArticle 85 Duty to transmit a copy of applicationArticle 86 Joint decision with other competent authoritiesArticle 87 References to EBAArticle 88 Requesting the assistance of EBAArticle 89 Duty to transmit a copy of authorised agreementArticle 90 Amendment of authorised agreementChapter 2 Authorisation of agreement for group financial support where neither the PRA nor the FCA is the consolidating supervisor (arts. 91-96)Article 91 Application and interpretation of Chapter 2Article 92 Review of group financial support agreement and decision on authorisationArticle 93 Joint decision with other competent authoritiesArticle 94 References to EBAArticle 95 Requesting the assistance of EBAArticle 96 Amendment of authorised agreementChapter 3 Approval of authorised agreements by the members of a UK group entity (arts. 97-100)Article 97 Interpretation of Chapter 3Article 98 Requirement for approval of authorised agreementArticle 98A Publication of information concerning group financial support agreementsArticle 99 Revocation of authorised agreementArticle 100 Obligation to provide annual reportChapter 4 Provision of group financial support (arts. 101-106)Article 101 Interpretation of Chapter 4Article 102 Relevant notice from UK group entity: decision by the PRA or FCAArticle 103 Duties of consolidating supervisor where financial support agreed, prohibited or restrictedArticle 104 Re-assessment of recovery plans by the PRA or FCA where it is not the consolidating supervisorArticle 105 Requesting the assistance of EBAArticle 106 Reciprocal supportPart 8 Early intervention (arts. 107-120)Chapter 1 Early intervention with respect to an institution (arts. 107-109)Article 107 Interpretation of Chapter 1Article 108 Notice that institution meets the conditions for early interventionArticle 109 Deadline for compliance with measure for early interventionChapter 2 Early intervention with respect to groups where the PRA or FCA is the consolidating supervisor (arts. 110-115)Article 110 Application and interpretation of Chapter 2Article 111 Procedure for early intervention in respect of a UK group entityArticle 112 Procedure for early intervention in respect of a non-UK group entityArticle 113 Joint decisions about early interventionArticle 114 References to EBAArticle 115 Requesting the assistance of EBAChapter 3 Early intervention with respect to groups where neither the PRA nor the FCA is the consolidating supervisor (arts. 116-120)Article 116 Application and interpretation of Chapter 3Article 117 Procedure for early intervention in respect of a UK group entityArticle 118 Joint decisions about early interventionArticle 119 References to EBAArticle 120 Requesting the assistance of EBAPart 9 Minimum requirement for own funds and eligible liabilities (arts. 121-148)Chapter 1 Determination of minimum requirement for an institution (arts. 121-124)Article 121 Interpretation of Chapter 1Article 122 Duties of the Bank in relation to minimum requirementArticle 123 Determination of minimum requirementArticle 124 Review of minimum requirementChapter 2 Determination of minimum consolidated requirement where the PRA or FCA is the consolidating supervisor (arts. 125-129)Article 125 Application and interpretation of Chapter 2Article 126 Determination of minimum consolidated requirementArticle 127 Joint determinationArticle 128 References to EBA: determination of minimum consolidated requirementArticle 129 Review of minimum consolidated requirementChapter 3 Determination of minimum consolidated requirement where neither the PRA nor the FCA is the consolidating supervisor (arts. 130-132)Article 130 Application and interpretation of Chapter 3Article 131 Joint determination of minimum consolidated requirementArticle 132 Review of minimum consolidated requirementChapter 4 Determination of minimum requirements for group institutions where the PRA or FCA is the consolidating supervisor (arts. 133-139)Article 133 Application and interpretation of Chapter 4Article 134 Duties of the Bank in relation to minimum requirementArticle 135 Determination of minimum requirementArticle 136 Joint determination of minimum requirementsArticle 137 References to EBA: determination of minimum requirementArticle 138 Review of minimum requirementsArticle 139 Minimum requirement for other group entities set up in the United KingdomChapter 5 Determination of minimum requirements for group institutions where neither the PRA nor the FCA is the consolidating supervisor (arts. 140-146)Article 140 Application and interpretation of Chapter 5Article 141 Duties of the Bank in relation to minimum requirementArticle 142 Determination of minimum requirementArticle 143 Joint determination of minimum requirementsArticle 144 References to EBA: determination of minimum requirementArticle 145 Review of minimum requirementsArticle 146 Minimum requirement for other group entities set up in the United KingdomChapter 6 Minimum requirement for own funds and eligible liabilities: other provisions (arts. 147-148)Article 147 Waiver of application of Chapter 4Article 148 Meeting minimum requirement through contractual bail-in instruments etcPart 10 Requirement to write down or convert capital instruments (arts. 149-153)Article 149 Application and interpretation of PartArticle 150 Determinations under section 6A and 81AA of the Banking Act 2009: preliminary steps for UK group entitiesArticle 151 Regulator to take alternative measuresArticle 152 Determination that Case 2, 3, 4 or 5 is satisfiedArticle 153 Joint determination under Article 59(3)(c) of the recovery and resolution directive in relation to a non-UK group entityPart 11 Removal of procedural impediments to application of bail-in tool (arts. 154-156)Article 154 Interpretation of PartArticle 155 Requirement to increase or remove limit on share capitalArticle 156 Removal of impediments to the conversion of liabilities into sharesPart 11A Contractual recognition of bail-in (art. 156A)Article 156A Contractual recognition of bail-in: technical standardsPart 12 Treatment of derivative contracts where bail-in option is applied (arts. 157-158)Article 157 Application and interpretation of PartArticle 158 Liabilities arising from derivative contractsPart 13 Preparation of business reorganisation plans after application of bail-in tool (arts. 159-180)Chapter 1 Assessment of business reorganisation plan drawn up by an institution (arts. 159-162)Article 159 Application and interpretation of Chapter 1Article 160 Assessment of business reorganisation planArticle 161 Purpose of assessmentArticle 162 Revision of planChapter 2 Assessment of business reorganisation plan drawn up by a single group entity (arts. 163-164)Article 163 Application and interpretation of Chapter 2Article 164 Assessment etc of business reorganisation planChapter 3 Assessment of business reorganisation plan drawn up for relevant group where the PRA or FCA is the consolidating supervisor (arts. 165-174)Article 165 Application and interpretation of Chapter 3Article 166 Duty to transmit a copy of business reorganisation planArticle 167 Assessment of business reorganisation planArticle 168 Purpose of assessmentArticle 169 Assessment of plan where every group entity is set up in the United KingdomArticle 170 Joint assessment of planArticle 171 Revision of planArticle 172 Assessment of business reorganisation plans drawn up on an individual basisArticle 173 References to EBAArticle 174 Requesting the assistance of EBAChapter 4 Assessment of business reorganisation plan drawn up for relevant group where neither the PRA nor the FCA is the consolidating supervisor (arts. 175-180)Article 175 Application and interpretation of Chapter 4Article 176 Purpose of assessmentArticle 177 Joint assessment of planArticle 178 Assessment of business reorganisation plans drawn up on an individual basisArticle 179 References to EBAArticle 180 Requesting the assistance of EBAPart 14 Procedural obligations where an undertaking is failing or likely to fail (arts. 181-184A)Article 181 Interpretation of PartArticle 182 Matters to be notified by the regulator to the BankArticle 183 Notification that an undertaking is failing or likely to failArticle 184 Duty to send copy of share transfer instrument etc to members and creditors of institutionArticle 184A Notifications under articles 182, 183 and 184Part 15 Applications to the court in relation to resolution action (arts. 185-186)Article 185 Stay of legal proceedingsArticle 186 Remedies on judicial reviewPart 16 Cross-border group resolution (arts. 187-215)Chapter 1 General provisions (arts. 187-189)Article 187 Principles for reaching decisions which may have an impact in two or more EEA StatesArticle 188 Information exchangeArticle 189 Requirements for group resolution schemesChapter 2 Resolution colleges (arts. 190-194)Article 190 Application of Chapter 2Article 191 Duty to establish a resolution collegeArticle 192 Membership of resolution collegeArticle 193 Functioning of resolution collegeArticle 194 Use of an existing resolution collegeChapter 3 European resolution colleges (arts. 195-198)Article 195 Application of Chapter 3Article 196 Establishment and functioning of a European resolution collegeArticle 197 Recognition of third-country resolution actionArticle 198 Use of an existing resolution collegeChapter 4 Group resolution involving a group subsidiary where the PRA or FCA is the consolidating supervisor (arts. 199-202)Article 199 Application and interpretation of Chapter 4Article 200 Assessment of impact of notified measuresArticle 201 Joint decision on adoption of group resolution schemeArticle 202 Requesting the assistance of EBAChapter 5 Group resolution involving a group subsidiary where neither the PRA nor the FCA is the consolidating supervisor (arts. 203-207)Article 203 Application Chapter 5Article 204 Bank decision that group subsidiary meets the conditions for resolutionArticle 205 Joint decision on adoption of group resolution schemeArticle 206 Failure to reach joint decision: disagreement by the Bank with joint proposalsArticle 207 Requesting the assistance of EBAChapter 6 Group resolution where EEA parent undertaking is set up in the United Kingdom (arts. 208-211)Article 208 Application and interpretation of Chapter 6Article 209 Bank decision that EEA parent undertaking meets the conditions for resolutionArticle 210 Joint decision on adoption of group resolution schemeArticle 211 Requesting the assistance of EBAChapter 7 Group resolution where EEA parent undertaking is set up in another EEA State (arts. 212-215)Article 212 Application of Chapter 7Article 213 Joint decision on adoption of group resolution schemeArticle 214 Failure to reach joint decision: disagreement by the Bank with joint proposalsArticle 215 Requesting the assistance of EBAPart 17 Modified application of company law to banks etc in resolution (arts. 216-220A)Article 216 Interpretation of PartArticle 217 Shadow directorshipArticle 218 Modified application of legislation on cross-border mergersArticle 219 Modified application of the Companies Act 2006 (disapplication of Takeover Rules)Article 220 Modified application of the Companies Act 2006 (disapplication of other requirements)Article 220A Modified application of the Companies Act 2006 (shareholders' rights)Part 18 Treasury support for investment firms (art. 221)Article 221 Investment firms to be treated as financial institutionsPart 19 Miscellaneous provisions (arts. 222-225)Article 222 ContinuityArticle 223 Duty to co-operateArticle 224 Non-binding co-operation arrangements in line with EBA framework arrangementsArticle 225 Duty to inform EBA of imposition of penaltiesPart 20 Amendments (art. 226)Article 226 Amendments of primary and secondary legislationPart 21 Review (art. 227)Article 227 ReviewSchedule A1 Information to be contained in a recovery plan or group recovery planSchedule 1 Information to be contained in a resolution planSchedule 2 Information to be contained in a group resolution planSchedule 2A Additional information which may be required for the purposes of a resolution plan or group resolution planSchedule 2B Matters that the Bank is to consider when assessing resolvabilitySchedule 3 AmendmentsSchedule 3, Part 1 Amendments of FSMA (paras. 1-5)Schedule 3, Part 2 Amendments of other primary legislation (para. 6)Schedule 3, Part 3 Amendments of secondary legislation (paras. 7-13)Schedule 4 Modified application of the Companies Act 2006 to banks etc in resolutionSchedule 4, Part 1 Provisions concerning the exercise of certain rights of shareholders in listed companies (paras. 1-23)Schedule 4, Part 2 Provisions concerning mergers and divisions of public limited liability companies (para. 24)Schedule 4, Part 3 Provisions concerning the maintenance and alteration of a company's share capital (paras. 25-36)SignatureExplanatory NoteExplanatory MemorandumTransposition Note
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Schedule 3, Part 1 Amendments of FSMA (paras. 1-5)
Amendments of FSMA
1. FSMA is amended as follows.
Recovery plans
(1) Section 137J [Section 137J was substituted by the Financial Services Act 2012, section 24(1).] (rules about recovery plans: duty to consult) is amended as follows.
(2) In subsection (1) for "each", in both places where it appears, substitute "a".
(3) For subsections (2) to (5) substitute -
"(2) "Relevant person" means -
(a) an institution authorised in the UK; or
(b) a qualifying parent undertaking within the meaning given by section 192B [Section 192B was inserted by the Financial Services Act 2012, section 27. For Condition C (a parent undertaking must be a financial institution of a prescribed kind (section 192B(4)) see S.I. 2013/165.].
(3) A "recovery plan" is a document which provides for measures to be taken -
(a) by an institution authorised in the UK which is not part of a group, following a significant deterioration of the financial position of the institution, in order to restore its financial position; or