(This note is not part of the Order)

This Order is one of the instruments which implements 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 No. L 173, 12.6.2014, p. 190) ("the Directive"). The Directive requires EEA States to have powers to manage the failure of credit institutions, investment firms and companies in the same group as a credit institution or investment firm as an alternative to insolvency.

This Order lays down procedural and other requirements with respect to planning and taking measures for the purpose of -

- restoring the financial position of credit institutions and investment firms and prescribed kinds of parent and subsidiary companies; and

- achieving one or more resolution objectives, which include protecting and enhancing the stability of the financial and banking system, ensuring the continuation of critical functions and protecting depositors and public funds.

In the United Kingdom a credit institution is a bank or a building society and an investment firm is a body of the kind described in section 258A of the Banking Act 2009 (c. 1) ("the Act"). In the Directive credit institutions and investment firms are called "institutions". The Directive applies to institutions and group companies throughout the EEA.

The Directive sets out the measures that may be taken for these purposes ("resolution tools" and "resolution powers"). In the United Kingdom they include -