Section 3: The assets-limit condition
37.This section sets out the assets-limit condition with which a bank or building society must comply in order to participate in the alternative scheme under section 2.
38.Subsection (1) defines smaller institutions as those that had total assets of less than £7 billion on the last day of the most recent financial year for which accounts have been prepared. The term “financial year” is defined in section 6. Once an institution’s annual accounts for a financial year show total assets in excess of £7 billion it is no longer eligible to participate in the alternative scheme.
39.Subsection (2) explains how the assets-limit condition is applied in relation to institutions which are members of a group (as defined by section 6).
40.Subsection (3) explains how the assets-limit condition is applied where the institution’s accounts are not reported in sterling (for example if it is a UK branch of a foreign bank).
41.Subsections (4) and (5) contain an order-making power to allow the Treasury to amend the assets limit.