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PART 5U.K.Resolution plans

CHAPTER 1U.K.Resolution plans for institutions

Interpretation of Chapter 1U.K.

36.  In this Chapter “relevant institution” means an institution which is authorised by the PRA or FCA and is not part of a group subject to supervision on a consolidated basis in accordance with [F1the capital requirements regulation and CRR rules].

Textual Amendments

The Bank's duty to draw up resolution plansU.K.

37.—(1) The Bank must draw up and adopt a resolution plan for each relevant institution.

(2) Subject to the imposition of any simplified obligations (within the meaning given by article 9(3)(b)) with respect to a resolution plan, the plan must[F2—

(a) contain the information, and be drawn up with regard to the considerations, set out in Schedule 1; and

(b)contain information specified in any technical standards made under paragraph (2A).]

[F3(2A) The Bank may make technical standards relating to information to be contained in the resolution plan for a relevant institution.]

(3) The resolution plan must be drawn up on the basis of the information provided for that purpose by the relevant institution or the appropriate regulator and any other relevant information.

[F4(3A) The Bank may make technical standards relating to—

(a)the procedures for the provision of information by the relevant institution or the appropriate regulator under paragraph (3); and

(b)a minimum set of standard forms and templates for such provision of information.]

(4) For the purpose of drawing up a resolution plan the Bank must consult—

(a)the appropriate regulator; F5...

F6(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The Bank must provide the relevant institution with a summary of the key elements of the resolution plan.

Textual Amendments

Duty to transmit a copy of the resolution planU.K.

38.  The Bank must send a copy of the resolution plan adopted for a relevant institution to the appropriate regulator.

CHAPTER 2U.K.Group resolution plan where the PRA or FCA is the consolidating supervisor

Application of Chapter 2U.K.

39.  This Chapter applies where the PRA or FCA is the consolidating supervisor in relation to a relevant group.

The Bank's duty to draw up group resolution plansU.K.

40.—(1) F7... The Bank must draw up and adopt a group resolution plan, and is solely responsible for the plan.

F8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Subject to the imposition of any simplified obligations (within the meaning given by article 9(3)(b)) with respect to a group resolution plan, the plan must[F9—

(a)contain the information, and be drawn up with regard to the considerations, set out in Schedule 2; and

(b)contain information specified in any technical standards made under paragraph (3A).]

[F10(3A) Taking into account the diversity of business models of groups in the United Kingdom, the Bank may make technical standards relating to information to be contained in the group resolution plan.]

(4) The resolution plan must be drawn up on the basis of—

(a)the information provided for that purpose by a group entity set up in the United Kingdom or by the appropriate regulator; and

(b)any other relevant information.

[F11(4A) The Bank may make technical standards relating to—

(a)the procedures for the provision of information under paragraph (4)(a); and

(b)a minimum set of standard forms and templates for such provision of information.]

(5) For the purpose of drawing up a group resolution plan, the Bank must consult—

(a)the appropriate regulator;

F12(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) A group resolution plan must not have a disproportionate impact on [F13the United Kingdom].

[F14(6A) In a relevant group, where a mixed-activity holding company has at least one subsidiary which is—

(a)an institution; and

(b)a subsidiary of a financial holding company,

the group resolution plan shall provide that the financial holding company is identified as a resolution entity. “Institution” in this subsection has the same meaning as in the capital requirements regulation.]

(7) For the purpose of drawing up a group resolution plan, so far as the plan is relevant to—

(a)a subsidiary within the relevant group which is set up in a third country, or

(b)an institution within the relevant group which has a significant branch in a third country,

the Bank may consult the authorities which, in the country concerned, exercise any function equivalent to a function of [F15the Bank under Part 1 of the Banking Act 2009 or the PRA or the FCA under FSMA].

[F16(8) In paragraph (7)—

“branch” has the meaning given in point (17) of Article 4.1 of the capital requirements regulation; and

“significant branch” shall be construed with regard, in particular, to the following—

(a)

whether the market share of the branch in terms of deposits exceeds 2% in the third country;

(b)

the likely impact of a suspension or closure of the operations of the institution on systemic liquidity and the payment, clearing and settlement systems in the third country;

(c)

the size and importance of the branch in terms of number of clients within the context of the banking or financial system of the third country.]

Textual Amendments

Information to be transmitted for the purpose of drawing up group resolution plansU.K.

41.—(1) For the purposes of drawing up and adopting a group resolution plan the Bank must send relevant information [F17to the appropriate regulator]—

F18(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F18(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F18(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) This article does not require any information to be disclosed if its disclosure would be contrary to section 348 of FSMA as applied for the purposes of Part 1 of the Banking Act 2009 (with modifications) by section 89L of that Act M1 (restrictions on disclosure of confidential information).

F19(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Marginal Citations

M1Section 89L was inserted by S.I. 2014/3329.

Joint decision on adoption of group resolution planU.K.

F2042.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

References to EBAU.K.

F2143.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Requesting the assistance of EBAU.K.

F2244.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Duty to transmit a copy of the group resolution planU.K.

45.  The Bank must send a copy of the group resolution plan to the appropriate regulator F23....

Textual Amendments

F24CHAPTER 3U.K.Group resolution plan where neither the PRA nor the FCA is the consolidating supervisor

Textual Amendments

Application and interpretation of Chapter 3U.K.

F2446.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Joint decision on adoption of group resolution planU.K.

F2447.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure to reach joint decision: disagreement by the Bank with a joint proposalU.K.

F2448.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure to reach joint decision: agreement by the Bank with a joint proposalU.K.

F2449.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resolution plan for group entityU.K.

F2450.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

References to EBAU.K.

F2451.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Requesting the assistance of EBAU.K.

F2452.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 4U.K.Review of resolution plans and group resolution plans

Review of resolution planU.K.

53.—(1) The Bank must review a resolution plan and make any appropriate amendment at least—

(a)once a year; or

(b)if the Bank has made a determination under article 8(5), at the intervals determined.

(2) The Bank must—

[F25(a)review a resolution plan where—

(i)any material change has been made to the legal or organisational structure of the relevant entity or to its business or financial position; or

(ii)a change results from the application of the resolution tools or the exercise of the powers under section 6B of the Banking Act 2009 in relation to the relevant entity.]

(b)make appropriate amendments if such a change could have a material impact on the effectiveness of the plan or necessitate amendment for any other reason.

(3) For the purposes of a review of a resolution plan the Bank may make a determination under article 8(3).

(4) The Bank must review a resolution plan and adopt the up-dated plan—

(a)in the case of an institution which is authorised by the PRA or FCA and is not part of a group subject to supervision on a consolidated basis in accordance with [F26the capital requirements regulation and CRR rules], in accordance with Chapter 1; F27...

F28(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) For the purposes of this article Part 3 and Chapter 1 have effect with the modifications specified in the table—

ArticleModification

Article 8

In paragraph (3) the reference to a resolution plan is a reference to the up-dated plan.

Article 37

Ignore paragraph (1).

In paragraph (2)—

(a)

the reference to a resolution plan is a reference to the up-dated plan; and

(b)

for “be drawn up” read “the review must be undertaken”.

In paragraph (3) for “drawn up” read “reviewed”.

In paragraph (4) for “drawing up” read “reviewing”.

In paragraph (5) the reference to the resolution plan is a reference to the up-dated plan.

Article 38

The reference to the resolution plan is a reference to the up-dated plan.

(6) In this article—

“relevant entity” means an institution or group entity for which the Bank has adopted a resolution plan;

“resolution plan” means a plan adopted by the Bank under Chapter 1F29...; and

“up-dated plan”, in relation to a resolution plan, means that plan as reviewed in accordance with this article (whether or not it has been amended on review).

Textual Amendments

Review of group resolution plan drawn up by the BankU.K.

54.—(1) The Bank must review a group resolution plan at least—

(a)once a year; or

(b)if the Bank has made a determination under article 8(5), at the intervals determined.

(2) The Bank must—

(a)review a group resolution plan where any material change has been made to the legal or organisational structure of the relevant group or any group entity or to its business or financial position; and

(b)make appropriate amendments if such a change could have a material impact on the effectiveness of the plan or necessitate amendment for any other reason.

(3) For the purposes of a review of a group resolution plan the Bank may make a determination under article 8(3).

(4) The Bank must review a group resolution plan and adopt the up-dated plan in accordance with Chapter 2.

(5) For the purposes of this article Part 3 and Chapter 2 have effect with the modifications specified in the table—

ArticleModification

Article 8

In paragraph (3) the reference to a group resolution plan is a reference to the up-dated plan.

Article 40

In paragraphs (1) and (2) for “draw up and adopt a” read “review the”.

In paragraph (3)—

(a)

the reference to a group resolution plan is a reference to the up-dated plan; and

(b)

for “be drawn up” read “the review must be undertaken”.

In paragraph (4) for “drawn up” read “reviewed”.

In paragraphs (5) and (7) for “drawing up a” read “reviewing the”.

Article 41

F30...

[F31Article 45]

[F32The] reference to a group resolution plan is a reference to the up-dated plan.

(6) In this article—

“group resolution plan” means a plan adopted by the Bank under Chapter 2; and

“up-dated plan”, in relation to a group resolution plan, means that plan as reviewed in accordance with this article (whether or not it has been amended on review).

Textual Amendments

Review of group resolution plan drawn up by another resolution authorityU.K.

F3355.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

CHAPTER 5U.K.Information and records for resolution planning

Information required for resolution planningU.K.

56.—(1) The regulator must provide the Bank with all information contained in a resolution pack prepared by a relevant person in accordance with rules made by the regulator under FSMA.

(2) This article does not require any information to be disclosed if its disclosure would be contrary to section 348 of FSMA.

(3) In this article—

“regulator” has the meaning given in section 3A(2) of FSMA M2;

“relevant person” has the meaning given in subsection (2) of section 137K of FSMA M3 (rules about resolution packs: duty to consult); and

“resolution pack” has the meaning given in subsection (3) of that section.

Marginal Citations

M2Section 3A was substituted by the Financial Services Act 2012, section 6(1), which substituted Part 1A of FSMA.

M3Section 137K was substituted by the Financial Services Act 2012, section 24(1), which substituted Part 9A of FSMA; and, together with the heading, is amended by paragraph 3 of Schedule 3 to this Order.

Notice of matters which could necessitate an amendment of a planU.K.

57.  The PRA and the FCA must notify the Bank without delay of any change of circumstances or other matter coming to their attention which could necessitate an amendment of a resolution plan or group resolution plan.

Records of financial contractsU.K.

58.—(1) The Bank may give directions to a relevant person in relation to maintaining detailed records of financial contracts M4 to which the relevant person is a party.

(2) A “relevant person” is—

(a)an institution authorised by the PRA or FCA; or

(b)an undertaking set up in the United Kingdom which is a subsidiary of an institution authorised by the PRA or FCA F34...; or

(c)the [F35UK] parent undertaking.

[F36(2A) “Financial contracts” means—

(a)securities contracts, including—

(i)contracts for the purchase, sale or loan of a security, a group or index of securities;

(ii)options on a security or group or index of securities;

(iii)repurchase or reverse repurchase transactions on any such security, group or index;

(b)commodities contracts, including—

(i)contracts for the purchase, sale or loan of a commodity or group or index of commodities for future delivery;

(ii)options on a commodity or group or index of commodities;

(iii)repurchase or reverse repurchase transactions on any such commodity, group or index;

(c)futures and forwards contracts, including contracts (other than a commodities contract) for the purchase, sale or transfer of a commodity or property of any other description, service, right or interest for a specified price at a future date;

(d)swap agreements, including—

(i)swaps and options relating to interest rates, spot or other foreign exchange agreements, currency, an equity index or equity, a debt index or debt, commodity indexes or commodities, weather, emissions or inflation;

(ii)total return, credit spread or credit swaps;

(iii)any agreements or transactions that are similar to an agreement referred to in paragraph (i) or (ii) which is the subject of recurrent dealing in the swaps or derivatives markets;

(e)inter-bank borrowing agreements where the term of the borrowing is three months or less;

(f)master agreements for any of the contracts or agreements referred to in sub-paragraphs (a) to (e).]

(3) A direction given by the Bank may—

(a)require records of financial contracts to be maintained;

(b)specify the details or kinds of detail which are to be recorded;

(c)require records of financial contracts to be produced at the request of the Bank;

(d)specify a period of time within which a relevant person is to be capable of producing records (“a time-limit”);

(e)specify different time-limits for different kinds of financial contract.

[F37(4) The Bank must exercise its functions under this article in accordance with any technical standards under paragraph (5).

(5) The Bank may make technical standards relating to—

(a)the circumstances in which it will give a direction under this paragraph; and

(b)the information that must be contained in the records required by such a direction.]

(4) Directions may be given with general effect or with respect to a particular relevant person or class of relevant persons, but may not specify different time-limits for different relevant persons or classes of relevant person.

Textual Amendments

Marginal Citations

M4For the meaning of “financial contracts” see the recovery and resolution directive, Article 2.1, point (100).