The Financial Services and Markets Act 2000 (Contribution to Costs of Special Resolution Regime) Regulations 2010

PART 1

Calculation of the net cost of the resolution

1.  The Treasury shall keep accounts of eligible expenses incurred (“the expenses account”) and of recoveries made (“the recoveries account”) by itself or by the other person in respect of the banking institution.

2.  The accounts shall be dated from the time when the Treasury or the other person first incurred eligible expenses or made recoveries, whichever is the sooner.

3.  The Treasury shall add eligible expenses and recoveries to the appropriate accounts on the dates on which they are incurred or made.

4.  Interest at the notified rate shall accrue daily on the amount in each account and shall be added to the account on each anniversary of the relevant time, but where the final notification is made on a date falling after an anniversary date, then all accrued interest not yet added shall be added to the account on the date of the final notification.

5.  When the Treasury are satisfied that all recoveries have been made in respect of the banking institution, or considers that any remaining recoveries are sufficiently foreseeable so as to be included in the recoveries account on the date of the final notification, it shall calculate the net cost of resolution.

6.  The net cost of resolution is the total amount in the expenses account less the total amount in the recoveries account on the date of the final notification, but if the total amount in the recoveries account equals or exceeds the total amount in the expenses account, the net cost of resolution is zero.