SCHEDULE 3Amendments

PART 3Amendments of secondary legislation

Financial Services and Markets Act 2000 (Prescribed Financial Institutions) Order 201311

1

The Financial Services and Markets Act 2000 (Prescribed Financial Institutions) Order 2013 M1 is amended as follows.

2

In article 1(2) (interpretation)—

a

for the definition of “financial holding company” substitute—

“financial holding company” has the meaning given by Article 4(1)(20) of the capital requirements regulation;

b

for the definition of “financial institution” substitute—

“financial institution” has the meaning given by Article 4(1)(26) of the capital requirements regulation;

c

after the definition of “insurance undertaking” insert—

  • “investment firm” has the meaning given by Article 4(1)(2) of the capital requirements regulation;

  • “mixed activity holding company” means a parent undertaking which—

    1. a

      is not a credit institution, an investment firm, a financial holding company or a mixed financial holding company; and

    2. b

      has at least one subsidiary which is a credit institution or an investment firm;

d

after the definition of “reinsurance undertaking” insert—

“relevant MAHC” means a mixed activity holding company which has at least one subsidiary which—

  1. a

    is an institution; and

  2. b

    is not a subsidiary of a financial holding company which is also a subsidiary of the mixed activity holding company;

3

In article 2 (prescribed financial institutions)—

a

in paragraph (2) at the end insert—

d

a mixed activity holding company for the purposes set out in paragraph (3) and (4);

e

a relevant MAHC for the purpose set out in paragraph (5).

b

after paragraph (2) insert—

3

The first purpose is enabling the FCA or PRA to make rules under section 192JB M2 of FSMA in relation to the provision of financial support to other members of the group of a mixed activity holding company which encounter or are likely to encounter financial difficulties.

4

The second purpose is enabling the FCA or PRA to make rules which require a mixed activity holding company to notify it that the company is failing or likely to fail (within the meaning given in Article 32.4 of the recovery and resolution directive).

5

The third purpose is enabling the FCA or PRA to make rules which require a relevant MAHC, in any agreement which creates a liability, to include a contractual term by which a party to the agreement to whom the liability is owed—

a

recognises that the liability may be subject to the exercise by the Bank of England of power to make—

i

a mandatory reduction instrument (within the meaning given in section 6B of the Banking Act 2009); or

ii

a resolution instrument under section 12A, 48U, 48V or 48W of that Act M3; and

b

agrees to be bound by any reduction of the principal or outstanding amount due or by any conversion or cancellation effected by the exercise of that power.

6

Rules made for the purpose set out in paragraph (5) may not be brought into force before 1st January 2016.