Draft Order laid before Parliament under section 9N(1) of the Bank of England Act 1998, for approval by resolution of each House of Parliament.
2021 No. XXX
The Bank of England Act 1998 (Macro-prudential Measures) (Amendment) Order 2021
Made
Coming into force
In accordance with section 9L(2) of the Bank of England Act 19981, the Treasury have consulted the Financial Policy Committee.
In accordance with section 9N(1) of the Bank of England Act 19982, a draft of this Order has been laid before Parliament and approved by a resolution of each House of Parliament.
The Treasury, in exercise of the powers conferred by sections 9I(2) and 9L(1) and (4)(a), (b) and (c) of the Bank of England Act 19983, make the following Order.
Citation and commencement1
1
This Order may be cited as the Bank of England Act 1998 (Macro-prudential Measures) (Amendment) Order 2021.
2
This Order comes into force on the day after the day on which it is made.
Amendment of the Bank of England Act 1998 (Macro-prudential Measures) Order 20132
1
The Bank of England Act 1998 (Macro-prudential Measures) Order 20134 is amended as follows.
2
In article 1(2)—
a
in the definition of “FSMA cost benefit analysis”, after “Part 9A” insert “or section 192XA”5;
b
after the definition of “FSMA cost benefit analysis” insert—
“holding company” means a financial holding company or a mixed financial holding company;
c
omit the definition of “mixed financial holding company”.
3
At the start of article 2(2), insert “Subject to paragraph (3),”.
4
In the table in article 2(2), after “UK banks” each time it occurs insert “, or their holding companies,”.
5
In the table in article 2(2), after “UK investment firms which are PRA-authorised persons” each time it occurs insert “, or their holding companies,”.
6
In the table in article 2(2), after “on such UK investment firms” insert “, or their holding companies,”.
7
After article 2(2), insert—
3
Where a measure listed in the table is applied to the holding company of a UK bank or of a UK investment firm which is a PRA-authorised person, the measure may only be applied to that holding company on, or by reference to, a consolidated basis.
Amendment of the Bank of England Act 1998 (Macro-prudential Measures) Order 20153
1
The Bank of England Act 1998 (Macro-prudential Measures) Order 20156 is amended as follows.
2
In article 2(1), in the definition of “cost benefit analysis”, after “Part 9A” insert “or section 192XA”.
3
In article 4(2), after “Part 9A” insert “or section 192XA”.
4
After article 4, insert—
Review5
1
The Treasury must from time to time—
a
carry out a review of the regulatory provision contained in this Order, and
b
publish a report setting out the conclusions of the review.
2
The first report must be published before the end of the period of five years beginning with the day on which this article comes into force.
3
Subsequent reports must be published at intervals not exceeding five years.
4
Section 30(4) of the Small Business, Enterprise and Employment Act 20157 requires that a report published under this article must, in particular—
a
set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a);
b
assess the extent to which those objectives are achieved;
c
assess whether those objectives remain appropriate; and
d
if those objectives remain appropriate, assess the extent to which they could be achieved in a way which involves less onerous regulatory provision.
5
In this article, “regulatory provision” has the meaning given in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015 (see section 32 of that Act).
Amendment of the Bank of England Act 1998 (Macro-prudential Measures) (No.2) Order 20154
1
The Bank of England Act 1998 (Macro-prudential Measures) (No.2) Order 20158 is amended as follows.
2
In article 2(1)—
a
for the definition of “consolidated basis”, substitute—
“consolidated basis” means, in relation to a measure, on the basis that the undertaking to which the measure applies and one or more other undertakings are to be treated as a single undertaking;
b
in the definition of “cost benefit analysis”, after “Part 9A” insert “or section 192XA”9;
c
after the definition of “G-SII buffer”, insert—
“holding company” means a financial holding company or a mixed financial holding company;
d
omit the definition of “total exposure measure”.
3
After article 2(1), insert—
2
Subject to article 4(4), “total exposure measure” has the meaning given in rules made by the PRA as amended from time to time.
4
For article 3 substitute—
Macro-prudential measures3
1
Subject to paragraph (2), each of the measures set out in article 4 may be applied on, or by reference to, an individual basis or a consolidated basis.
2
Where a measure set out in article 4(1)(a) or (d) is applied to the holding company of a UK bank or of a UK investment firm, the measure may only be applied to that holding company on, or by reference to, a consolidated basis.
5
In article 4(1), after “UK banks” each time it occurs insert “, or their holding companies,”.
6
In article 4(1), after “UK investment firms” each time it occurs insert “, or their holding companies,”.
7
After article 4(3), insert—
4
The Financial Policy Committee may include, in a direction relating to any of the measures specified in paragraph (1), specifications as to how the total exposure measure is to be determined for the purposes of that measure.
8
In article 5(2), after “Part 9A” insert “or section 192XA”.
9
After article 5, insert—
Review6
1
The Treasury must from time to time—
a
carry out a review of the regulatory provision contained in this Order, and
b
publish a report setting out the conclusions of the review.
2
The first report must be published before the end of the period of five years beginning with the day on which this article comes into force.
3
Subsequent reports must be published at intervals not exceeding five years.
4
Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this article must, in particular—
a
set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a);
b
assess the extent to which those objectives are achieved;
c
assess whether those objectives remain appropriate; and
d
if those objectives remain appropriate, assess the extent to which they could be achieved in a way which involves less onerous regulatory provision.
5
In this article, “regulatory provision” has the meaning given in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015 (see section 32 of that Act).
Amendment of the Bank of England Act 1998 (Macro-prudential Measures) Order 20165
1
The Bank of England Act 1998 (Macro-prudential Measures) Order 201610 is amended as follows.
2
In article 2, in the definition of “FSMA cost-benefit analysis”, after “Part 9A” insert “or section 192XA”.
3
In article 4(2), after “Part 9A” insert “or section 192XA”.
(This note is not part of the Order)