http://www.legislation.gov.uk/ukpga/2009/1/section/6CBanking Act 2009An Act to make provision about banking.texttext/xmlenStatute Law Database2026-02-20Expert Participation2026-01-19 Banking Act 2009s. 4(8A) (8B)Financial Services Act 2012s. 96(3)Sch. 20s. 122(3)Banking Act 2009s. 8(2)(d) and wordFinancial Services Act 2012s. 96(4)(b)Sch. 20s. 122(3) Part 1Chapter 3 6C1Where the principal amount of a relevant capital instrument or a relevant internal liability is reduced under section 6B—athe reduction must be permanent, subject to any provision made by virtue of section 48Y(1)(a);bno liability to the holder of the relevant capital instrument or the relevant internal liability remains under, or in connection with, so much of the amount of the instrument or relevant internal liability as constitutes the reduction, except for—iany liability already accrued in a case where the principal amount of the instrument or the relevant internal liability is not reduced or converted (or both) to the full extent of its capacity, andiiany liability for damages that may arise as a result of any challenge to the legality of the exercise of the power of reduction;cno compensation is to be paid to any holder of the relevant capital instrument or the relevant internal liability other than in accordance with subsection (4).2Nothing in subsection (1)(b) prevents the provision of Common Equity Tier 1 instruments to a holder of relevant capital instruments or relevant internal liabilities in accordance with subsection (4).3In order to effect a conversion of relevant capital instruments or relevant internal liabilities under section 6B, the Bank of England may require the bank, or a UK parent undertaking, to issue Common Equity Tier 1 instruments to the holders of the relevant capital instruments or relevant internal liabilities.4The relevant capital instruments or relevant internal liabilities may only be so converted if—athe Common Equity Tier 1 instruments are issued by the bank, or by a UK parent undertaking of the bank with the agreement of the Bank of England,bthe Common Equity Tier 1 instruments are issued prior to the issue of any shares by the bank, or by a parent undertaking of the bank, for the purposes of provision of own funds by the Treasury,cthe Common Equity Tier 1 instruments are awarded and transferred without delay following the exercise of the conversion power, anddthe conversion rate that determines the number of Common Equity Tier 1 instruments that are provided in respect of each relevant capital instrument or relevant internal liability represents appropriate compensation to the affected creditor for any loss incurred in consequence of the conversion of that instrument or liability. 4AWhere different conversion rates are applied to different classes of instrument or liability, a lower conversion rate must be applied to subordinated debt than is applied to debts ranking higher in the hierarchy of claims in normal insolvency proceedings.5For the purposes of the provision of Common Equity Tier 1 instruments in accordance with subsections (2), (3) and (4), the Bank of England may require the bank or a UK parent undertaking of the bank to maintain at all times the necessary prior authorisation to issue the relevant number of Common Equity Tier 1 instruments.6Before making a mandatory reduction instrument, the Bank must consult—athe PRA,bthe FCA, andcthe Treasury.7In this section—“parent undertaking” has the meaning given by Article 4.1(15)(a) of the capital requirements regulation,...“UK parent undertaking” means a parent undertaking that is incorporated in, or formed under the law of, any part of the United Kingdom.Pt. 1 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2Pt. 1: power to amend conferred (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 17(3)(f), 148(5); S.I. 2014/377, art. 2(1)(b), Sch. Pt. 2Ss. 6A-6D and cross-heading inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 10Pt. 1 Ch. 3 formed from ss. 4-83 (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 7Words in s. 6C(4) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(f)Words in s. 6C(1) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(a)Words in s. 6C(1)(b) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(b)Words in s. 6C(1)(b) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(c)Words in s. 6C(1)(c) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(b)Words in s. 6C(2) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(d)Words in s. 6C(3) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(e)Words in s. 6C(4)(d) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 8(g)Words in s. 6C(4)(a) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(2)(a); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 6C(4)(a) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(2)(b); 2020 c. 1, Sch. 5 para. 1(1)Word in s. 6C(4)(b) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(3); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 6C(4)(d) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(4) (as amended by S.I. 2020/1350, regs. 1(2), 76(2)(a)); 2020 c. 1, Sch. 5 para. 1(1)S. 6C(4A) inserted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(5) (as amended by S.I. 2020/1350, regs. 1(2), 76(2)(b)); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 6C(7) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 10(6); 2020 c. 1, Sch. 5 para. 1(1)