19B.—(1) Subject to paragraph (2), where a ring-fenced body incurs a [F2prohibited] financial institution exposure as a result of a counterparty to a transaction becoming a relevant financial institution at any time after the date upon which the transaction was entered into, that exposure is permitted for a period of twelve months commencing on the date upon which the counterparty became a relevant financial institution.
(2) A ring-fenced body is not permitted to incur the [F3prohibited] financial institution exposure by virtue of paragraph (1) where, at the time the transaction was entered into, the ring-fenced body knew, or could reasonably be expected to have known, that the counterparty would become a relevant financial institution.]
[F4(3) In this article, “prohibited financial institution exposure” means a financial institution exposure which would be prohibited under article 14(1) if it was not permitted under this article.]
Textual Amendments
F1Arts. 19A, 19B inserted (1.12.2016) by The Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2016 (S.I. 2016/1032), arts. 1(2), 3(10)
F2Word in art. 19B(1) inserted (4.2.2025) by The Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2025 (S.I. 2025/30), arts. 1(2), 10(6)(a)