SCHEDULES

SCHEDULE 2Bail-in stabilisation option

PART 1Amendments of Banking Act 2009

Other amendments of the Act

I112

1

Section 1 (overview) is amended as follows.

2

In subsection (2)(a), for “three” substitute “ four ”.

3

For subsection (3) substitute—

3

The four “stabilisation options” are—

a

transfer to a private sector purchaser (section 11),

b

transfer to a bridge bank (section 12),

c

the bail-in option (section 12A), and

d

transfer to temporary public ownership (section 13).

4

In subsection (4)—

a

for “three” substitute “ four ”;

b

before paragraph (a) insert—

za

the resolution instrument powers (sections 12A(2) and 48U to 48W),

c

in paragraph (b), after “33” insert “ , 41A ”.

I213

In section 13 (temporary public ownership), in subsection (1), for “third” substitute “ fourth ”.

I314

In section 17 (share transfers: effect)—

a

in subsection (1), after “order” insert, “ or by a resolution instrument ”;

b

in subsection (5), after “order” insert “ or a resolution instrument ”;

c

in subsection (6), after “order” insert “ or a resolution instrument ”.

I415

In section 18 (share transfers: continuity), after subsection (5) insert—

6

This section applies to a resolution instrument as it applies to a share transfer instrument; and in relation to a resolution instrument references in this section to a “transfer” are to a transfer of securities (whether made by that or another resolution instrument) and “transferor” and “transferee” are to be read accordingly.

I516

In section 44 (reverse property transfer)—

a

in subsection (2), after “more” insert “ bridge bank ”;

b

in subsection (3), after “more” insert “ bridge bank ”;

c

in subsection (4), for “A reverse” substitute “ A bridge bank reverse ”;

d

in subsection (4A)—

i

after “make a” insert “ bridge bank ”, and

ii

in paragraph (b), for “the reverse” substitute “ the bridge bank reverse ”;

e

in subsection (5), for “a reverse” substitute “ a bridge bank reverse ”;

f

in subsection (6), for “a reverse” substitute “ a bridge bank reverse ”;

g

in subsection (7), for “a reverse” substitute “ a bridge bank reverse ”;

h

in the heading, for “Reverse” substitute “ Bridge bank: reverse ”.

I617

In section 63 (general continuity obligation: property transfers), in subsection (1)(a), for “or 12(2)” substitute “ , 12(2) or 41A(2) ”.

I718

In section 66 (general continuity obligation: share transfers)—

a

in subsection (1)(a), after “13(2)” insert “ , or which falls within subsection (1A) ”;

b

in subsection (1)(d)(i), after “11(2)(a)” insert “ , or in a case falling within subsection (1A) ”;

c

after subsection (1) insert—

1A

A bank falls within this subsection if a resolution instrument (or supplemental resolution instrument) has changed the ownership of the bank (wholly or partly) by providing for the transfer, cancellation or conversion from one form or class to another of securities issued by the bank (and the reference in subsection (1)(b) to “the transfer” includes such a cancellation or conversion).

I819

In section 67 (special continuity obligation: share transfers), in subsection (4)(c), after “order” insert “ or resolution instrument ”.

I920

In section 68 (continuity obligations: onward share transfers), in subsection (1)(a), after “transferred by” insert “ a resolution instrument under section 12A(2) or supplemental resolution instrument under section 48U(2) or a ”.

I1021

In section 71 (pensions), in subsection (1)—

a

omit the “and” at the end of paragraph (b);

b

after paragraph (c) insert

, and

d

resolution instruments.

I1122

In section 72 (enforcement), in subsection (1)—

a

omit the “or” at the end of paragraph (b);

b

after paragraph (c) insert

, or

d

a resolution instrument.

I1223

In section 73 (disputes), in subsection (1)—

a

omit the “and” at the end of paragraph (b);

b

after paragraph (c) insert

, and

d

resolution instruments.

I1324

In section 74 (tax), in subsection (6), for “or 45” substitute “ , 45, 48U or 48V ”.

I1425

After section 80 insert—

80ATransfer for bail-in purposes: report

1

This section applies where the Bank of England makes one or more resolution instruments under section 12A(2) in respect of a bank.

2

The Bank of England must, on request by the Treasury, report to the Chancellor of the Exchequer about—

a

the exercise of the power to make a resolution instrument under section 12A(2),

b

the activities of the bank, and

c

any other matters in relation to the bank that the Treasury may specify.

3

In relation to the matters in subsection (2)(a) and (b), the report must comply with any requirements that the Treasury may specify.

4

The Chancellor of the Exchequer must lay a copy of each report under subsection (2) before Parliament.

I1526

In section 81A (accounting information to be included in reports under sections 80 and 81)—

a

in subsection (1), for “or 81” substitute “ , 80A(2)(b) or 81 ”;

b

in the heading, for “and 81” substitute “ , 80A(2)(b) and 81 ”.

I1627

In section 85 (temporary public ownership), in subsection (1), for “third” substitute “ fourth ”.

I1728

In section 136 (overview), in the Table in subsection (3), for “152” substitute “ 152A ”.

I1829

After section 152 insert—

152AProperty transfer from transferred institution

1

This section applies where the Bank of England—

a

makes a resolution instrument that transfers securities issued by a bank (or a bank's parent undertaking), in accordance with section 12A(2), and

b

later makes a property transfer instrument from the bank or from another bank which is or was in the same group as the bank, in accordance with section 41A(2).

2

This Part applies to the transferor under the property transfer instrument made in accordance with section 41A(2) as to the transferor under a property transfer instrument made in accordance with section 12(2).

3

For that purpose this Part applies with any modifications specified by the Treasury in regulations; and any regulations—

a

are to be made by statutory instrument, and

b

may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

I1930

In section 220 (insolvency etc), after subsection (4) insert—

4A

The fact that ownership of an authorised bank is transferred or otherwise changed as a result of a resolution instrument (or an instrument treated as a resolution instrument) does not itself prevent the bank from relying on section 213.

I2031

In section 259 (statutory instruments)—

a

in the Table in subsection (3), in Part 1, in the entry relating to section 60 for “Third party compensation” substitute “ Third party compensation: partial property transfers ”;

b

in the Table in subsection (3), in Part 1, at the appropriate places insert—

48F(1) and (2)

Power to amend definition of “excluded liabilities”

Draft affirmative resolution

48G

Insolvency treatment principles

Draft affirmative resolution

48P

Safeguarding of certain financial arrangements

Draft affirmative resolution

52A

Bail-in compensation orders

Draft affirmative resolution”

“60A

Third party compensation: instruments containing special bail-in provision

Draft affirmative resolution

c

in the Table in subsection (3), in Part 3, at the appropriate place insert—

152A

Property transfer from transferred institution

Draft affirmative resolution

d

in subsection (5), after paragraph (d) insert—

da

section 60A (special resolution regime: instruments containing special bail-in provision),

e

in subsection (5), after paragraph (k) insert—

ka

section 152A (bank administration: property transfer from transferred institution),

I2132

In section 261 (index of defined terms), in the Table, at the appropriate places insert—

Bail-in compensation order

49”

“Resolution instrument

12A”

“Special bail-in provision

48B