Section 1 OverviewI1

United Kingdom

(1)

The purpose of the special resolution regime for banks is to address the situation where all or part of the business of a bank has encountered, or is likely to encounter, financial difficulties.

(2)

The special resolution regime consists of—

(a)

the F1five stabilisation options,

(b)

the bank insolvency procedure (provided by Part 2), and

(c)

the bank administration procedure (provided by Part 3).

(3)

F2The F3five “stabilisation options” are—

(a)

transfer to a private sector purchaser (section 11),

(b)

transfer to a bridge bank (section 12),

(ba)

F4transfer to an asset management vehicle (section 12ZA),

(c)

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

(d)

transfer to temporary public ownership (section 13).

(4)

Each of the F5five stabilisation options is achieved through the exercise of one or more of the “stabilisation powers”, which are—

(za)

F6the resolution instrument powers (sections 12A(2) and 48U to 48W),

(a)

the share transfer powers (sections 15, 16, 26 to 31 and 85), and

(b)

the property transfer powers (sections 33F7, 41A and 42 to 46).

(c)

F8the third country instrument powers (sections 89H to 89J).

(5)

Each of the following has a role in the operation of the special resolution regime—

(a)

the Bank of England,

(b)

the Treasury,

(c)

F9the Prudential Regulation Authority, and

(d)

the Financial Conduct Authority.

(6)

The Table describes the provisions of this Part.

Sections	Topic
Sections 1 to 3	Introduction
F10Sections 3A and 3B	Pre-resolution powers
Sections 4 to 6	Objectives and code
Sections 6A to 6D	Mandatory write-down, conversion etc of capital instruments
Section 6E	Valuation before mandatory write-down or stabilisation action
Sections 7 to 10	Exercise of powers: general
Sections 11 to 13	The stabilisation options
Sections 14 to 32	Transfer of securities
Sections 33 to F1148A	Transfer of property
Sections 48B to F1248WA	Bail-in option
Sections 48X and 48Y	Replacement of provisional valuation
Section 48Z	Termination rights etc
Sections 49 to 62	Compensation
Section 62A	Independent valuer
Sections 62B to 62E	Resolution administrator
Sections 63 to 75	Incidental functions
Sections 76 to F1381A	Treasury
F14Sections 81B to 83	Groups
Sections 83ZA to 83Z2	Information and enforcement
F15Section 83A	Banks not regulated by the PRA
Sections 84 to 89	Building societies, &c.
F16Section 89A	Investment firms
F17. . .	. . .
Sections 89H to 89J	Third-country resolution actions
F18Section 89JA	Resolution of UK branches of third-country institutions

Annotations

Textual amendments

F1: Word in s. 1(2)(a) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(2)
F2: S. 1(3) substituted (31.12.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 2 para. 12(3); S.I. 2014/3160, art. 2(1)(b)
F3: Word in s. 1(3) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(3)(a)
F4: S. 1(3)(ba) inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(3)(b)
F5: Word in s. 1(4) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(4)(a)
F6: S. 1(4)(za) inserted (31.12.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 2 para. 12(4)(b); S.I. 2014/3160, art. 2(1)(b)
F7: Word in s. 1(4)(b) inserted (31.12.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 2 para. 12(4)(c); S.I. 2014/3160, art. 2(1)(b)
F8: S. 1(4)(c) inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(4)(b)
F9: S. 1(5)(c)(d) substituted for s. 1(5)(c) (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 2(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
F10: Words in s. 1(6) inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 4(5)
F11: Word in s. 1(6) substituted (8.4.2010) by Financial Services Act 2010 (c. 28), s. 26(1)(l), Sch. 2 para. 40
F12: Word in s. 1(6) substituted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 3
F13: Word in s. 1(6) substituted (1.1.2015) by Financial Services Act 2012 (c. 21), ss. 99(3), 122(3) (with Sch. 20); S.I. 2014/3323, art. 2
F14: Words in s 1(6) substituted (1.8.2014) by Financial Services Act 2012 (c. 21), ss. 100(2), 122(3) (with Sch. 20); S.I. 2014/1847, art. 2
F15: Words in s. 1(6) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 2(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
F16: Words in s 1(6) inserted (1.8.2014) by Financial Services Act 2012 (c. 21), ss. 101(2), 122(3) (with Sch. 20); S.I. 2014/1847, art. 2
F17: Words in s. 1(6) omitted (31.12.2023) by virtue of Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 11 para. 162(2); S.I. 2023/1382, reg. 8(b) (with reg. 14)
F18: Words in s. 1(6) inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 29(2)

Commencement

I1: S. 1 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 1