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Explanatory note

Original text. Later amendments are not shown.

(This note is not part of the Order)

This Order specifies conditions which must be met in respect of an undertaking which is in the same group as a bank if it is to be a “banking group company” for the purposes of Part 1 of the Banking Act 2009 (c. 1) (“the Act”). Section 81B of the Act empowers the Bank of England to exercise a stabilisation power in respect of a banking group company to achieve a transfer to a commercial purchaser or a bridge bank.

For these purposes “bank” means a bank (as defined in section 2 of the Act), a building society, an investment firm or a recognised central counterparty which meets the conditions for the exercise of a stabilisation power.

A banking group company may be a parent or subsidiary undertaking of the bank or another company in the same group.

There are excluded from the meaning of “banking group company”—

  • a mixed activity holding company where the bank is a subsidiary of an intermediate financial holding company;

  • a subsidiary of such a mixed activity holding company, other than a parent or subsidiary of the bank, if it is neither a financial institution nor a subsidiary of a financial institution; and

  • a covered bond vehicle or securitisation company which is not an investment firm or a financial institution (within the meaning given in Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26th June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012).

Article 4 amends the Banking Act 2009 (Restriction of Partial Property Transfers) Order 2009 (S.I. 2009/322) to restrict partial property transfers in respect of the property, rights or liabilities of a banking group company (unless it is a financial institution or a parent undertaking of the bank). Such a transfer must be necessary for carrying on the business, or any part of the business, of a banking institution, recognised central counterparty or other banking group company in the same group.

A full impact assessment of the effect that this Order will have on the costs of business and the voluntary sector is available from Her Majesty’s Treasury, 1 Horse Guards Road, London SW1A 2HQ or on http://www.hm-treasury.gov.uk/ and is published alongside the Order on http://www.legislation.gov.uk/.