{
  "url": "https://openlegislation.uk/financial-services-and-markets-act-2023/schedule-11/paragraph-34",
  "json_url": "https://openlegislation.uk/financial-services-and-markets-act-2023/schedule-11/paragraph-34.json",
  "legislation": "ukpga/2023/29",
  "legislation_title": "Financial Services and Markets Act 2023",
  "legislation_url": "https://openlegislation.uk/financial-services-and-markets-act-2023",
  "path": "schedule/11/paragraph/34",
  "kind": "paragraph",
  "number": "34",
  "heading": "Write-down power",
  "text": "(1) The seventh stabilisation option is for the Bank to make one or more write-down instruments.\n(2) A write-down instrument is an instrument that makes any of the following provision (or any combination of the following)—\n(a) provision cancelling an unsecured liability owed by the CCP;\n(b) provision modifying or changing the form of an unsecured liability owed by the CCP;\n(c) provision that a contract under which the CCP has an unsecured liability is to have effect as if a specified right had been exercised under it;\n(d) provision under paragraph 35(1).\n(3) The power under this paragraph may be exercised only for the purpose of recovering losses arising otherwise than as a result of a clearing member defaulting on the member’s obligations to the CCP.\n(4) The power under sub-paragraph (2) may not be exercised so as to affect the following liabilities—\n(a) liabilities to employees or workers, including liabilities owed to a pension scheme in respect of those persons;\n(b) liabilities to commercial or trade creditors arising from the provision to the CCP of goods or services that are critical to the continuity of the CCP’s critical clearing services;\n(c) HMRC debts which are preferential debts within the meaning of section 386 of the Insolvency Act 1986;\n(d) liabilities to designated systems, operators of designated systems, or participants in such systems to the extent that the liabilities arise from their participation in the system;\n(e) liabilities to interoperable CCPs;\n(f) liabilities to central banks;\n(g) liabilities to clearing members so far as these relate to initial margin requirements;\n(h) liabilities to small enterprises.\n(5) The reference to modifying a liability owed by the CCP includes a reference to modifying the terms (or the effect of the terms) of a contract under which the CCP has a liability.\n(6) The reference to changing the form of a liability owed by the CCP includes, for example—\n(a) converting an instrument under which a CCP owes a liability from one form or class to another,\n(b) replacing such an instrument with another instrument of a different form or class,\n(c) creating a new security (of any form or class) in connection with the modification of such an instrument, or\n(d) converting those liabilities into securities issued by the CCP or a bridge central counterparty or UK parent of the CCP.\n(7) The Treasury may by regulations amend sub-paragraph (4) by—\n(a) adding to the list of liabilities;\n(b) amending or omitting any liability listed.\n(8) Regulations under this paragraph are subject to the affirmative procedure.\n(9) In this paragraph—\n“designated system” has the meaning given by regulation 2 of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979) as amended from time to time;\n“initial margin requirements” means margins provided by clearing members to a CCP to cover the CCP’s potential future exposure in the event of default by those members;\n“small enterprise” means an enterprise which employs fewer than 50 people and whose annual turnover or annual balance sheet total does not exceed £10 million.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "I",
      "label": "I1",
      "text": "Sch. 11 para. 34 not in force at Royal Assent, see s. 86(3)"
    },
    {
      "type": "I",
      "label": "I2",
      "text": "Sch. 11 para. 34 in force at 31.12.2023 by S.I. 2023/1382, reg. 8(b)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/2023/29/schedule/11/paragraph/34",
    "retrieved_at": "2026-10-29T08:52:13.792774+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}