On 28 October 2020, the Bank of England (BoE) and the PRA issued a package of proposals relating to resolution policy.

The PRA published the following Consultation Papers (CPs):

• CP18/20: Bank Recovery and Resolution Directive II (CP18/20). In CP18/20, the PRA sets out proposals relating to its Contractual Recognition of Bail-in (CROB) and Stay in Resolution (Stays) Rules. The purpose of the proposals is to support the UK’s transposition of the Bank Recovery and Resolution Directive II (BRRD II), which amends the BRRD. The UK is required to transpose the BRRD II amendments by 28 December 2020. HM Treasury’s statutory instrument for BRRD II (the SI) was laid in Parliament on 15 October 2020 in order to deliver the transposition of BRRD II. The SI will result in changes to primary legislation that will affect the existing PRA regime for CROB and Stays. The proposals in CP18/20 would: (i) temporarily suspend part of the CROB Part of the PRA Rulebook with effect from 28 December 2020 until Implementation Period (IP) completion day; (ii) reinstate the existing CROB Part, with minor amendments, to come into force immediately after IP completion day. The new rules post IP completion day would be otherwise unchanged from the existing rules. The amendment proposed in CP18/20, is a minor change to reflect the statutory reference to the Banking Act definition of ‘excluded liability’ in the Contractual Recognition Part of the PRA Rulebook. The reinstated CROB Rules would be updated to account for the SI amendments; (iii) amend the Stay in Resolution Part of the PRA Rulebook to reflect the temporary SI change to the definition of ‘crisis management measure’ in the Banking Act 2009, to come into force from 28 December 2020 until IP completion day; and (iv) reintroduce the existing ‘Stay in Resolution’ Part, as it was before 28 December 2020, to come into force immediately after IP completion day.
• CP19/20: Resolution assessments – amendments to reporting and disclosure dates (CP19/20). In CP19/20 the PRA proposes to extend, by one year, the dates by which firms are first required to submit a report of their assessment of their preparation for resolution, and to first publish a summary of that report under Rule 3.1(1) and Rule 4.1(1) respectively of the Resolution Assessment Part of the PRA Rulebook (Rules). This would amend the dates in the Rules as follows: (i) Resolution Assessment 3.1(1), to reflect that the date by which firms must submit a report of their assessment would change from the first Friday in October 2020, to the first Friday in October 2021; and (ii) Resolution Assessment 4.1(1), to reflect that the date by which firms must publish a summary of the most recent report would change from the second Friday in June 2021 to the second Friday in June 2022. The PRA also proposes consequential amendments to Supervisory Statement 4/19 ‘Resolution assessment and publication disclosure by firms’.
• Operational continuity in resolution: Updates to the policy (CP20/20). In CP20/20 the PRA sets out its proposals to revise its operational continuity in resolution (OCIR) policy. The proposals would make amendments to the Operational Continuity Part of the PRA Rulebook (see Appendix 1) and PRA OCIR expectations, and would result in a new Supervisory Statement on OCIR (Appendix 2). The new Supervisory Statement would supersede Supervisory Statement 9/16 ‘Ensuring operational continuity in resolution’.

The deadline for comments on CP18/20 is 30 November 2020. The deadline for comments on CP19/20 and CP20/20 is 31 January 2021.

The BoE has also published a CP on updates to its approach to assessing resolvability. In this CP the BoE proposes amendments to Statement of Policy: The Bank of England’s Approach to Assessing Resolvability (SoP). The SoP sets out how the BoE, as resolution authority, intends to assess individual firms’ resolvability, and the resolvability outcomes the BoE deems necessary to support resolution. The proposals in the CP include changes to: (i) the OCIR section of the SoP; and (ii) resolution measures aimed at alleviating operational burdens on PRA-regulated firms in response to the COVID-19 outbreak. The deadline for comments on the CP is 31 January 2021.