The UK’s special resolution regime was recently updated to transpose the Bank Recovery and Resolution Directive (BRRD, following a consultation published in July 2014.
Since then the Government has identified a small number of changes to the legislation that would clarify and strengthen the UK’s transposition of the BRRD. HM Treasury has now issued a consultation seeking industry views on the proposed measures. In particular, the proposed new measures include:
- new powers for the Bank of England (BoE) and HM Treasury to ensure the effectiveness of contractual write-down and conversion provisions by preventing them from being “switched off” by the Banking Act rules on default event rights, where appropriate;
- two new specific early intervention powers for the PRA and FCA: (i) the power to require the removal and replacement of directors and senior managers; and (ii) the power to appoint a temporary manager. In addition, there would be new powers for the PRA and FCA to call a shareholder meeting if the management body had been required to call a meeting, and had failed to do so; and
- new powers for the BoE to resolve a branch of a third country institution, independently of the third country resolution authority, where relevant conditions are met.
In addition to the above, HM Treasury sets out in chapter 5 certain technical changes to clarify the measures transposing the BRRD.
A draft statutory instrument has been published alongside the consultation.
The deadline for comments on the consultation is 25 February 2016.
View Consultation on the implementation of the Bank Recovery and Resolution Directive, 17 December 2015