Part 1U.K.Special Resolution Regime

[F1Chapter 3 U.K. Special resolution action]

[F2Groups]U.K.

[F3[F481ZBB.Transfer to asset management vehicle: supplemental powers in relation to certain holding companiesU.K.

(1)Without prejudice to the operation of section 81ZBA, the Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 12ZA(3) if the following conditions are met.

(2)Condition 1 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.

(3)Condition 2 is that the banking group company is an entity within [F5subsection (2A) of section 81AA].

(4)Condition 3 is that the PRA is satisfied that the banking group company is failing or likely to fail.

(5)Condition 4 is that the Bank of England is satisfied that, having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the banking group company that will result in Condition 3 ceasing to be met.

(6)Condition 5 is that the power is exercised in connection with the exercise of one or more stabilisation powers in respect of the banking group company otherwise than for the purposes of the third stabilisation option.

(7)Condition 6 is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in the advancement of one or more of the special resolution objectives.

(8)Condition 7 is that the Bank of England is satisfied that one or more of the special resolution objectives would not be met to the same extent by the winding up of the banking group company.

(9)Condition 8 (which applies only in a financial assistance case) is that—

(a)the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and

(b)in the Bank of England’s opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.

(10)Condition 9 is that the Bank of England is satisfied that—

(a)the situation of the market for the assets which it is proposed to transfer by the exercise of the stabilisation power is of such a nature that the liquidation of those assets under normal insolvency proceedings could have an adverse effect on one or more financial markets,

(b)the transfer is necessary to ensure the proper functioning of the banking group company from which the transfer is to be made, or

(c)the transfer is necessary to maximise the proceeds available for distribution.

(11)In this section—

• “financial assistance case” has the meaning given in section 81B(8); F6...

• F7...]]