The Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014
| Jurisdiction | UK Non-devolved |
| Citation | SI 2014/3350 |
| Year | 2014 |
(1) This Order may be cited as the Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014.(2) This Order comes into force on 1st January 2015.(1) In this Order—as applied with or without modifications by that Act, as that Act has effect on the day on which the Bank Recovery and Resolution Order 2016 comes into force. .(1) This Order applies to an instrument which makes special bail-in provision.(2) In this Order “relevant banking institution” means, in relation to an instrument to which this Order applies, the banking institution in respect of which special bail-in provision is made by the instrument.(1) An instrument to which this Order applies may not make special bail-in provision in respect of a protected liability (subject to paragraph (6) ) .condition 1 is that the liability is owed by the relevant banking institution to a particular person (“the person”) ;condition 2 is that the liability is a liability which either the person or the relevant banking institution is entitled to set-off or net under particular set-off arrangements, netting arrangements or title transfer collateral arrangements into which the person has entered with the relevant banking institution (“the relevant arrangements”) ;where the liability relates to a derivative, financial contract or qualifying master agreement (see article 5) , it has not been converted into a net debt, claim or obligation, whether in accordance with the relevant arrangements or through the making of special bail-in provision or otherwise;where the liability relates to any other type of contract, it has neither been converted nor treated as if it had been converted into a net debt, claim or obligation, whether in accordance with the relevant arrangements or through the making of special bail-in provision or otherwise.liabilities in relation to an unsecured debt instrument which is a transferable security issued by that banking institution, and for these purposes a “debt instrument” is any instrument falling within article 77 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ; liabilities in relation to a capital instrument issued by that banking institution;liabilities owed in relation to subordinated debt;at the date on which it was issued or made, had a maturity period of 12 months or more, andis not a derivative, financial contract or qualifying master agreement;unsecured liabilities owed to another member of the same group as the relevant banking institution which are not owed in relation to derivatives, financial contracts or qualifying master agreements;liabilities which relate to a claim for damages or an award of damages or a claim under an indemnity.the arrangements which permit the person or the banking institution to set-off or net the liability also permit the person or the banking institution to set-off or net rights and liabilities with another person,the right of the person or the banking institution to set-off or net is exercisable only on the occurrence of a particular event;a liability is treated as if it is converted into a net debt, claim or obligation if the amount due in relation to the liability is reduced by reference to any sums which the debtor would be able to set off against the liability in the event that the debtor decided to exercise set-off or netting rights.(5) For the purposes of paragraph (3) , undertakings are in the same group if they are group undertakings in respect of each other, and “group undertaking” has the meaning given in section 1161(5) of the Companies Act 2006.the net debt, claim or obligation that would be due under the set-off arrangements, netting arrangements or title transfer collateral arrangements at the time the special bail-in provision providing for this is made, oran estimate of that net debt, claim or obligation.(1) In this Order “derivative” means a derivative as defined in Article 2(5) of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4th July 2012 on OTC derivatives, central counterparties and trade repositories F15as it had effect on the day on which the Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 were made . a contract for the purchase, sale, transfer or loan of a transferable security, a group of transferable securities or index of transferable securities;a repurchase or reverse repurchase transaction on any transferable security, group of transferable securities or index of transferable securities;a contract for the purchase, sale, transfer or loan of a commodity, a group of commodities or an index of commodities for future delivery;a swap or option on a commodity, a group of commodities or an index of commodities;a repurchase or reverse repurchase transaction on any such commodity, group or index;a futures contract, including a contract (other than a commodities contract) for the purchase, sale or transfer of property of any description under which delivery is to be made at a future date and at a price agreed when the contract is made.a derivative,a financial contract, or
- “the Act” means the Banking Act 2009;
- F16
“bail-in liability has the meaning given in section 2(1) of the Banking Act 2009 - “the Bank” means the Bank of England;
- “banking institution” means—
-
(a) a bank
; -
(b) an investment firm
; - (c) a banking group company;
-
(d) F11
a third-country institution (within the meaning of section 89JA of the Act (resolution of UK branches of third-country institutions) ) .
-
(a) a bank
... - “netting arrangements” has the meaning given in section 48P(2) of the Act;
- “relevant banking institution” has the meaning given in article 3(2) ;
- “set-off arrangements” has the meaning given in section 48P(2) of the Act;
- “title transfer collateral arrangements” has the meaning given in section 48P(2) of the Act;
- “transferable securities” has the meaning given in Article 4.1(44) of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments
, but does not include securities (within the meaning of section 14 of the Act ) issued by the relevant banking institution.
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