PRA has transposed Article 55 of the Bank Recovery and Resolution Directive (BRRD) through the rules in the Contractual Recognition of Bail-in part of the PRA Rulebook. The rules require firms and holding companies to include a term in the provisions governing third-country law liabilities under which the creditor recognises and agrees that the liability may be subject to the exercise of the bail-in tool by the bank as the resolution authority. PRA phased in its requirement, making it applicable to unsecured debt instruments, additional tier 1 instruments and tier 2 instruments from 19 February 2015 and to all other relevant liabilities from 1 January 2016. PRA has now offered firms who apply for it a modification by consent to delay the rules’ application to phase 2 liabilities where impracticable, while it prepares to consult on amending the rules in this way. This modification is valid until the earlier of 30 June 2016, or when the relevant rules are amended or revoked. (Source: PRA Modifies Contractual Recognition of Bail-In)