The UK Government and the Prudential Regulation Authority (“PRA”) have both launched consultation papers on the transposition of the Banking Recovery and Resolution Directive (“BRRD”), which member states are obliged to transpose into national laws by 31 December 2014 and apply from 1 January 2015. The consultations are relevant to banks, building societies, large investment firms, financial holding companies, mixed financial holding companies and mixed-activity holding companies. The HM Treasury consultation covers only some aspects of transposition, including recovery and resolution planning, intra- group support, valuation, bail-in and write-down of capital instruments. Draft legislation on certain issues is also included. HM Treasury proposes that the Bank of England will be the UK resolution authority (as per the UK Banking Act 2009), the PRA and the Financial Conduct Authority (“FCA”) will be the designated national regulators and that HM Treasury will be the competent ministerial authority for the purposes of the BRRD. The Government’s consultation closes on 28 September 2014.
The PRA is proposing changes to both its current rules and its supervisory statement (which sets out the PRA’s expectations of firms), covering recovery plans, resolution packs, intra-group financial support agreements, notification of failure or likely failure and contractual recognition of bail-in. The PRA consultation closes on 19 September 2014 and the PRA intends to publish a policy statement with feedback, final rules and an updated supervisory statement before the end of the year. The PRA notes that any proposals may be affected by the technical standards and guidelines still being prepared at EU level.
The HM Treasury consultation paper is available at:
The PRA consultation paper is available at: