Consultation outcome

Bank Recovery and Resolution Directive (BRRD) implementation

Updated 3 November 2016

This was published under the 2015 to 2016 Cameron Conservative government

1. Introduction

The Bank Recovery and Resolution Directive (BRRD) establishes a common approach within the European Union (EU) to the recovery and resolution of banks and investment firms. The BRRD represents an important step forward in ensuring that the EU effectively addresses the risks posed by the banking system.

The UK’s special resolution regime (SRR) provides the Bank of England, the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and the Treasury with tools to protect financial stability by managing the failure of financial sector firms.

The SRR was recently updated to transpose the BRRD, following a consultation published in July 2014.

The government has since identified a small number of changes to the legislation that would clarify and strengthen the UK’s transposition of the BRRD. This consultation seeks industry views on the proposed measures.

In particular, the proposed new measures include:

• new powers for the Bank of England and the 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 the 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.
• new powers for the Bank of England to resolve a branch of a third country institution, independently of the third country resolution authority, where the relevant conditions are met.

In addition to these measures, the government intends to make further technical changes to clarify the measures transposing the BRRD. These are summarised in chapter 5.

A draft statutory instrument has been published alongside this consultation at www.gov.uk/treasury, containing the new contractual write-down and conversion provisions, the new early intervention powers, and the other changes summarised in chapter 5.

This draft legislation will be updated in light of consultation responses. In addition to the proposed changes to primary legislation published in these statutory instruments, the government also intends to make some consequential amendments to secondary legislation.

Subject to the outcome of the consultation, the government intends to introduce new powers for the Bank of England for independent resolution of branches, by applying the relevant chapters of Part 1 of the Banking Act 2009, with certain modifications.

This consultation seeks views on the new measures identified, and offers an opportunity to comment on the government’s proposed technical changes to the legislation transposing the BRRD.

The government’s assessment is that these measures do not impose a cost on business, and therefore no impact assessment has been prepared at this stage.

Further information on the assessment of why these measures do not impose a cost on business is included below.

Responses are requested by 25th February 2016. The government cannot guarantee that responses received after this date will be considered.

Responses can be sent by email to brrd.consultation@hmtreasury.gsi.gov.uk.

Alternatively, they can be posted to:

BRRD Consultation
Financial Stability
HM Treasury
1 Horse Guards Road
London SW1A 2HQ

When responding, please state whether you are doing so as an individual or representing the views of an organisation. If you are responding on behalf of an organisation, please make clear who the organisation represents and, where applicable, how the views of members were assembled.

This document is available at www.gov.uk/treasury. You may make copies of this document without seeking permission. Printed copies of the document can be ordered on request from the address below.

Confidentiality

Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes (these are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 1998 and the Environmental Information Regulations 2004).

If you would like the information that you provide to be treated as confidential, please mark this clearly in your response. However, please be aware that under the FOIA, there is a Statutory Code of Practice with which public authorities must comply and which deals, among other things, with obligations of confidence.

In view of this, it would be helpful if you could explain why you regard the information you provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances.

In the case of electronic responses, general confidentiality disclaimers that often appear at the bottom of emails will be disregarded unless an explicit request for confidentiality is made in the body of the response.

2. Contractual write-down and conversion

Early intervention and stabilisation measures are intended to return a firm to viability, or to stabilise a failing institution. The effectiveness of these measures would be undermined if they resulted in the termination of the firm’s key contracts.

As a result, section 48Z of the Banking Act 2009 ensures that a crisis prevention measure or crisis management measure (e.g. the application of the bail-in tool) will not trigger any default event provision in any contract to which an institution under resolution, its subsidiaries, or a member of the same group is a party, provided the firm continues to meet its substantive obligations in the contract (such as payment and delivery obligations).

However, there may be circumstances where it is advantageous for contracts to include clauses that are activated by the use of a crisis management measure or a crisis prevention measure.

This could include, for example, contractual bail-in instruments where the contract specifies that the instrument is written down or converted to the extent required on the occurrence of a specified event – for instance, upon a mandatory write-down of capital instruments under the Banking Act, or when the bail-in tool is applied to the firm.

There may also be benefits to certain service contracts specifying the terms on which services will continue to be provided following a resolution, which could be used to support operational continuity in a firm following resolution.

The government proposes to amend section 48Z of the Banking Act 2009 to ensure that such instruments can take effect in accordance with their terms, to the extent specified by the resolution authority (the Bank of England or Treasury as the case may be), on a case by case basis, to support the stabilisation of the firm.

In the draft Bank Recovery and Resolution Order 2016 published alongside this consultation, article 9 enables the Bank of England or Treasury, in a Part 1 instrument or share transfer order, to provide for default event provisions to take effect, or to take effect to the extent specified in the instrument or order.

The government believes that this measure will have no direct cost impact on firms, as this change addresses an issue with the breadth of the original legislation, and does not affect a significant number of existing contracts.

The government believes that this measure will indirectly benefit firms, in that it will give them additional options for meeting their minimum requirement for eligible liabilities (MREL).

Question 1:

Do you agree with the proposed approach to contractual write-down and conversion?

3. Early intervention powers

The BRRD requires that competent authorities have the ability to intervene in a firm that is at risk of failing, in order to attempt to reverse the decline and avoid failure.

Article 28 of the BRRD requires Member States to ensure that their competent authorities have the power to require the removal and replacement of the board of directors and the senior management of an institution.

This power may only be used where there is a significant deterioration in the financial situation of an institution, or where there are serious infringements of law, of regulations, or of the statutes of the institution, or serious administrative irregularities.

In addition, it can be used only where other early intervention measures, such as requiring the firm to implement elements of the recovery plan, are not sufficient to reverse the deterioration.

Article 29 of the BRRD requires that the competent authority is given a power to appoint one or more temporary administrators. This power may only be used where the power under Article 28 (the power to require the removal and replacement of the board of directors and the senior management) is deemed insufficient to remedy the situation.

The competent authority would specify the powers of the temporary administrator at the time of the appointment, based on what is proportionate in the circumstances.

In its June 2014 consultation on transposition to the BRRD, the government noted that the UK was already largely compliant with the requirements in the BRRD relating to early intervention powers, primarily through the powers in sections 55L and 55M of Financial Services and Markets Act 2000 (FSMA), which allow the PRA and FCA to impose requirements on authorised firms, and the approved persons regime.

Nonetheless, in order to provide clarity regarding the scope of the powers, the government proposes to introduce stand-alone powers for the regulators to require the removal and replacement of directors and senior managers in accordance with Article 28 of the BRRD, and to appoint temporary administrators in accordance with Article 29.

However, the government proposes to use the term “temporary manager” for individuals appointed for this purpose, to make clear that the institution is not in bank administration under the Banking Act 2009 or special administration under the Investment Bank Special Administration Regulations 2011 (as applicable), or administration under the Insolvency Act 1986.

Stand-alone powers to appoint temporary managers have additional advantages, in particular:

• Stand-alone powers ensure that temporary managers can be given appropriate legal protections to reflect their role acting in the public interest. These additional protections cannot be provided through the general powers.
• The BRRD is clear that crisis prevention measures, such as appointment of a temporary administrator, shall not per se trigger default event rights. The proposed new legislation amends section 48Z of the Banking Act 2009 to ensure the appointment of a temporary manager does not trigger default event rights. This will support the effectiveness of this early intervention measure.

In the draft Bank Recovery and Resolution Order 2016 published alongside this consultation, article 15 inserts new sections to Part 5 of FSM, which provide the regulator with powers to require the removal and replacement of directors and senior management and to appoint temporary managers.

Article 9(2) of the Order amends s48Z of the Banking Act 2009 to provide that the appointment of a temporary manager does not trigger default event rights.

For the purposes of the proposed standalone powers, a “senior manager” is defined as a person who:

• exercises executive functions within a specified relevant firm; and
• is responsible and directly accountable to the directors, for the day to day management of the firm.

This approach to the definition of “senior manager” is in line with the approach proposed in the 2014 consultation, and with the definition of “senior management” in point (25) of Article 2(1) of the BRRD.

A “director” includes, in relation to an undertaking with no board of directors, a member of the equivalent management body responsible for the management of the undertaking concerned.

In response to the 2014 consultation, some respondents requested clarity on what was meant by “directly accountable to the board”. Staff directly accountable to the board will include those staff who report directly to the board (such as staff performing the risk management function described in Article 76(5) of Directive 2013/36/EU)), and staff directly accountable to a committee of the board (such as the risk or audit committees).

Other respondents also asked whether the power to require senior managers to be removed or replaced applied only to senior managers for which direct fault could be established.

The BRRD requires that the competent authority can require the removal or replacement of the senior management of the institution, either in its entirety or with regard to individuals, where there is a significant deterioration in the financial situation of an institution, where there are serious infringements of law, regulations or the statutes of the institution, or serious administrative irregularities.

Therefore, there is no ‘direct fault’ test prescribed in the BRRD, though these powers can only be used where measures under Article 27 BRRD are not sufficient to reverse the deterioration.

Under the proposed procedure for the exercise of the power to require the removal or replacement of directors and senior managers, the firm and each relevant director or senior manager will have the opportunity to make representations to the regulator and the right to refer the matter to the Tribunal.

Two respondents also commented that changes to senior management may have an effect on the day to day running of the business and the ability to successfully implement actions necessary in resolution.

Any use of these powers would be in order to remedy the firm’s deteriorating position and to avoid the firm failing, and the regulators would take such considerations into account when determining the appropriate course of action.

 Question 2:

Do you support the inclusion of specific powers for the PRA and FCA to appoint a temporary manager, and the proposals to extend section 48Z of the Banking Act 2009 to cases in which a temporary manager is appointed’?

 Question 3:

Do you agree with the government’s proposal to use the term “temporary manager” rather than “temporary administrator”?

In addition, the government intends to ensure that the PRA and FCA can themselves convene a meeting of shareholders, if they have required the management body of the failing firm to do so, and the management body has failed to comply with that requirement.

This is in accordance with Article 27(1) of the BRRD. This is provided for in article 14 of the draft Order, which would insert s55PB into FSMA.

The government’s assessment is that the introduction of these early intervention measures will impose no additional direct costs to business.

The rationale for this was published as part of an earlier BRRD transposition impact assessment, which accords with the European Commission’s own impact assessment on BRRD measures.

In summary, costs would only arise if these powers were exercised by the PRA or the FCA (in which case, costs would arise for the firm in question). However, the actions taken would be an attempt to restore the firm to viability, and therefore the government judges it very unlikely that the net effect would be a cost to the firm.

4. Branches of third country institutions

The Banking Act 2009 provides for the Bank of England to exercise resolution powers over the assets, rights or liabilities of a third country institution, in support of resolution action by the institution’s home resolution authority.

This ensures that the Bank of England can take actions such as transferring assets located in the UK to the foreign equivalent of a bridge bank or ensuring that liabilities governed by English law can be written down in a bail-in.

The Bank of England has the right to refuse to recognise third country resolution proceedings in certain circumstances, as set out in section 89H(4) of the Banking Act 2009.

Circumstances where the Bank of England may refuse to recognise a third country resolution include cases where recognition would have an adverse effect on financial stability in the UK or another EEA state, or where UK or other EEA creditors would not receive the same treatment as creditors who are located in the third country concerned and have similar legal rights.

Article 96 of the BRRD requires that where an EEA resolution authority has refused to recognise third country resolution proceedings or where the third country resolution authority has not commenced resolution proceedings which affect the branch, and action is in the public interest, the EEA resolution authority has the powers necessary to act in relation to the branch, independently of the third country resolution authority.

The view of the government and of the Bank of England is that cases where independent action is needed will be exceptional.

There is significant work underway at international level, primarily through the firm-specific crisis management groups, to ensure that resolution authorities co-operate in the case of cross-border banks.

This includes drawing up and agreeing ex ante resolution plans, and co-operation agreements which set out the roles and responsibilities of each authority.

Powers to act independently in relation to the UK branch of a third country institution are therefore “back-stop” powers to be used in the event that this co-operation proves ineffective, and where action is required to protect the public interest.

This is consistent with the FSB’s Key Attributes of Effective Resolution Regimes, which recognise the need for resolution authorities to have, as a fall back option, the ability to take independent action with respect to local operations of foreign banks in certain circumstances.

In its July 2014 consultation on transposition of the BRRD, the government asked what powers the Bank of England should have when acting independently to resolve a branch, and how to define the assets, rights and liabilities of a branch for the purposes of applying resolution tools to them.

Responses to this consultation were mixed, with some suggesting that the Bank of England should have full resolution powers, and others that the Bank of England’s resolution powers should be more limited.

The government has now drawn up more specific proposals to ensure there are adequate powers in place for the independent resolution of a branch.

Subject to the outcome of the consultation, the government intends to introduce these new powers by applying the relevant chapters of Part 1 of the Banking Act 2009, with certain modifications.

The proposed modifications are described below. The government also proposes to make appropriate modifications for investment firms.

Resolution powers

The government proposes to make the following stabilisation powers available to the Bank of England, when acting independently to resolve a UK branch of a third country institution:

• powers to transfer some or all of the assets, rights and liabilities (“the business of the branch”) to a private sector purchaser, to a bridge bank or to an asset management vehicle (AMV)
• the power to bail in liabilities in connection with the transfer to the private-sector purchaser, the bridge bank, or the AMV

Transferring the business of the branch could be achieved without the support of the third country authority. Following the transfer to a private sector purchaser, a bridge bank or an AMV, bail-in could be used to recapitalise that entity as necessary.

The government does not propose to introduce standalone bail-in powers. Bailing in the liabilities of the branch itself is unlikely to be an effective stabilisation tool, given that the branch has no legal identity of its own.

Therefore, section 12A and related provisions of the Banking Act 2009 would be disapplied where the Bank of England is acting independently to resolve a third country branch.

Similarly, the government proposes not to introduce powers to put branches into temporary public ownership (TPO). TPO is a resolution tool intended as a “last resort” stabilisation option for use only where there is serious risk to the financial stability of the UK.

It can only be applied to banks and holding companies, not to other banking group companies. As such, it would not be appropriate to use TPO powers for independent resolution of a branch, which has no legal identity of its own.

The government therefore proposes to disapply sections 9 and 13 of the Banking Act 2009 where the Bank of England is acting independently to resolve a third country branch.

The government does not intend to extend share transfer powers to independent resolutions of UK branches, as the branch itself is not a separate legal entity.

Question 4:

Do you agree that the proposed transfer and bail-in powers could be an effective way to resolve a branch independently of the third country resolution authority?

Question 5:

What, if any, further resolution powers could be effective in an independent resolution of a UK branch of a third country institution?

The ‘business of the branch’

For the Bank of England to have property transfer powers over the business of the branch, it must be specified which assets, rights and liabilities fall within this definition.

In response to the initial consultation, several respondents suggested using the PRA branch return form. The branch return form is essentially a ‘balance sheet’ statement of the assets and liabilities attributed to the branch, to be submitted to the PRA twice a year.

However, the government is of the view that this would not be a suitable basis for defining the business of a branch.

The branch return does not contain information in relation to non-financial items that could be important in maintaining operational continuity, and (as a PRA document which may change from time to time) does not provide sufficient stability as the basis for defining the scope of legislative powers.

Instead, the government proposes the following definitions:

• “UK branch” means a branch situated in the United Kingdom of a third country institution authorised for the purpose of the Financial Services and Markets Act 2000 by the PRA or FCA.
• “third country institution” has the meaning given by Article 2.1 (86) of the BRRD.
• business of a UK branch” means –
  • Any property in the United Kingdom of the relevant third country institution, and
  • Any rights and liabilities of the relevant third country institution arising as a result of the operations of a UK branch.

The proposed amendments to the Banking Act 2009 will provide that the Bank of England may only exercise transfer and bail-in powers over the business of a UK branch where it is necessary to do so having regard to the public interest in advancing the special resolution objectives.

This condition will have the practical effect of limiting the scope of the Bank of England’s powers to what is proportionate in order to safeguard the UK public interest.

For example, Article 1 Protocol 1 of the European Convention on Human Rights (A1P1) provides that the right of a person (such as a bank creditor or a shareholder) to the peaceful enjoyment of his property should only be interfered with where that interference is necessary in the public interest and a proportionate balance is struck between wider public interests and the protection of a person’s interests in his property.

This means that where the exercise of these transfer and bail-in powers interferes with rights protected by A1P1, the Bank of England will be required to act proportionately (i.e. to strike the right balance between pursuing the statutory objectives of resolution and the protection of relevant rights).

Question 6:

Do you have any comments on the proposed definition of the ‘business of the branch’?

Conditions for use

The government proposes placing the following four conditions on the use of these powers:

Condition 1:

That the relevant third country institution is failing or likely to fail, that is:

• it is failing, or likely to fail, to satisfy the threshold conditions (specified in section 55B(1) of FSMA 2000) in circumstances where that failure would justify the variation or cancellation by the PRA under section 55J of FSMA 2000 of the institution’s permission under Part 4A of that Act to carry on one or more regulated activities in the United Kingdom,
• it is unable or unwilling to pay its debts or other liabilities owed to EEA creditors or otherwise arising from the business of a UK branch as they fall due and the Bank of England is satisfied that no third country resolution action or normal insolvency proceedings have been initiated in relation to such institution, or
• paragraph (b) will, in the near future, apply to the third country institution

Condition 2:

that it is not reasonably likely that action will be taken by or in respect of the third country institution that will result in Condition 1 ceasing to be met:

 Condition 3:

that making the property transfer instrument is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives;

 Condition 4: that –

• third country resolution action has been taken, or the Bank of England has been notified that such action will be taken, in relation to the third country institution, and the Bank of England has or proposes to refuse to recognise such action for one or more of the reasons specified in section 89H(4) of the Banking Act 2009 (recognition of third country resolution actions), or
• Third country resolution action has not been, and is not likely to be, taken in relation to the third country institution.

These conditions would be set out in the implementing legislation as modifications to section 7 of the Banking Act 2009.

The government proposes that the Bank of England would be able to use independent resolution powers only if:

• The Treasury has approved the making of an instrument,
• The PRA or the FCA (as the case may be) is satisfied that Condition 1 is met, and
• The Bank of England is satisfied that Conditions 2, 3 and 4 are met.

Before determining whether or not Conditions 2 or 3 are met, the Bank of England must consult the PRA, the FCA, and the Treasury.

Question 7:

Do you have any comments on the proposed conditions for making a property transfer instrument under the proposed new powers for independent resolution of branches?

Safeguards and compensation arrangements

The government proposes that those safeguards that apply in connection with the exercise of the property transfer and bail-in powers for firms established in the UK should extend to the application of powers in connection with branches.

These safeguards are described in Chapter 8 of the Code of Practice , see too sections 47 and 48 and 49 to 62 of the Banking Act 2009.

Compensation measures are important to ensure that a proportionate balance is struck between wider public interests and protection of a person’s interests in his property, and hence the compatibility of the actions of the authorities under the special resolution regime with A1P1 of the European Convention on Human Rights. In addition, the “no creditor worse off” safeguard is intended to reassure creditors of a bank that their position will not be prejudiced as a result of the bank being stabilised compared with the position they would have been in had the bank entered into insolvency.

Therefore, the government proposes also to extend the compensation arrangements (including the “no creditor worse off” safeguard) that apply when the Bank of England stabilises a UK firm to any case where the Bank of England acts independently to resolve a third country branch.

Calculation of “no creditor worse off” compensation requires an independent valuer to be appointed, to assess the “actual treatment” of the shareholder or creditor as a result of the resolution, and the treatment that the shareholder or creditor of the failing bank would have received had the bank been put into insolvency rather than stabilised (“the insolvency treatment”).

Therefore, determining what, if any, “no creditor worse off” compensation is due in the event of an independent stabilisation of a UK branch of a third country institution would require identification of the appropriate insolvency treatment, to act as the scenario against which compensation is calculated.

In the event of the failure of a third country firm, several options are available in relation to a UK branch if it were to go into insolvency.

Firstly, the business of the branch may be dealt with in accordance with the third country insolvency law and the assistance of the local courts (i.e. courts in the relevant part of the UK) may be sought to support actions in relation to the business.

Secondly, and more exceptionally, branches may be wound up as unregistered companies under local insolvency law, for instance where the foreign company’s centre of main interest is identified as being in the UK or where serious prejudice would otherwise arise for local creditors.

The appropriate action will vary from case to case, and there is a balance to be struck between providing certainty for creditors as to what scenario would be used to identify the insolvency treatment, and reflecting the fact that, in practice, branch business may be dealt with in different ways depending on the specific circumstances.

The government proposes that the insolvency treatment against which “no creditor worse off” compensation would be calculated is that of an insolvency where the proceeds are returned to the third country liquidator for distribution in accordance with third country insolvency law, except where this is to the serious detriment of local creditors, in which case the counterfactual scenario would be a local winding up.

The government proposes this approach on the basis that it best reflects what would be expected to happen in the event that the third country institution underwent insolvency.

Under the proposed approach, the Treasury would have the discretion to determine whether the local insolvency law should be applied for the purposes of assessing the insolvency treatment, instead of third country law.

It may exercise this discretion itself, or task the independent valuer with this role.

Again, the government is of the view that these measures will impose no direct costs on firms. When firms are brought within scope of resolution powers, costs for firms are generally considered to arise from higher funding costs from banks, as creditors demand higher rates of return to compensate from the fact that debt instruments are more likely to suffer losses in resolution.

However, it is the government’s view that the measures proposed here do not increase the likelihood of a firm entering resolution or becoming insolvent, since it is a back-stop power that would only be used in very particular circumstances (and those circumstances include that the firm is failing).

The assumption would remain that, if the firm were to fail, the third country institution (including the UK branch) would be resolved under the third country resolution regime, or would be subject to insolvency without the intervention of the Bank of England in this way.

As such, these measures will not increase the funding costs for third country firms with branches in the UK.

Question 8:

Do you agree to the proposed extension of the safeguards?

Question 9:

Do you agree that the insolvency treatment against which “no creditor worse off” compensation should be calculated is the third country insolvency law, except where this is to the serious detriment of local creditors?

Question 10:

Do you agree that HMT should have the discretion to determine (whether themselves or by tasking the valuer with this role) if local insolvency law should be applied for the purposes of assessing the insolvency treatment instead of third country law?

5. Draft legislation

A draft statutory instrument, the draft Bank Recovery and Resolution Order 2016, has been published alongside this consultation. It makes further amendments to the legislation transposing the BRRD.

Articles 9, 14 and 15 of the draft Bank Recovery and Resolution Order 2016 are discussed in chapters 2 and 3 of this consultation. These changes, and other minor and consequential amendments, and corrections of omissions, are summarised below.

The powers for the Bank of England to act independently resolve a branch of a third country institution will be introduced by applying the relevant chapters of Part 1 of the Banking Act 2009, with certain modifications, to achieve the result outlined in Chapter 4 of this consultation.

In addition, the government plans to make changes to the Companies Act 2006 in order to complete the transposition of Article 121(2) of the BRRD. Article 121(2) amends Article 5 (information prior to the general meeting) of the Shareholder Rights Directive (2007/36/EC) to align this provision with the BRRD.

Explanation	Article
Interpretation of Part 1 of the Banking Act 2009: clarifies references to “director” in the Banking Act, for undertakings with no board of directors	3
Removal of impediments to the exercise of the stabilisation powers etc: removes express references to “investment firms” in section 3A(8) of the Banking Act 2009, as section 89A already applies Part 1 to investment firms	4
Cases where mandatory write-down, conversion etc applies: Amends s6A(6)(b) of the Banking Act 2009 to clarify that the relevant valuation should only inform the assessment of how much to write-down or convert etc	5
General conditions: Amends s7(5C) of the Banking Act to clarify that the relevant valuation should only inform the assessment of whether the conditions for resolution are met	6
Resolution company: share transfers and reverse share transfer: clarifies scope of provision for the Bank of England to make onward and reverse share transfers from a bridge bank	7
Bridge bank: asset and liability transfers from subsidiary banks
Ensures the Bank of England has the same flexibility to deal with a subsidiary bank of a bridge bank as is the case in relation to institutions in the same group as an entity that has been transferred into public ownership	8
Termination rights etc: changes provisions around default event rights. See chapters 2 and 3 of this consultation for further details	9
Independent valuation: provides flexibility for the Bank to require a firm under resolution to reimburse the Bank in relation to costs incurred in relation to an independent valuer under Article 36 of the BRRD	10
Restrictions on disclosure of confidential information: extends the application of the provisions concerning the disclosure of confidential information to temporary managers, appointed under the proposed new powers	11
Bank administration: makes a consequential amendment to Part 3 of the Banking Act to extend it to asset management vehicles (consequential on the introduction of the asset management tool in the initial transposition of the BRRD)	12
General meeting: enables the regulator to call a general meeting if the authorised person has been required to do so, but has not done so. (See chapter 3)	14
Removal of directors and senior management and appointment of temporary managers:
See chapter 3 of this consultation	15
Contribution to costs of special resolution regime: Amends FSMA s214B to ensure primary legislation aligns with the requirements in Article 109 of BRRD	16
Restrictions on disclosure of confidential information: see temporary manager measures (see chapter 3 of this consultation)	17
Supervisory notices: notices required for the removal of directors and senior management and appointment of temporary managers will be treated as “supervisory notices” under FSMA	18
Meaning of Investment Firm: drafting clarification to the definition of ‘investment firm’ in Article 2 of the Banking Act 2009 (Exclusion of Investment Firms of a Specified Description) Order 2009	19
Determination of minimum requirement: Amends the Bank Recovery and Resolution (No. 2) Order 2014 to make a technical clarification to the determination of minimum requirements of eligible liabilities (MREL)	20
Shadow Directorship: updates Bank Recovery and Resolution (No. 2) Order 2014 provisions on shadow directorships to take account of temporary managers	21