Prudential Regulation Authority Rulebook

1.1

Unless otherwise stated, this Part applies to a BRRD undertaking which is:

1. (1) a CRR firm;
2. (2) a financial holding company;
3. (3) a mixed financial holding company; or
4. (4) a mixed activity holding company which has at least one subsidiary which is an institution which is not the subsidiary of a financial holding company which is also a subsidiary of the mixed activity holding company.

1.1A

In this Part, 2.1 to 2.3 shall not apply from 28 December 2020 until IP completion day.

1.2

In this Part, the following definitions shall apply:

debt instrument

means any form of transferable debt security or instrument, whether registered or bearer, including commercial paper, bills of exchange, bankers acceptances, certificates of deposit and bonds, including additional tier 1 instruments and tier 2 instruments.

eligible deposit

has the meaning given in point 4 of Article 2(1) of Directive 2014/49/EU.

excluded deposit

means

1. (1) an eligible deposit from natural persons and micro, small and medium-sized enterprises; or
2. (2) a deposit that would be an eligible deposits from natural persons or micro, small and medium-sized enterprises if the deposit had not been made through a branch of the firm located in a third country.

excluded liability

means any liability listed in section 48B(8) of the Banking Act 2009 except, in respect of liabilities created after 31 July 2016, a liability shall not be regarded as secured for the purposes of section 48(B)(8)(b) of the Banking Act 2009 if, at the time at which it is created, it is not a fully secured liability.

fully secured liability

means a liability which, at the time it is created, is fully secured and governed by contractual terms that oblige the debtor to maintain the liability fully collateralised on a continuous basis in compliance with regulatory requirements of EU law or of the law of a third country achieving effects that can be deemed equivalent to EU law.

IP completion day

has the meaning given in section 39(1) of the European Union (Withdrawal Agreement) Act 2020.

liability

means any debt or liability to which the BRRD undertaking is subject, whether it is present or future, certain or contingent, ascertained or sounding only in damages.

mandatory reduction provision

has the meaning give in section 6B(2) of the Banking Act 2009.

material amendment

means an amendment to an agreement, including an automatic amendment, which affects the substantive rights and obligations of a party to the agreement. Amendments which are not material amendments include a change to the contact details of a signatory or the addressee for the service of documents, typographical changes to correct drafting errors or automatic adjustment to interest rates.

micro, small and medium-sized enterprises

means micro, small and medium-sized enterprises as defined with regard to the annual turnover criterion referred to in Article 2(1) of the Annex to Commission Recommendation 2003/361/EC.

phase two liability

means an unsecured liability that is not a debt instrument.

special bail-in provision

has the meaning given in section 48B(1) of the Banking Act 2009.

unsecured liability

means

1. (1) in respect of liabilities created on or before 31 July 2016, a liability under which the right of the creditor to payment or other form of performance is not (i) secured by a charge, pledge, lien or mortgage, or (ii) subject to other collateral arrangements, including liabilities arising from repurchase transactions and other title transfer collateral arrangements; and
2. (2) in respect of liabilities created after 31 July 2016, a liability that is not a fully secured liability.

1.3

Unless otherwise defined, any italicised expression used in this Part and in the CRR has the same meaning as in the CRR.