The PRA has launched a consultation on its Contractual Recognition of Bail-in (CROB) and Stay in Resolution (Stays) Rules. The proposals will support the UK’s transposition of the Bank Recovery and Resolution Directive II (BRRD II) which must be in place by 28 December 2020.
The proposals would:
- temporarily suspend part of the CROB Part of the PRA Rulebook with effect from 28 December 2020 until 31 December 2020 (Implementation Period (IP) completion day).
- reinstate the existing CROB Part, with minor amendments, to come into force immediately after IP completion day. The new Rules post-IP completion day would be otherwise unchanged from the existing Rules. The amendment proposed in this CP, is a minor change to reflect the statutory reference to the Banking Act definition of ‘excluded liability’ in the Contractual Recognition Part of the PRA Rulebook. The reinstated CROB Rules would therefore be updated to account for the SI amendments.
- amend the Stay in Resolution Part of the PRA Rulebook to reflect the temporary SI change to the definition of ‘crisis management measure’ in the Banking Act 2009, to come into force from 28 December 2020 until IP completion day; and
- reintroduce the existing ‘Stay in Resolution’ Part, as it was before 28 December 2020, to come into force immediately after IP completion day.
The consultation closes on 30 November 2020.