I have today laid before Parliament an update to the special resolution regime code of practice. This update accounts for the transposition of the Bank Recovery and Resolution Directive (BRRD) II; changes made to the special resolution regime as a result of onshoring, including removing references to the concept of state aid; and increasing alignment with the Bank of England and HM Treasury crisis management memorandum of understanding.
The special resolution regime code of practice provides industry and the wider public with important guidance on how UK authorities would use the tools provided by the special resolution regime to protect UK financial stability by resolving failing financial institutions in an orderly way.
This version of the code of practice reflects the transposition of BRRDII through provisions in the Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (SI 2020/1350). These provisions will come into effect on 28 December and update the UK’s resolution regime. The approach to transposition has been tailored to suit the UK’s resolution regime, and the code of practice provides further guidance on what this means for firms.
The UK authorities have taken all the action they can to mitigate risks of disruption to cross-border financial services at the end of the transition period. As part of this preparation, the Treasury has amended the code of practice where EU legislation, including the concept of state aid, was referenced previously.
As set out in the Banking Act 2009, the code of practice has been updated in consultation with the Bank of England, the Prudential Regulation Authority, the Financial Conduct Authority and the financial services compensation scheme.
The Treasury has also consulted the banking liaison panel, a group of industry stakeholders who represent the interests of banks, and who have expertise in law relating to the UK’s financial system and to insolvency law and practice.
This updated version of the code of practice will provide firms with the certainty and clarity they need by setting out how the UK’s resolution regime will operate following changes in legislation and as a result of the ending of the transition period.
The report has been published on gov.uk: https://www. gov.uk/government/publications/banking-act-2009-special-resolution-regime-code-of-practice-revised-march-2017.