Statutory Instruments
2020 No. 1188
Bank Levy
The Bank Levy (Loss Absorbing Instruments) Regulations 2020
Made
29th October 2020
Laid before the House of Commons
30th October 2020
Coming into force
22nd November 2020
The Treasury make the following Regulations in exercise of the powers conferred by paragraphs 15V(3)(b), 15V(4)(b), 15W(4)(b), 15W(7) and 15Y(2) of Schedule 19 to the Finance Act 2011( 1 ).
Citation, commencement and effect
1. —(1) These Regulations may be cited as the Bank Levy (Loss Absorbing Instruments) Regulations 2020 and come into force on 22nd November 2020.
(2) These Regulations have effect in relation to chargeable periods ending on or after 1st January 2021.
Interpretation
2. In these Regulations—
“Capital Requirements Regulation”( 2 ) has the meaning given in paragraph 30(4) of Schedule 19,
“ PRA Rulebook ” means the rulebook published by the Prudential Regulation Authority containing rules made by that Authority under the Financial Services and Markets Act 2000 as that rulebook has effect on 17 August 2022,
“relevant requirement” means—
a requirement imposed by the Bank of England—
a requirement imposed under article 92 or article 92a( 5 ) of the Capital Requirements Regulation,
in relation to requirements imposed by an authority in exercise of its regulatory functions under the law of a country or territory outside of the United Kingdom, a requirement imposed under a comparable scheme for a comparable purpose to paragraph (a) or (b) within that country or territory, and
“Schedule 19” means Schedule 19 to the Finance Act 2011.
Loss absorbing instruments issued by overseas subsidiaries
3. —(1) Equities and liabilities that meet the description set out in paragraph (2) are specified for the purposes of paragraph 15V(3)(b) of Schedule 19.
(2) So much of the equities and liabilities that—
(a) would have fallen within the definition of Tier one capital equities and liabilities within the meaning of paragraph 30 of Schedule 19, but
(b) do not fall within that definition because an amount in respect of those equities and liabilities was deducted—
(i) under Article 36 of Chapter 3 of the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook or Article 56(d) of the Capital Requirements Regulation, and
(ii) in respect of a loss absorbing instrument( 6 ) issued by a non-UK resident entity which is a subsidiary of a UK resident entity within paragraph 15W(5) of Schedule 19.
4. —(1) A loss absorbing capacity or recapitalisation requirement that meets the condition set out in paragraph (2) is specified for the purposes of paragraph 15V(4)(b) of Schedule 19.
(2) The requirement must be a relevant requirement.
5. —(1) The condition in paragraph (2) is specified for the purposes of paragraph 15W(4)(b) of Schedule 19.
(2) The instrument, or an asset representing the instrument, must be held by a UK resident entity for the purpose of satisfying a relevant requirement imposed on a member of the relevant group( 7 ).
6. —(1) The condition in paragraph (2) is specified for the purposes of paragraph 15W(7)(b) of Schedule 19.
(2) The liabilities are in issuance for the purpose of satisfying a relevant requirement imposed on a member of the relevant group.
Rebecca Harris
Maggie Throup
Two of the Lords Commissioners for Her Majesty’s Treasury
2011 c. 11 . Paragraphs 15V to 15Y were inserted into Schedule 19 by paragraph 2 of Schedule 9 to the Finance Act 2018 (c. 3) with effect for chargeable periods ending on or after 1st January 2021 so do not yet have effect. Paragraph 30(2) of Schedule 19 was amended by paragraph 9 of Schedule 9 to the Finance Act 2018.
OJ No. L 176, 27.6.2013, p 1. This Regulation has been amended by S.I. 2018/1401 and 2019/1232 with effect from immediately before IP completion day so do not yet have effect. IP completion day is defined in section 39 of the European Union (Withdrawal Agreement) Act 2020 (c. 1) .
2009 c. 1 . Section 3A was inserted by article 6 of S.I. 2014/3329 and amended by article 5 of S.I. 2016/1239 .
S.I. 2014/3348 . Part 9 was amended by regulation 41 of S.I. 2016/1239 . Part 9 has been amended by regulations 66 to 82 of S.I. 2018/1394 with effect from immediately before IP completion day so do not yet have effect.
Article 92a was amended by regulation 32 of S.I. 2019/1232 with effect from immediately before IP completion day so the amendment does not yet have effect.
“Loss absorbing instrument” is defined in paragraph 15V(2) of Schedule 19.
“Relevant group” is defined in paragraph 4(1) of Schedule 19.