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FCA Art. 55 last-minute no-action

On 30 December 2015 the Central Waivers Team of the FCA published a “modification by consent” of its Article 55 BRRD transposition, which itself came into force on 1 January 2016. Although acting to disapply IFPRU 11.6.3R, the modification direction replicates the short-term waiver issued by the PRA on 25 November 2015, enabling an agreed stay of compliance while the FCA prepares a consultation on a more permanent modification of the rules for contractual recognition of bail-in.

In those cases where, in respect of certain liabilities, compliance is “impracticable” firms may apply to the FCA for a disapplication of the obligation. It the request is granted, the modification will remain valid until the earlier of 30 June 2016, or the amendment/revocation of the relevant rules. As with the PRA version, confirmation of grant will be made in writing and published on the Financial Services Register. Despite the very short notice, requests for modification are likely to be a popular option, market participants will await clarification of what “impracticable” means to map the actual extent of their obligation.

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