HM Treasury publishes draft legislative clauses for RRP for non-banks
On 23 August 2012, HM Treasury published draft clauses together with an explanatory note, to inform responses to its ‘Financial sector resolution: broadening the regime’ consultation paper, published in August 2012 (see previous blogpost “HM Treasury Consultation: RRP for Financial Market Infrastructures” dated 8 August 2012), the purpose of which was to consult on extending RRP requirements to systemically important non-banks.
The draft clauses constitute proposed amendments to the Banking Act 2009 and the Financial Services and Markets Act 2000. They have been prepared on the basis that the Financial Services Bill 2012-13, as introduced to the House of Lords on 23 May 2012, has been enacted and is in force.
Broadly, the amendments seek to extend:
- the resolution objectives in relation to which the Treasury, FSA and BoE must have regarding when using the stabilisation powers, to include:
- the protection of client assets, and
- the minimisation of adverse effects on institutions that support the operation of financial markets (e.g. exchanges and clearing houses);
- stabilisation powers to the UK parent companies of banks, provided that certain conditions are met; and
- the special resolution regime established under the Banking Act 2009 to investment firms and UK clearing houses.