IFPRU 11 applies to:

1. (1)

   an IFPRU 730k firm that is not subject to supervision on a consolidated basis;

2. (2)

   a firm that is an RRD group member;

3. (3)

   a qualifying parent undertaking that is an RRD group member; and

4. (4)

   a qualifying parent undertaking that is a mixed activity holding company of an IFPRU 730k firm.

This chapter does not apply to:

1. (1)

   a PRA authorised person;

2. (2)

   an RRD group member that is:

   1. (a)

      a qualifying parent undertaking of a PRAauthorised person; and

   2. (b)

      subject to supervision on a consolidated basis by the PRA; and

3. (3)

   a qualifying parent undertaking that is a mixed activity holding company of a PRA authorised person.

This chapter does not apply to a firm that is incorporated in, or formed under the law of, a third country.2

This section applies to an IFPRU 730k firm that is not subject to supervision on a consolidated basis.

A firm must draw up and maintain a recovery plan.

[Note: article 5(1) of RRD]

If a firm is a significant IFPRU firm, its recovery plan must include the information in IFPRU 11 Annex 1R (Contents of recovery plans for significant IFPRU firms and group recovery plans for groups that include significant IFPRU firms).

[Note: article 5(5) of RRD]

If a firm is not a significant IFPRU firm its recovery plan must include:

1. (1)

   a summary of the key elements of the recovery plan;

2. (2)

   information on the governance of the firm, including:

   1. (a)

      how the recovery plan is integrated into the corporate governance of the firm; and

   2. (b)

      the firm's overall risk management framework;

3. (3)

   a description of the legal and financial structures of the firm, including:

   1. (a)

      the core business lines; and

   2. (b)

      critical functions;

4. (4)

   recovery options, including:

   1. (a)

      capital and liquidity actions required to maintain or restore the viability and financial position of the firm; and

   2. (b)

      arrangements and measures to conserve or restore the firm'sown funds;

5. (5)

   an assessment of the expected timeframe for implementing recovery options;

6. (6)

   a summary of the overall recovery capacity of the firm, including:

   1. (a)

      the risks associated with recovery options;

   2. (b)

      an analysis of any material impediments to the effective and timely execution of the recovery plan; and

   3. (c)

      whether and how material impediments could be overcome;

7. (7)

   a summary of any material changes to the recovery plan since the previous version was sent to the FCA;

8. (8)

   preparatory measures the firm has taken or plans to take to help implement the recovery plan; and

9. (9)

   the measures which the firm could take if it has infringed an RRD early intervention condition or is likely to infringe one of those conditions in the near future.

[Note: articles (4)(1), 5(5) and Annex A of RRD]

A firm must not assume any access to, or receipt of, extraordinary public financial support in its recovery plan.

[Note: article 5(3) of RRD]

If the recovery plan includes the use of central bank facilities, the firm must:

1. (1)

   include an analysis of how and when the firm may apply for the use of central bank facilities; and

2. (2)

   identify those assets which would be expected to qualify as collateral.

[Note: article 5(4) of RRD]

A firm must:

1. (1)

   include a framework of indicators in its recovery plan which identify when it may take appropriate actions in the plan;

2. (2)

   ensure the recovery plan indicators can be monitored easily; and

3. (3)

   have arrangements to monitor the recovery plan indicators regularly.

1A firm must notify the FCA without delay of a decision to take an action referred to in its recovery plan, whether or not the relevant indicator has been met.

A firm must notify the FCA without delay of a decision not 1 to take an action referred to in its recovery plan1where the relevant indicator has been met.1

[Note: article 9(1) of RRD]

A firm must ensure its management body assesses and approves the recovery plan before sending it to the FCA.

[Note: article 5(9) of RRD]

A firm must demonstrate to the FCA that:

1. (1)

   carrying out its recovery plan is reasonably likely to maintain or restore the viability and financial position of the firm, taking into account the preparatory measures that the firm has taken, or plans to take; and

2. (2)

   its recovery plan:

   1. (a)

      is reasonably likely to be carried out quickly and effectively in situations of financial stress; and

   2. (b)

      avoids, to the maximum extent possible, any significant adverse effect on the financial system, including in scenarios which would lead other RRD institutions to implement recovery plans and group recovery plans at the same time.

[Note: article 6(1) of RRD]

1. (1)

   A significant IFPRU firm must update its recovery plan at least annually.

2. (2)

   A firm that is not a significant IFPRU firm must update its recovery plan at least once every two years.

3. (3)

   A firm must also update its recovery plan after a change to any of the following which could materially affect its recovery plan:

   1. (a)

      its legal or organisational structure;

   2. (b)

      its business; or

   3. (c)

      its financial situation.

[Note: articles 4(1)(b) and 5(2) RRD]

A firm must send its recovery plan to the FCA in line with SUP 16.20 (Recovery plans and information for resolution plans).

[Note: article 6(1) of RRD]

This section applies to:

1. (1)

   a firm that is the UK parent undertaking2 of an RRD group; and2

2. (2)

   a qualifying parent undertaking that is the UK parent undertaking2 of an RRD group; 2

3. (3)

   [deleted]2

A firm or qualifying parent undertaking must draw up and maintain a group recovery plan.

[Note: article 7(1) of RRD]

The group recovery plan must:

1. (1)

   consist of a plan for the recovery of the RRD group as a whole; and

2. (2)

   identify measures the group may need to implement at the level of:

   1. (a)

      the UK parent undertaking2; and

   2. (b)

      each individual subsidiary.

[Note: article 7(1) of RRD]

The group recovery plan must include arrangements to ensure the coordination and consistency of measures for each RRD group member2.

[Note: article 7(4) of RRD]

The group recovery plan must:

1. (1)

   aim to stabilise the RRD group as a whole and each RRD institution in the group, when the group, or any RRD institution in the group, is under financial stress;

2. (2)

   aim to address or remove the causes of the financial stress and restore the financial position of the group or the RRD institution in question; and

3. (3)

   at the same time consider the financial position of other group members.

[Note: article 7(4) of RRD]

The group recovery plan must include the information in IFPRU 11 Annex 1R (Recovery plans for significant IFPRU firms and group recovery plans for groups that include significant IFPRU firms) if the RRD group:

1. (1)

   includes an IFPRU 730k firm that is a significant IFPRU firm; or

2. (2)

   does not include an IFPRU 730k firm.

[Note: articles 5(5) and 7(5) of RRD]

If the RRD group includes an IFPRU 730k firm that is not a significant IFPRU firm (and does not include an IFPRU 730k firm that is a significant IFPRU firm) the group recovery plan must include:

1. (1)

   a summary of the key elements of the group recovery plan;

2. (2)

   information on the governance of the group, including:

   1. (a)

      how the group recovery plan is integrated into the corporate governance of the group; and

   2. (b)

      the group's overall risk management framework;

3. (3)

   a description of the legal and financial structures of the group members covered by the plan, including:

   1. (a)

      the core business lines; and

   2. (b)

      critical functions;

4. (4)

   recovery options, including:

   1. (a)

      capital and liquidity actions required to maintain or restore the viability and financial position of the group; and

   2. (b)

      arrangements and measures to conserve or restore the own funds of each RRD institution in the group on an individual and a consolidated basis;

5. (5)

   an assessment of the expected timeframe for implementing recovery options;

6. (6)

   a summary of the overall capability of the group to restore its financial position following a significant deterioration, including:

   1. (a)

      the risks associated with recovery options;

   2. (b)

      an analysis of any material impediments to the effective and timely execution of the group recovery plan; and;

   3. (c)

      whether and how those impediments could be overcome;

7. (7)

   a summary of any material changes to the group recovery plan since the previous version was sent to the 2consolidating supervisor;

8. (8)

   preparatory measures the group has taken, or plans to take, to help implement the group recovery plan; and

9. (9)

   the measures which the group could take if any RRD institution in the group infringes an RRD early intervention condition or is likely to infringe one of those conditions in the near future.

[Note: articles (4)(1), 5(5), 7(5) and Annex A of RRD]

A firm or qualifying parent undertaking must not assume any access to, or receipt of, extraordinary public financial support in its group recovery plan.

[Note: articles 5(3) and 7(5) of RRD]

If the group recovery plan includes the use of central bank facilities, the firm or qualifying parent undertaking must:

1. (1)

   include an analysis of how and when members of the group may apply for the use of central bank facilities; and

2. (2)

   identify those assets which would be expected to qualify as collateral.

[Note: articles 5(4) and 7(5) of RRD]

A firm or qualifying parent undertaking must:

1. (1)

   include a framework of indicators in its group recovery plan which identify when it, or another group member, may take appropriate actions in the plan;

2. (2)

   ensure the group recovery plan indicators can be monitored easily; and

3. (3)

   have arrangements to monitor the group recovery plan indicators regularly.

1A firm or qualifying parent undertaking must notify the FCA without delay of a decision to take an action referred to in its recovery plan, whether or not the relevant indicator has been met.

A firm or qualifying parent undertaking must notify the FCA without delay of a decision not 1to take an action referred to in the group recovery plan1where the relevant indicator has been met.1

[Note: article 9(1) of RRD]

1. (1)

   A firm that is a UK parent undertaking2 or a qualifying parent undertaking must ensure that its management body assesses and approves the group recovery plan before sending it to its consolidating supervisor.

2. (2)

   [deleted]2

[Note: article 7(7) of RRD]

A firm or qualifying parent undertaking must demonstrate to its consolidating supervisor that:

1. (1)

   carrying out its group recovery plan is reasonably likely to maintain or restore the viability and financial position of RRD institutions in the group, taking into account the preparatory measures that the group has taken, or plans to take; and

2. (2)

   its group recovery plan:

   1. (a)

      is reasonably likely to be carried out quickly and effectively in situations of financial stress; and

   2. (b)

      avoids, to the maximum extent possible, any significant adverse effect on the financial system, including in scenarios which would lead other RRD institutions to implement recovery plans and group recovery plans at the same time.

[Note: article 6(1) of RRD]

1. (1)

   A firm or qualifying parent undertaking must update the group recovery plan at least:

   1. (a)

      annually, if the group:

      1. (i)

         includes an IFPRU 730k firm that is a significant IFPRU firm; or

      2. (ii)

         does not include an IFPRU 730k firm; or

   2. (b)

      once every two years, if the group includes an IFPRU 730k firm that is not a significant IFPRU firm.

2. (2)

   A firm or qualifying parent undertaking must also update its group recovery plan after a change to any of the following which could materially affect the group recovery plan:

   1. (a)

      its legal or organisational structure;

   2. (b)

      its business; or

   3. (c)

      its financial situation.

[Note: articles 4(1)(b), 5(2) and 7(5) of RRD]

1. (1)

   A firm or qualifying parent undertaking must send the group recovery plan to its 2consolidating supervisor.

2. (2)

   A2firm or qualifying parent undertaking must send the group recovery plan in line with SUP 16.20 (Recovery plans and information for resolution plans).

[Note: articles 6(1) and 7(1) of RRD]

This section applies to:

1. (1)

   an IFPRU 730k firm that is not subject to supervision on a consolidated basis;

2. (2)

   a firm that is the UK parent undertaking of an RRD group; and1

3. (3)

   a qualifying parent undertaking that is the UK parent undertaking of an RRD group.1

4. (4)

   [deleted]1

This section only applies if the Bank of England is the resolution authority of the firm or group.

A firm or qualifying parent undertaking must send the information in IFPRU 11 Annex 2R (Resolution plan information) to the FCA in line with SUP 16.20 (Recovery plans and information for resolution plans).

[Note: article 11(1)(b) of RRD]

A firm or qualifying parent undertaking must notify the FCA without delay of a change to any of the following which could have materially affect the information in IFPRU 11 Annex 2R (Resolution plan information):

1. (1)

   its legal or organisational structure;

2. (2)

   its business; or

3. (3)

   its financial situation.

[Note: article 10(6) second paragraph of RRD]

This section applies to:

1. (1)

   a firm that is an RRD group member;

2. (2)

   a qualifying parent undertaking that is an RRD group member; and

3. (3)

   a qualifying parent undertaking that is a mixed activity holding company of an IFPRU 730k firm in an RRD group.

1. (1)

   The following must apply to their consolidating supervisor for approval of any proposed RRD group financial support agreement or of any amendment to that agreement:

   1. (a)

      a firm that is the UK parent undertaking3 of an RRD group;

   2. (b)

      a qualifying parent undertaking that is the UK parent undertaking3 of an RRD group; and

   3. (c)

      [deleted]3

2. (2)

   An application for the approval or amendment of an RRD group financial support agreement must:

   1. (a)

      include the proposed RRD group financial support agreement; and

   2. (b)

      identify the members in the RRD group that are intended to be a party to the agreement.

[Note: article 20(1) of RRD]

The parties to an RRD group financial support agreement must include:

1. (1)

   one or more of the following:

   1. (a)

      [deleted]3

   2. (b)

      a UK parent institution3;

   3. (c)

      a financial holding company;

   4. (d)

      a mixed financial holding company;

   5. (e)

      a mixed activity holding company; and

2. (2)

   one or more subsidiaries of the group member in (1) which is an RRD institution or a financial institution.

Before entering into an RRD group financial support agreement, a firm or qualifying parent undertaking must ensure that:

1. (1)

   the RRD group financial support agreement includes principles for the calculation of the consideration for any support made under it;

2. (2)

   these principles include a requirement that the consideration is set when the financial support is given;

3. (3)

   each party acts freely and in its own best interests in entering into the RRD group financial support agreement;

4. (4)

   each party acts in its own best interests in deciding the consideration for the financial support;

5. (5)

   each party giving financial support has full disclosure of relevant information from any party receiving financial support before deciding:

   1. (a)

      the consideration for the support; and

   2. (b)

      to give the support; and

6. (6)

   only the parties to the agreement can exercise any right, claim or action arising from the RRD group financial support agreement.

[Note: articles 19(7)(a) to (c) and 19(9) of RRD]

When entering into the proposed RRD group financial support agreement, a firm or qualifying parent undertaking must ensure that none of the parties:

1. (1)

   has infringed an RRD early intervention condition; or

2. (2)

   is likely to infringe one of those conditions in the near future.

[Note: article 19(8) of RRD]

1. (1)

   The principles for calculating the consideration for financial support do not need to take account of any anticipated temporary impact on market prices arising from events external to the group.

2. (2)

   The consideration for financial support may take account of information that the party giving the support has, based on:

   1. (a)

      the party giving support being in the same group as the party receiving the support; and

   2. (b)

      the information not being available to the market.

[Note: article 19(7)(d) and (e) of RRD]

A firm or qualifying parent undertaking must not give financial support using an RRD group financial support agreement unless it is satisfied that:

1. (1)

   there is a reasonable prospect that giving the support will significantly redress the financial difficulties of the group member receiving the support;

2. (2)

   the support has the objective of preserving or restoring the financial stability of:

   1. (a)

      the group as a whole; or

   2. (b)

      any members of the group;

3. (3)

   the support is in the interests of the group member giving the support;

4. (4)

   the support is given on terms which meet the conditions in IFPRU 11.5.9 R to IFPRU 11.5.12 R;

5. (5)

   there is a reasonable prospect, based on information available to the management body of the group member giving the support when it takes the decision to grant support, that:

   1. (a)

      the consideration for the support will be paid;

   2. (b)

      if the support is in the form of a loan, the group member receiving the support will reimburse the loan; and

   3. (c)

      if the support is in the form of a guarantee or any form of security, the group member receiving the support will reimburse the amount of the guarantee or security if the guarantee or security is enforced;

6. (6)

   the support will not jeopardise the liquidity or solvency of the group member giving the financial support;

7. (7)

   the support will not create a threat to financial stability, 3in the United Kingdom;

8. (8)

   the group member giving the support complies with the following when giving the support:

   1. (a)

      the requirements of the UK provisions which implemented the articles of the3CRD relating to capital and liquidity;

   2. (b)

      any requirements imposed under the UK provisions which implemented3 article 104(2) (additional own funds requirements) of the CRD; and

   3. (c)

      the requirements relating to large exposures in the UK CRR and the UK provisions which implemented the3CRD;

9. (9)

   the support will not cause the group member giving the support to infringe any of the requirements in (8) as a result of giving the financial support; and

10. (10)

    the support will not undermine the resolvability of the group member giving the support.

[Note: article 23(1) of RRD]

A firm or qualifying parent undertaking intending to give financial support must ensure that:

1. (1)

   its management body takes the decision to give group financial support using an RRD group financial support agreement; and

2. (2)

   it is a reasoned decision that sets out:

   1. (a)

      the objective of the proposed support; and

   2. (b)

      how the support complies with the conditions for giving group financial support using an RRD group financial support agreement in IFPRU 11.5.14 R.

A firm or qualifying parent undertaking intending to receive financial support must ensure that its management body takes the decision to accept the support using an RRD group financial support agreement.

[Note: article 24 of RRD]

A firm or a qualifying parent undertaking intending to give financial support using an RRD group financial support agreement must ensure that its management body notifies:

1. (1)

   its competent authority;

2. (2)

   where different, its consolidating supervisor; and3

3. (3)

   where different, the competent authority of the group member receiving the financial support.3

4. (4)

   [deleted]3

A firm or a qualifying parent undertaking must:

1. (1)

   send a notice of an intention to give financial support before the financial support is given; and

2. (2)

   include in the notice:

   1. (a)

      the reasoned decision referred to in IFPRU 11.5.16 R of the management body of the group member intending to give the support; and

   2. (b)

      details of the proposed financial support including a copy of the RRD group financial support agreement.

[Note: article 25(1) of RRD]

An RRD group member may only give financial support using an RRD group financial support agreement if the FCA has:

1. (1)

   agreed to the giving of the support with restrictions; or

2. (2)

   agreed to the giving of the support without restrictions; or

3. (3)

   not prohibited the support within five business days of receiving a notice of intention to give financial support.

[Note: article 25(2) and (5) of RRD]

1A firm or qualifying parent undertaking1must ensure it sends the decision of its management body to give financial support to:

1. (1)

   its competent authority;

2. (2)

   where different, its consolidating supervisor; and3

3. (3)

   where different, the competent authority of the group member receiving the support.3

4. (4)

   [deleted]3

[Note: article 25(6) of RRD]

A firm or qualifying parent undertaking must:

1. (1)

   make public:

   1. (a)

      whether or not they have entered into an RRD group financial support agreement;

   2. (b)

      a description of the general terms of any RRD group financial support agreement; and

   3. (c)

      the names of the group members that are a party to the RRD group financial support agreement; and

2. (2)

   update the information in (1) at least annually.

[Note: article 26 of RRD]

This section applies to:

1. (1)

   an IFPRU 730k firm that is not subject to supervision on a consolidated basis;

2. (2)

   a firm that is an RRD group member;

3. (3)

   a qualifying parent undertaking that is an RRD group member; and

4. (4)

   a qualifying parent undertaking that is:

   1. (a)

      a mixed activity holding company of an IFPRU 730k firm; and

   2. (b)

      does not hold an RRD institution using an intermediate financial holding company or mixed financial holding company.

1. (1)

   If a liability meets the conditions in (2), a firm or qualifying parent undertaking must include a term in the contract governing the liability which states that the creditor or party to the agreement creating the liability:

   1. (a)

      recognises that the liability may be subject to write-down and conversion powers; and

   2. (b)

      agrees to be bound by any of the following actions of the Bank of England3 in relation to that liability:

      1. (i)

         reduction of principal or outstanding amount due; or

      2. (ii)

         conversion; or

      3. (iii)

         cancellation.

2. (2)

   The contractual recognition of a bail-in requirement in (1) applies to a liability that is:

   1. (a)

      governed by the law of a third country that is not an EEA State3;

   2. (b)

      issued or entered into after 1 January 2016;

   3. (ba)

      2issued or entered into before 1 January 2016 but materially amended after 9 December 2016;

   4. (c)

      of a type that is not excluded under article 44(2) of RRD;

   5. (d)

      not a deposit of a type referred to in point (a) of article 108 of RRD; and

   6. (e)

      not a liability which the Bank of England3 has determined can be subject to write-down and conversion powers by the Bank of England3 under:

      1. (i)

         the law of a third country; or

      2. (ii)

         a binding agreement concluded with that third country.

3. (3)

   3The contractual recognition of bail-in requirement in (1) also applies to a liability that is:

   1. (a)

      governed by the law of an EEA State;

   2. (b)

      issued or entered into after IP completion day4;

   3. (c)

      issued or entered into before IP completion day4 but materially amended after IP completion day4;

   4. (d)

      of a type that is not excluded under article 44(2) of RRD;

   5. (e)

      not a deposit of a type referred to in point (a) of article 108 of RRD; and

   6. (f)

      not a liability which the Bank of England has determined can be subject to write-down and conversion powers by the Bank of England under:

      1. (i)

         the law of an EEA State; or

      2. (ii)

         a binding agreement concluded with that EEA State.

[Note: article 55(1) of RRD]

This section applies to:

1. (1)

   an IFPRU 730k firm that is not subject to supervision on a consolidated basis;

2. (2)

   a firm that is an RRD group member;

3. (3)

   a qualifying parent undertaking that is an RRD group member; and

4. (4)

   a qualifying parent undertaking that is a mixed activity holding company of an IFPRU 730k firm.

A firm or qualifying parent undertaking must notify the FCA immediately if its management body considers that any of the following have occurred:

1. (1)

   the assets of the firm or qualifying parent undertaking have become less than its liabilities; or

2. (2)

   the firm or qualifying parent undertaking is unable to pay its debts or other liabilities as they fall due; or

3. (3)

   there are objective reasons to support a determination that (1) or (2) will occur in the near future; or

4. (4)

   extraordinary public financial support is needed for the firm or qualifying parent undertaking, except if it takes any of forms allowed by section 7(5E) of the Banking Act 2009.

A firm must also notify the FCA immediately if its management body considers that:

1. (1)

   the firm is failing to satisfy any of the threshold conditions, including due to the firm having incurred, or being likely to incur, losses that will deplete all, or a significant amount of, its own funds; or

2. (2)

   there are objective elements to support a determination that the firm will fail to satisfy any of the threshold conditions in the near future.

[Note: article 81(1) of RRD]

A firm or qualifying parent undertaking must notify the FCA by sending an e-mail to its usual supervisory contact.