Section 89JA(5)

For section 7 (general conditions), substitute— The Bank of England may make a property transfer instrument in respect of a UK branch only if the Treasury has approved the making of the instrument, and one of the following applies— the PRA (or in the case of a third-country institution which is FCA-regulated, the FCA) is satisfied that Condition 1 is met, and the Bank of England is satisfied that Conditions 2, 4 and 5 are met, or the Bank of England is satisfied that Conditions 3 and 4 are met, or the Bank of England is satisfied that Condition 4 is met and Condition 5 is met by virtue of subsection 6(a). Condition 1 is that the third-country institution is failing or likely to fail. Condition 2 is that, having regard to timing and other relevant circumstances, it is not reasonably likely that action will be taken by or in respect of the third-country institution that will result in Condition 1 ceasing to be met. Condition 3 is that— the third-country institution is unable or unwilling, or is likely in the near future to be unable or unwilling, to pay its debts or other liabilities owed to UK creditors or otherwise arising from the business of the UK branch as they fall due, and no third-country resolution action has been taken, no normal insolvency proceedings have been initiated, and no such action or proceedings are likely in the near future to be taken or initiated, in relation to the institution. Condition 4 is that making a property transfer instrument is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives. Condition 5 is that— third-country resolution action has been taken, or the Bank of England has been notified that such action will be taken, in relation to the third-country institution and the Bank has refused or proposes to refuse to recognise such action for one or more of the reasons specified in section 89H(4), or third-country resolution action has not been, and is not likely to be, taken in relation to the third-country institution. For the purposes of Condition 1, a third-country institution is failing or likely to fail if it is failing, or is likely to fail, to satisfy the threshold conditions in circumstances where that failure would justify the variation or cancellation by the PRA (or in the case of an FCA-regulated third-country institution, the FCA) under section 55J of the Financial Services and Markets Act 2000 of the institution's permission under Part 4A of that Act to carry on one or more regulated activities in the United Kingdom. “The threshold conditions” means the threshold conditions, as defined by subsection (1) of section 55B of the Financial Services and Markets Act 2000, for which the PRA (or in the case of an FCA-regulated third-country institution, the FCA) is treated as responsible under subsection (2) of that section. For the purposes of Condition 3— “UK creditor”, in relation to a third-country institution, means a creditor of the institution who— in the case of an individual, is ordinarily resident in the United Kingdom; and in the case of a body corporate or unincorporated association, has its head office in the United Kingdom. For the purposes of Conditions 3 and 5, “third-country resolution action” has the meaning given in section 89H(7). Before determining that Condition 1 is met, the PRA (or in the case of an FCA-regulated third-country institution, the FCA) must consult the Bank of England. Before determining whether or not Condition 2 or 4 is met the Bank of England must, subject to subsection (13), consult— the PRA, the FCA, and the Treasury. In the case of an FCA-regulated third-country institution, the Bank of England need only consult the PRA before determining whether or not Condition 2 or 4 is met if the third-country institution has as a member of its immediate group a PRA-authorised person.

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Source: legislation.gov.uk · retrieved 2026-09-04