Section 135

This article applies for the purpose of determining the minimum requirement for a group institution. The amount of the institution's total liabilities must include total liabilities under any derivative contracts held by the institution. The Bank may determine a transitional period for an institution, during which time a transitional minimum requirement applies. The Bank may amend or revoke a determination under paragraph (2A), or determine a further transitional period in relation to an institution, at any time including where a previous transitional period has expired. Where the Bank determines a transitional period under paragraph (2A) or paragraph (2B), it must determine the transitional minimum requirement that applies during that period. The Bank may amend or revoke any determination under paragraph (2C) at any time. An assessment of total liabilities under a derivative contract must take account of the rights of the parties to the contract to set off or net under a netting arrangement. An eligible liability must be excluded from the amount of the institution's own funds and eligible liabilities if— the instrument that creates the liability is not issued or fully paid up; the liability is owed to, or secured or guaranteed by, the institution itself; the purchase of the instrument that creates the liability was funded directly or indirectly by the institution itself; the liability has a remaining maturity of less than one year; the liability arises from a derivative contract held by the institution; the liability arises from a deposit in respect of which the depositor's rights, in any proceedings relating to the insolvency of the institution, would be preferred to the rights of other creditors; or the instrument that creates the liability is governed by the law of a third country and the Bank is not satisfied that a decision by the Bank to convert or write down the liability would be effective under that law. For the purpose of paragraph (4)(d), where the instrument that creates the liability confers on a party to the instrument a right to the repayment of a sum before maturity, the maturity date is the first date on which that party would become entitled to repayment if the right were exercised. The determination— must be based on an assessment of the criteria set out in article 126(8)(a); and must take account of the minimum consolidated requirement. ... The Bank must make the assessment under paragraph (6)(a) in consultation with— the PRA, if the institution is a PRA-authorised person; the FCA, if the institution is any other UK authorised person.

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