Section 83

This Chapter applies where, in relation to a relevant group— the PRA or FCA is the consolidating supervisor; and the PRA or FCA (or each of them) receives from the UK parent undertaking an application for authorisation of a group financial support agreement (“the application”). In this Chapter— ... “conditions for financial support” means the following conditions— there is a reasonable prospect that the financial support provided significantly redresses the financial difficulties of the group entity receiving the financial support; the provision of financial support has the objective of preserving or restoring the financial stability of the group as a whole or any of the entities of the group and is in the interests of the group entity providing the financial support; the financial support is provided on terms, including consideration, in accordance with Article 19.7 of the recovery and resolution directive; there is a reasonable prospect, on the basis of the information available to the management body of the group entity providing financial support at the time when the decision to grant financial support is taken, that the consideration for the support will be paid and, if the financial support is given in the form of a loan, that the loan will be reimbursed, by the group entity receiving the financial support; if the financial support is given in the form of a guarantee or any form of security and the guarantee or the security is enforced, the condition referred to in paragraph (d) shall apply to the liability arising for the recipient; the provision of the financial support would not jeopardise the liquidity or solvency of the group entity providing the financial support; the provision of the financial support would not create a threat to financial stability in the United Kingdom; the group entity providing the financial support complies, at the time the financial support is provided, with— the requirements relating to capital or liquidity imposed by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to the capital requirements directive; and the requirements imposed by or under legislation upon which the United Kingdom relied immediately before IP completion day to meet its obligations with respect to Article 104.2 of the capital requirements directive, and the provision of the financial support shall not cause the group entity to infringe those requirements, unless the group entity is authorised by the appropriate regulator on an individual basis; the provision of the financial support would not undermine the resolvability of the group entity providing the financial support. “financial support” includes— a loan, a guarantee, the provision of assets for use as collateral or any combination of these forms of support; and provision for support (in any form) in one or more transactions or in a transaction entered into by the group institution which is the intended recipient of the support and any other person; “group entity” means a relevant parent undertaking or group subsidiary which proposes to enter into the group financial support agreement; “group financial support agreement” means an agreement— which is proposed for the provision of financial support to a group institution which, at any time after the agreement has been concluded, meets the conditions for early intervention; and the parties to which include a relevant parent undertaking and one or more group subsidiaries set up in any country , other than the United Kingdom, in which the relevant parent undertaking is set up; “group institution” means a group entity which is an institution; “group subsidiary” means an undertaking which is— a subsidiary of a relevant parent undertaking; and an institution or financial institution; “relevant competent authority” means a competent authority, other than the consolidating supervisor, which has authorised a group entity; and “relevant parent undertaking” means a UK parent institution, a financial holding company, a mixed financial holding company or a mixed activity holding company. The PRA and the FCA may each make technical standards relating to conditions (a), (c), (f) and (i) of the definition of “conditions for financial support” provided in paragraph (2) in so far as those conditions apply to a group financial support agreement submitted to it by a UK parent undertaking.

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