Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

Article 28 Assessment of feasibility: financial resources

Resolution authorities shall consider at least the following issues in assessing whether there are potential impediments to resolution related to financial resources:

  1. (1)

    matters addressed in paragraphs (m), (n), (o) and (q) of Schedule 2B to the Bank Recovery and Resolution (No 2) Order 2014;

  2. (2)

    the need to identify and quantify the amount of any liabilities which are likely under the preferred resolution strategy not to contributing to loss absorption or recapitalisation, considering at a minimum the following factors:

    1. (i)

      maturity;

    2. (ii)

      subordination ranking;

    3. (iii)

      the types of holders of the instrument, or the instrument's transferability;

    4. (iv)

      legal impediments to loss absorbency such as lack of recognition of resolution tools under foreign law or existence of set-off rights;

    5. (v)

      other factors creating risk that the liabilities would be exempted from absorbing losses in resolution;

    6. (vi)

      the amount and issuing legal entities of qualifying eligible liabilities or other liabilities which would absorb losses;

  3. (3)

    the size of funding needs in the run-up to and during resolution, the availability of sources of funding, and impediments to the transfer of funds as required within the institution or group;

  4. (4)

    whether appropriate arrangements are specified for losses to be transferred to legal entities to which resolution tools would be applied from other group companies, including where relevant an assessment of the amount and loss-absorbency of intragroup funding.