24.In the Explanatory Memorandum to these Regulations, HM Treasury (HMT) says that the Banking Act 2009 (“the 2009 Act”) established the UK’s Special Resolution Regime. This provides the Bank of England, the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and HM Treasury with tools to protect financial stability by effectively resolving failing banks and other institutions, while protecting depositors, client assets, taxpayers and the wider economy. The Bank Recovery and Resolution Directive (BRRD) of 2014 established a common approach within the EU to the recovery and resolution of banks and investment firms. The BRRD reflected the Financial Stability Board’s (FSB) Key Attributes of Effective Resolution Regimes for financial institutions (“the Key Attributes”). The 2009 Act was amended in 2014 as part of the UK’s implementation of the BRRD. HMT says that the Regulations are intended to ensure that the UK’s Special Resolution Regime is legally and practically workable on a standalone basis once the UK has left the EU. It states that, while the policy aims of the BRRD will remain a core element of this regime, providing conformity with the FSB’s Key Attributes, some changes are required to address places where UK legislation is deficient as a result of the UK’s withdrawal from the EU. We obtained additional information from HMT, in particular about the relationship between the UK’s Special Resolution Regime, the BRRD’s requirements and the FSB’s Key Attributes, and we are publishing this at Appendix 1.
25.The Public Lending Right Scheme (PLR) gives authors a right to receive payments from a central fund based on the number of times their books are lent out by public libraries. Eligibility to register for the PLR is dependent on an author’s residency, at the time of application, in an European Economic Area (EEA) State. “EEA State” is defined as a Member State of the EU, Norway, Iceland and Liechtenstein. After exit day, the UK will no longer be an EEA State. These regulations amend the reference to “EEA State” to ensure that authors resident in the UK will continue to be eligible to register for the PLR, as well as residents of a EEA State, following the UK’s exit from the EU. The Committee asked the Department for Culture, Media and Sport (DCMS) what impact this had on reciprocal rights post exit. DCMS stated that:
“some other EEA states have their own lending rights systems which may remunerate eligible authors for library lending in those states. However, not all such systems are run in the same way as in the UK (for instance, the eligibility for authors will vary from scheme to scheme). They are not therefore directly reciprocal to the UK’s PLR scheme and decisions about how these systems operate and whether UK-resident authors qualify for these after exit will be a matter for individual states rather than the EU/EEA as a whole. Nevertheless, as UK-resident authors benefit from library lending rights systems in other EEA states, we want to encourage those states to continue with these arrangements.”
DCMS has also explained that the Authors’ Licensing and Collecting Society (ALCS):
“… believes that ensuring the UK’s PLR scheme continue to remain open to residents of EEA states is important to supporting ALCS in continuing to work in partnership with relevant organisations in EEA states to ensure that the UK resident authors it represents can continue to benefit from such lending rights systems following the UK’s Exit from the EU …”.
9 In the Explanatory Memorandum, HM Treasury states that the resolution regime may cover banks, building societies, investment firms, banking group companies and central counterparties.
10 In a 2017 publication, the Bank of England says: “The need for a financial system to have an effective resolution framework is a key lesson from the global financial crisis of 2008. During the crisis, governments had to resort to ‘bailouts’ as some banks had become too big, complex, and interconnected to be put into insolvency like other types of firm… Resolution aims to change this by providing powers to impose losses on investors in failed banks while ensuring the critical operations of the bank can continue.” See The Bank of England’s approach to resolution (October 2017): [accessed 6 November 2018].
11 Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
12 The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. See: [accessed 6 November 2018].
13 Financial Stability Board, Key Attributes of Effective Resolution Regimes for Financial Institutions: [accessed 6 November 2018].