§ 122 — Meaning of “worse off as a result of the resolution”

122.—(1) In this Division, a pre‑resolution creditor or pre‑resolution shareholder of a Division 11 FI under resolution is worse off as a result of the resolution if, by reason of one or more of the actions mentioned in subsection (2) taken in relation to the Division 11 FI, the pre‑resolution creditor or pre‑resolution shareholder has received, is receiving or is likely to receive less favourable treatment than what the pre‑resolution creditor or pre‑resolution shareholder would have received had winding up proceedings been commenced against the Division 11 FI immediately before the resolution date.(2) In subsection (1), the actions are —(a)

any resolution action;

(b)

the issue of a reverse transfer certificate under section 71 or any action taken under that certificate; and

(c)

the issue of an onward transfer certificate under section 73 or any action taken under that certificate.

(3) In any of the following cases, it is a rebuttable presumption that a pre‑resolution creditor or pre‑resolution shareholder of a Division 11 FI under resolution is not worse off as a result of the resolution:(a)

the liability or instrument concerned is transferred to a transferee under section 67 and the transferee is subject to the same terms for that liability or instrument as those to which the Division 11 FI under resolution was subject;

(b)

the liability or instrument concerned is transferred under section 67 and is then transferred back to the Division 11 FI under section 71, and the Division 11 FI is subject to the same terms for that liability or instrument as it was subject to immediately before the transfer under section 67;

(c)

the liability or instrument concerned is transferred under section 67 and is then transferred to a 2nd transferee under section 73, and the 2nd transferee is subject to the same terms for that liability or instrument as those to which the Division 11 FI under resolution was subject;

(d)

the only resolution action to which the Division 11 FI is subject is the issue of a bail‑in certificate within the meaning of Division 6 or any action under the certificate, and the instrument or liability concerned is not one to be bailed in under that certificate;

(e)

the only resolution action to which the Division 11 FI is subject is the making of an order under Division 9, and the pre‑resolution creditor or pre‑resolution shareholder is eligible for compensation under the law of a foreign country or territory by reason of the resolution to which the order gives effect.

—(1) In this Division, a pre‑resolution creditor or pre‑resolution shareholder of a Division 11 FI under resolution is worse off as a result of the resolution if, by reason of one or more of the actions mentioned in subsection (2) taken in relation to the Division 11 FI, the pre‑resolution creditor or pre‑resolution shareholder has received, is receiving or is likely to receive less favourable treatment than what the pre‑resolution creditor or pre‑resolution shareholder would have received had winding up proceedings been commenced against the Division 11 FI immediately before the resolution date.

(2) In subsection (1), the actions are —(a)

any resolution action;

(b)

the issue of a reverse transfer certificate under section 71 or any action taken under that certificate; and

(c)

the issue of an onward transfer certificate under section 73 or any action taken under that certificate.

(3) In any of the following cases, it is a rebuttable presumption that a pre‑resolution creditor or pre‑resolution shareholder of a Division 11 FI under resolution is not worse off as a result of the resolution:(a)

the liability or instrument concerned is transferred to a transferee under section 67 and the transferee is subject to the same terms for that liability or instrument as those to which the Division 11 FI under resolution was subject;

(b)

the liability or instrument concerned is transferred under section 67 and is then transferred back to the Division 11 FI under section 71, and the Division 11 FI is subject to the same terms for that liability or instrument as it was subject to immediately before the transfer under section 67;

(c)

the liability or instrument concerned is transferred under section 67 and is then transferred to a 2nd transferee under section 73, and the 2nd transferee is subject to the same terms for that liability or instrument as those to which the Division 11 FI under resolution was subject;

(d)

the only resolution action to which the Division 11 FI is subject is the issue of a bail‑in certificate within the meaning of Division 6 or any action under the certificate, and the instrument or liability concerned is not one to be bailed in under that certificate;

(e)

the only resolution action to which the Division 11 FI is subject is the making of an order under Division 9, and the pre‑resolution creditor or pre‑resolution shareholder is eligible for compensation under the law of a foreign country or territory by reason of the resolution to which the order gives effect.