Statement Regarding Staff No-Action Letter to Bank of England

Today, the Division of Corporation Finance issued a no-action letter to the Bank of England regarding application of the registration requirements of the Securities Act of 1933 if the Bank exercises its statutory bail-in powers with respect to a U.K. bank or a U.K. regulated investment firm that is failing or likely to fail.[1]

One of my priorities as Chairman is for the SEC to provide regulatory clarity and certainty for how the U.S. federal securities laws apply to a foreign jurisdiction's bail-in processes. Clarity and certainty are important to both the U.S. and global markets because these bail-in processes are inherently an emergency and can occur over a single weekend. U.S. investors may own securities in the foreign bank subject to the bail-in.

I am pleased that the Division has issued the letter in response to the Bank of England's request. However, there is a wide range of bank bail-in frameworks used globally. To account for these various frameworks and to provide for a more certain and authoritative solution, I have instructed the Division to prepare a rulemaking recommendation to the Commission regarding a potential exemption from the Securities Act's registration requirements, for securities offered and sold in connection with a regulatory bail-in.

Until the Commission takes up any such rulemaking, I encourage other foreign regulators and regulated firms to contact the Division to discuss their particular bail-in processes or frameworks.

Thank you to the Commission staff who evaluated the Bank's request and prepared the Division's letter.