Bank of England

April 10, 2026

Response of the Office of Chief Counsel
Division of Corporation Finance

Re:  Bank of England

We are responding to your letter dated April 10, 2026 addressed to Jonathan Ingram, Adam Turk, and Emma O’Hara. Capitalized terms have the same meanings as defined in your letter. In our view, the exchange of Bail-In Securities for ordinary shares, whether by use of interim securities such as the PROPPs or by a single exchange, constitutes an “offer” and “sale” of securities within the meaning of Securities Act Section 2(a)(3).

Based on the facts presented, the Division will not recommend enforcement action to the Commission if a Firm (1) exchanges its Bail-In Securities for non-transferable PROPPs and; (2) subsequently exchanges those PROPPs for ordinary shares in the resolved Firm without registration under the Securities Act, in reliance on your opinion of counsel that the exemption provided in Securities Act Section 3(a)(9) is available.

In reaching this no-action position, we note that:

• During a resolution event, the Bank of England will direct a Firm to write down all of its Bail-In Securities, some of which may be converted into ordinary shares of the resolved Firm.
• Pursuant to a published Bail-In Resolution Instrument, the Firm’s Bail-In Securities will be written down and exchanged for interim securities known as PROPPs.
• Only existing holders of Bail-In Securities will receive PROPPs and the PROPPs will not be tradable or transferable (save by operation of law, such as probate, intestate succession, or similar situations).
• The PROPPs will not be represented or evidenced by any certificate or other instrument of any kind, whether in definitive, global, or dematerialised form.
• Pursuant to an exchange ratio set forth in a Supplemental Bail-In Resolution Instrument, the existing PROPP Beneficiaries will exchange the PROPPs for ordinary shares in the resolved Firm.
• The issuer of the Bail-In Securities, the PROPPs and the ordinary shares will be the same or will be a wholly owned subsidiary of the issuer of the ordinary shares in the resolved Firm if the Bail-In Securities were wholly and unconditionally guaranteed by the issuer of the ordinary shares.

This no-action position is based on the representations made to the Division in your letter. Any different facts or conditions might require the Division to reach a different conclusion. Further, this no-action position expresses the Division’s position on enforcement action only and does not express any legal conclusion on the issues presented.

Sincerely,
 

Adam Turk
Deputy Chief Counsel

 

cc:   Michael P. Seaman (Chief Counsel)
       Jonathan A. Ingram (Deputy Chief Counsel)
       Emma O’Hara (Special Counsel)