Statement Summary
The Division of Corporation Finance has issued a no-action letter to the Bank of England concerning the registration requirements of the Securities Act of 1933 for bail-in powers exercised over failing UK banks or regulated investment firms. This action aims to clarify how U.S. securities laws apply to bail-in processes, enhancing regulatory certainty for both U.S. and global markets. U.S. investors could be affected by these emergency bail-in situations, which can occur rapidly.
In addition to this letter, the SEC plans to explore a rulemaking proposal for potential exemptions from registration for securities involved in bail-ins. The Division encourages international regulators and firms to discuss their bail-in frameworks to provide a more coordinated approach.
Original Statement
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. 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.
As detailed in the letter, the Division will not recommend enforcement action to the Commission if a firm does not register exchanges of securities under the Securities Act, in reliance on Section 3(a)(9), in connection with implementation of the bail-in mechanism described in the Bank of England’s request.
Bank of England (April 10, 2026), available at
