A US no-action letter quietly clears a path for British bank bail-ins to proceed without securities registration

UK-resolution authorities can now restructure failing banks with US investors without triggering mandatory US securities registration. On 13 April 2026, the Bank of England issued a new operational guide to transfer resolution and updated its guide to bail-in resolution, the latter of which now includes expanded details on interim rights and share delivery post-bail-in. Crucially, the BoE secured a no-action letter from the US Securities and Exchange Commission confirming that the SEC’s Division of Corporation Finance will not recommend enforcement action if a firm exchanges bail-in securities for non-transferable Potential Rights to Onward Property or Proceeds (PROPPs), then later converts those PROPPs into ordinary shares without registering the transaction under the Securities Act of 1933. This relief applies only when supported by counsel’s opinion that the exemption under Securities Act Section 3(a)(9) is available. The confirmation removes a significant legal barrier to cross-border bank resolutions, enabling the BoE to execute bail-ins involving US investors without violating US securities law. SEC Chair Paul Atkins has instructed the Division to prepare a rulemaking recommendation for a permanent exemption for securities issued in regulatory bail-ins. Until then, foreign regulators and firms are encouraged to consult directly with the SEC staff on their bail-in processes. The no-action letter enables UK-resolution authorities to restructure failing banks with US investors without triggering mandatory US securities registration.