1428A. (1) In a winding up of a company that is an entity referred to in Regulation 2(1)(a) to (i) of the Bank Recovery and Resolution Regulations—

(a) the following shall be paid in priority to the claims of all unsecured creditors, and shall rank equally amongst themselves and with the debts referred to in section 621(2)—

(i) the part of eligible deposits up to the coverage level in Article 6 of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014³, and

(ii) deposit guarantee schemes that are subrogating to the rights and obligations of the holder or holders of the part of the eligible deposits referred to in subparagraph (i),

(b) the following shall be paid in priority to the claims of all unsecured creditors, but after those referred to in paragraph (a), and shall rank equally amongst themselves—

(i) the part of eligible deposits from natural persons and micro, small and medium-sized enterprises that exceeds the coverage level in Article 6 of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014³, and

(ii) deposits that would be eligible deposits from natural persons and micro, small and medium-sized enterprises were they not made through branches located outside the European Union of institutions established within the European Union,

(c) subject to subsection (3), the claims of all unsecured creditors, after those referred to in paragraphs (a) and (b), shall be paid in priority to the claims of unsecured creditors resulting from debt instruments where—

(i) the original contractual maturity of the debt instrument is not less than one year,

(ii) subject to subsection (2), the debt instrument contains no embedded derivatives and is not itself a derivative, and

(iii) the relevant contractual documentation and, where applicable, the prospectus related to the issuance of the debt instrument expressly refers to the lower ranking of claims in accordance with this paragraph,

and

(d) the claims of all unsecured creditors resulting from debt instruments that meet the conditions set out in paragraph (c) shall be paid in priority to claims resulting from F1007[the item listed in subparagraph (d)] of Regulation 87(1) of the Bank Recovery and Resolution Regulations.

F1008[(1A) Claims resulting from an instrument the whole or part only of which is recognised as an item listed in subparagraph (a), (b) or (c) of Regulation 87(1) of the Bank Recovery and Resolution Regulations shall rank lower than any claim that does not result from such instrument.]

(2) For the purposes of subparagraph (c)(ii) of subsection (1), debt instruments—

(a) with variable interest derived from a broadly used reference rate, or

(b) with the principal, repayment and interest denominated in the same currency that is not the domestic currency of the issuer,

shall not be considered to be debt instruments containing embedded derivatives solely because of those features.

(3) Notwithstanding the amendment of this Act by Regulation 4 of the European Union (Bank Recovery and Resolution) Regulations 2019 (S.I. No. 127 of 2019), this Act shall apply in respect of claims F1008[(other than claims referred to in subsection (1A))] resulting from debt instruments issued before the coming into operation of those Regulations as if it had not been so amended.

(4) In this section—

"company", in addition to the meaning assigned to that expression by section 2(1), includes an unregistered company referred to in section 1326;

"debt instruments" means bonds and other forms of transferable debt and instruments creating or acknowledging a debt;

"deposit guarantee scheme" has the meaning given to it in the Bank Recovery and Resolution Regulations;

"eligible deposits" has the meaning given to it in the Bank Recovery and Resolution Regulations and shall include a share account held with a building society or credit union;

"institution" has the meaning given to it in the Bank Recovery and Resolution Regulations;

"micro, small and medium-sized enterprises" has the meaning given to it in the Bank Recovery and Resolution Regulations.

(5) A word or expression that is used in this section and is also used in Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014², as amended by Directive (EU) 2017/2399 of the European Parliament and of the Council of 12 December 2017 F1009[and Directive (EU) 2019/879 of the European Parliament and of the Council of 20 May 2019¹⁷, shall have, in this section, the same meaning as it has in that Directive.]