Financial Services (Banking Reform) Bill (HC Bill 2)

Financial Services (Banking Reform) BillPage 20

(5) The Treasury may by notice in writing to the Bank require it to publish
in such manner as it thinks fit such information relating to the accounts
of a qualifying company as the Treasury may specify in the notice.

(6) The information specified in a notice under subsection (5) may include
5information which as a result of a direction under subsection (1) was
excluded from accounts prepared in accordance with the Companies
Act 2006.

(7) The Treasury must consult the Bank before giving a notice under
subsection (5).

(8) 10A direction under subsection (1) or a notice under subsection (5) may
be revoked by a subsequent direction or notice (as the case may be).

(9) “Qualifying company” means any company which is wholly owned by
the Bank other than—

(a) the Prudential Regulation Authority, or

(b) 15a company which is a bridge bank for the purposes of section
12(3) of the Banking Act 2009.

(10) For the purposes of subsection (9), a company is wholly owned by the
Bank if—

(a) it is a company of which no person other than the Bank or a
20nominee of the Bank is a member, or

(b) it is a wholly-owned subsidiary of a company within paragraph
(a).

Final provisions

16 Orders and regulations

(1) 25Any power of the Treasury to make an order or regulations under this Act is
exercisable by statutory instrument.

(2) A statutory instrument containing regulations under section 8 (building
societies: power to make provision about ring-fencing) may not be made unless
a draft of the instrument has been laid before, and approved by a resolution of,
30each House of Parliament.

(3) A statutory instrument containing an order under section 18 (transitional
provisions and savings) is subject to annulment in pursuance of a resolution of
either House of Parliament, unless the instrument is required by any
enactment to be laid in draft before, and approved by a resolution of, each
35House.

17 Interpretation

In this Act—

  • “enactment” includes—

    (a)

    an enactment contained in subordinate legislation,

    (b)

    40an enactment contained in, or in an instrument made under, an
    Act of the Scottish Parliament,

    (c)

    an enactment contained in, or in an instrument made under, a
    Measure or Act of the National Assembly for Wales, and

    Financial Services (Banking Reform) BillPage 21

    (d)

    an enactment contained in, or in an instrument made under,
    Northern Ireland legislation;

  • “the FCA” means the Financial Conduct Authority;

  • “FSMA 2000” means the Financial Services and Markets Act 2000;

  • 5“the PRA” means the Prudential Regulation Authority.

18 Transitional provisions and savings

(1) The Treasury may by order make such provision as they consider necessary or
expedient for transitory, transitional or saving purposes in connection with the
commencement of any provision made by or under this Act.

(2) 10An order under this section may—

(a) confer functions on the FCA or the PRA;

(b) modify, exclude or apply (with or without modifications) any
enactment (including any provision of, or made under, this Act).

19 Extent

15The provisions of this Act extend to England and Wales, Scotland and
Northern Ireland, except that the amendments made by section 9 (preferential
debts: Great Britain) have the same extent as the enactments amended.

20 Commencement and short title

(1) Sections 16 to 19 and this section come into force on the day on which this Act
20is passed.

(2) The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.

(3) Different days may be appointed for different purposes.

(4) This Act may be cited as the Financial Services (Banking Reform) Act 2013.

Financial Services (Banking Reform) BillPage 22

Section 7

Schedule Ring-fencing transfer schemes

1 Part 7 of FSMA 2000 (control of business transfer schemes) is amended as
follows.

2 5For “the authorised person concerned”, wherever occurring in Part 7
(including Schedule 12), substitute “the transferor concerned”.

3 (1) Section 103A (meaning of “the appropriate regulator”) is amended as
follows.

(2) In subsection (1), in paragraph (a), for “a scheme” substitute “a ring-fencing
10transfer scheme or a scheme (other than a ring-fencing transfer scheme)”.

(3) At the end of subsection (2) insert—

(d) in the case of a ring-fencing transfer scheme, means the body
to whose business the scheme relates.

4 In section 106 (banking business transfer schemes), at the end of subsection
15(1)(c) insert “or a ring-fencing transfer scheme”.

5 After section 106A insert—

106B   Ring-fencing transfer scheme

(1) A scheme is a ring-fencing transfer scheme if it—

(a) is one under which the whole or part of the business carried
20on—

(i) by a UK authorised person, or

(ii) by a qualifying subsidiary,

is to be transferred to another body (“the transferee”),

(b) is to be made for one or more of the purposes mentioned in
25subsection (3), and

(c) is not an excluded scheme or an insurance business transfer
scheme.

(2) “Qualifying subsidiary” means a body which—

(a) is incorporated in the United Kingdom,

(b) 30is a subsidiary undertaking of a UK authorised person, and

(c) is not itself an authorised person.

(3) The purposes are—

(a) enabling a UK authorised person to carry on core activities as
a ring-fenced body in compliance with the ring-fencing
35provisions;

(b) enabling the transferee to carry on core activities as a ring-
fenced body in compliance with the ring-fencing provisions;

(c) making provision in connection with the implementation of
proposals that would involve a body corporate whose group

Financial Services (Banking Reform) BillPage 23

includes the body corporate to whose business the scheme
relates becoming a ring-fenced body while one or more other
members of its group are not ring-fenced bodies.

(4) A scheme is an excluded scheme for the purposes of this section if—

(a) 5the body to whose business the scheme relates is a building
society or credit union, or

(b) the scheme is a compromise or arrangement to which Part 27
of the Companies Act 2006 (mergers and divisions of public
companies) applies.

(5) 10For the purposes of subsection (1)(a) it is immaterial whether or not
the business to be transferred is carried on in the United Kingdom.

(6) UK authorised person” has the same meaning as in section 105.

(7) “Building society” and “credit union” have the same meanings as in
section 106.

(8) 15“The ring-fencing provisions” means ring-fencing rules and the duty
imposed as a result of section 142G.

6 (1) Section 107 (application for order sanctioning transfer scheme) is amended
as follows.

(2) In subsection (1), for “or a reclaim fund business transfer scheme” substitute
20“, a reclaim fund business transfer scheme or a ring-fencing transfer
scheme”.

(3) After subsection (2) insert—

(2A) An application relating to a ring-fencing transfer scheme may be
made only with the consent of the PRA.

7 (1) 25Section 110 (right to participate in proceedings) is amended as follows.

(2) In subsection (1), after “section 107” insert “relating to an insurance business
transfer scheme, a banking business transfer scheme or a reclaim fund
business transfer scheme”.

(3) After subsection (2) insert—

(3) 30Subsections (4) and (5) apply where an application under section 107
relates to a ring-fencing transfer scheme.

(4) The following are also entitled to be heard—

(a) the PRA,

(b) where the transferee is an authorised person, the FCA, and

(c) 35any person (“P”) (including an employee of the transferor
concerned or of the transferee) who alleges that P would be
adversely affected by the carrying out of the scheme.

(4)
P is not entitled to be heard by virtue of subsection (4)(c) unless
before the hearing P has—

(a) 40filed (in Scotland, lodged) with the court a written statement
of the representations that P wishes the court to consider, and

(b) served copies of the statement on the PRA and the transferor
concerned.

Financial Services (Banking Reform) BillPage 24

8 (1) Section 111 (sanction of court for business transfer schemes) is amended as
follows.

(2) In subsection (1), for “or a reclaim fund business transfer scheme” substitute
“, a reclaim fund business transfer scheme or a ring-fencing transfer
5scheme”.

(3) In subsection (2), after paragraph (aa) insert—

(ab) in the case of a ring-fencing transfer scheme, the appropriate
certificates have been obtained (as to which see Part 2B of that
Schedule);

9 10In section 112 (effect of order sanctioning business transfer scheme), in
subsection (10), after “transfer scheme” insert “or ring-fencing transfer
scheme”.

10 In section 112A (rights to terminate etc.), in subsection (1), for “or a banking
business transfer scheme” substitute “, a banking business transfer scheme
15or a ring-fencing transfer scheme”.

11 In Schedule 12 (transfer schemes: certificates) after Part 2A insert—

Part 2B Ring-fencing transfer schemes

9B Appropriate certificates

(1) 20For the purposes of section 111(2) the appropriate certificates, in
relation to a ring-fencing transfer scheme, are—

(a) a certificate given by the PRA certifying its approval of the
application,

(b) a certificate under paragraph 9C, and

(c) 25if sub-paragraph (2) applies, a certificate under paragraph
9D.

(2) This sub-paragraph applies if the transferee is an EEA firm falling
within paragraph 5(a) or (b) of Schedule 3.

9C Certificate as to financial resources

(1) 30A certificate under this paragraph is one given by the relevant
authority and certifying that, taking the proposed transfer into
account, the transferee possesses, or will possess before the
scheme takes effect, adequate financial resources.

(2) “Relevant authority” means—

(a) 35if the transferee is a PRA-authorised person with a Part 4A
permission or with permission under Schedule 4, the PRA;

(b) if the transferee is an EEA firm falling within paragraph
5(a) or (b) of Schedule 3, its home state regulator;

(c) if the transferee does not fall within paragraph (a) or (b)
40but is subject to regulation in a country or territory outside
the United Kingdom, the authority responsible for the
supervision of the transferee’s business in the place in
which the transferee has its head office;

Financial Services (Banking Reform) BillPage 25

(d) in any other case, the FCA.

(3) In sub-paragraph (2), any reference to a transferee of a particular
description includes a reference to a transferee who will be of that
description if the proposed ring-fencing transfer scheme takes
5effect.

9D Certificate as to consent of home state regulator

A certificate under this paragraph is one given by the appropriate
regulator and certifying that the home state regulator of the
transferee has been notified of the proposed scheme and that—

(a) 10the home state regulator has responded to the notification,
or

(b) the period of 3 months beginning with the notification has
elapsed.