(3) In section 29 (reverse share transfer)—

(a) in subsection (3) for the words from “securities”, in the second place, to
the end substitute “securities issued by the bank and held by a
transferee under the onward share transfer order (“the onward
5transferee”).”, and

(b) after subsection (4) insert—

“(4A) The Treasury must not make a reverse share transfer order
under subsection (3) unless—

(a) the onward transferee is—

(i) 10a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse share transfer order is made with the written
15consent of the onward transferee.”

(4) In section 31 (bridge bank: reverse share transfer)—

(a) in subsection (1) omit the words from “providing for” to the end,

(b) in subsection (2) for “person within subsection (1)(a) to (c)” substitute
“transferee under the original instrument”,

(c) 20after subsection (3) insert—

“(3A) The Bank of England must not make a bridge bank reverse
share transfer instrument unless—

(a) the transferee under the original instrument is—

(i) a company wholly owned by the Bank of
25England,

(ii) a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) the bridge bank reverse share transfer instrument is
made with the written consent of the transferee under
30the original instrument.”

(5) After section 42 insert—

“42A Private sector purchaser: reverse property transfer

(1) This section applies where the Bank of England has made a property
transfer instrument in accordance with section 11(2) (“the original
35instrument”) providing for the transfer of property, rights or liabilities
of a bank to a person (“the original transferee”).

(2) The Bank of England may make one or more private sector reverse
property transfer instruments in respect of property, rights or liabilities
of the original transferee.

(3) 40A private sector reverse property transfer instrument is a property
transfer instrument which—

(a) provides for transfer to the transferor under the original
instrument;

(b) makes other provision for the purposes of, or in connection
45with, the transfer of property, rights or liabilities that are, could
be or could have been transferred under paragraph (a) (whether

the transfer has been or is to be effected by that instrument or
otherwise).

(4) The Bank of England must not make a private sector reverse property
transfer instrument without the written consent of the original
5transferee.

(5) Sections 7, 8 and 50 do not apply to a private sector reverse property
transfer instrument (but it is to be treated in the same way as any other
property transfer instrument for all other purposes including for the
purposes of the application of a power under this Part).

(6) 10Before making a private sector reverse property transfer instrument the
Bank of England must consult—

(a) the PRA,

(b) the FCA, and

(c) the Treasury.

(7) 15Section 42 applies where the Bank of England has made a private sector
reverse property transfer instrument.”

(6) In section 44 (reverse property transfer)—

(a) in subsection (3) for “of a transferee” to the end substitute “of a
transferee under the onward property transfer instrument (“the
20onward transferee”).”,

(b) after subsection (4) insert—

“(4A) The Bank of England must not make a reverse property transfer
instrument unless—

(a) the onward transferee is—

(i) 25a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) a company wholly owned by a nominee of the
Treasury, or

(b) 30the reverse property transfer instrument is made with
the written consent of the onward transferee.”

(7) In section 46 (temporary public ownership: reverse property transfer)—

(a) in subsection (1) omit from “providing for” to the end, and

(b) after subsection (3) insert—

“(3A) 35The Treasury must not make a reverse property transfer order
unless—

(a) the transferee under the original order is—

(i) a company wholly owned by the Bank of
England,

(ii) 40a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse property transfer order is made with the
written consent of the transferee under the original
order.”

(8) 45In section 48A (creation of liabilities), in subsection (1) after “42(3)(b),” insert
“42A(3)(b),”.

(9) In section 53 (onward and reverse transfers: compensation), in subsection (1)—

(a) before paragraph (a) insert—

“(za) the Bank of England makes a private sector reverse
share transfer instrument under section 26A,”, and

(b) 5after paragraph (d) insert—

“(da) the Bank of England makes a private sector reverse
property transfer instrument under section 42A,”.

(10) In section 83 (supplemental), in subsection (2)(d)—

(a) at the end of sub-paragraph (iii) insert “and”, and

(b) 10for sub-paragraphs (iv) and (v) substitute—

“(iv) is not subject to the restriction in section 29(3)
that the securities issued by the bank were
transferred under the original order (as defined
in section 29(1)).”

(11) 15In the Table in section 261 (index of defined terms), after the entry relating to
“partial property transfer”, insert—

89 Property transfer instruments: property held on trust

(1) The Banking Act 2009 is amended as follows.

(2) In section 34(7) (effect of property transfer instruments: provision in respect of
property held on trust), in paragraph (a) omit “(which provision may remove
25or alter the terms of the trust)”.

(3) At the end of section 34 insert—

“(8) Provision under subsection (7)(a) may remove or alter the terms of the
trust on which the property is held only to the extent that the Bank of
England thinks it necessary or expedient for the purpose of
30transferring—

(a) the legal or beneficial interest of the transferor in the property;

(b) any powers, rights or obligations of the transferor in respect of
the property.

(9) In subsection (8) references to the transferor are references to the
35transferor under the property transfer instrument.”

(4) In section 45 (temporary public ownership: property transfer orders) after
subsection (5) insert—

“(5A) In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
40Treasury.”

(5) In section 46 (temporary public ownership: reverse property transfer orders)

after subsection (5) insert—

“(5A) In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
Treasury.”

90 5Reports following exercise of a stabilisation power

(1) After section 79 of the Banking Act 2009 insert—

“79A Private sector purchaser: report

(1) This section applies where the Bank of England sells all or part of a
bank’s business to a commercial purchaser.

(2) 10The Bank must report to the Chancellor of the Exchequer about the
exercise of the power to make share transfer instruments and property
transfer instruments under section 11(2).

(3) The report must comply with any requirements as to content specified
by the Treasury.

(4) 15The report must be made as soon as is reasonably practicable after the
end of one year beginning with the date of the first transfer instrument
made under section 11(2).”

(2) After section 81 of that Act insert—

“81A Accounting information to be included in reports under sections 80
20and 81

(1) A report under section 80(1) or 81 must include accounting information
in respect of the bank or bridge bank that is the subject of the report.

(2) In this section “accounting information” means—

(a) a balance sheet that, in the opinion of the person making the
25report, gives a true and fair view of the state of affairs of the
bank or bridge bank as at the reporting date, and

(b) a profit and loss account that, in the opinion of the person
making the report, gives a true and fair view of the profit or loss
of the bank or bridge bank for the reporting period.

(3) 30In this section—

(a) “reporting period” means the period to which the report relates,
and

(b) “reporting date” means the last day of the reporting period.”

(3) In section 1(6) of that Act (table describing provisions of Part 1), in the entry
35relating to sections 76 to 81, for “81” substitute “81A”.

91 Groups

(1) The Banking Act 2009 is amended as follows.

(2) In section 1 (overview), for the entry in the Table relating to sections 82 and 83

substitute—

(3) In section 20 (directors), after subsection (1) insert—

“(1A) Subsection (1) also applies to a director of any undertaking which is a
5banking group company in respect of a specified bank.”

(4) After section 36 insert—

“36A Directors

(1) A property transfer instrument may enable the Bank of England—

(a) to remove a director of a specified bank;

(b) 10to vary the service contract of a director of a specified bank;

(c) to terminate the service contract of a director of a specified
bank;

(d) to appoint a director of a specified bank.

(2) Subsection (1) also applies to a director of any undertaking which is a
15banking group company in respect of a specified bank.

(3) Appointments under subsection (1)(d) are to be on terms and
conditions agreed with the Bank of England.”

(5) For the italic heading before section 82 substitute “Groups”, and after that
heading insert—

“81B 20Sale to commercial purchaser and transfer to bridge bank

(1) The Bank of England may exercise a stabilisation power in respect of a
banking group company in accordance with section 11(2) or 12(2) if the
following conditions are met.

(2) Condition 1 is that the PRA is satisfied that the general conditions for
25the exercise of a stabilisation power set out in section 7 are met in
respect of a bank in the same group.

(3) Condition 2 (which does not apply in a financial assistance case) is that
the Bank of England is satisfied that the exercise of the power in respect
of the banking group company is necessary, having regard to the public
30interest in—

(a) the stability of the financial systems of the United Kingdom,

(b) the maintenance of public confidence in the stability of those
systems,

(c) the protection of depositors, or

(d) 35the protection of any client assets that may be affected.

(4) Condition 3 (which applies only in a financial assistance case) is that—

(a) the Treasury have recommended the Bank of England to
exercise a stabilisation power on the grounds that it is necessary
to protect the public interest, and

(b) 40in the Bank’s opinion, exercise of the power in respect of the
banking group company is an appropriate way to provide that
protection.

(5) Condition 4 is that the banking group company is an undertaking
incorporated in, or formed under the law of any part of, the United
Kingdom.

(6) Before determining whether Condition 2 or 3 (as appropriate) is met,
5the Bank of England must consult—

(a) the Treasury,

(b) the PRA, and

(c) the FCA.

(7) In exercising a stabilisation power in reliance on this section the Bank
10of England must have regard to the need to minimise the effect of the
exercise of the power on other undertakings in the same group.

(8) In this section “financial assistance case” means a case in which the
Treasury notify the Bank of England that they have provided financial
assistance in respect of a bank in the same group for the purpose of
15resolving or reducing a serious threat to the stability of the financial
systems of the United Kingdom.

81C Section 81B: supplemental

(1) In the following provisions references to banks include references to
banking group companies—

(a) 20section 10(1), and

(b) section 75(5)(a).

(2) Where the Bank of England exercises a stabilisation power in respect of
a banking group company in reliance on section 81B, the provisions
relating to the stabilisation powers and the bank administration
25procedure contained in this Act (except sections 7 and 8) and any other
enactment apply (with any necessary modifications) as if the banking
group company were a bank.

(3) For the purposes of the application of section 143 (grounds for applying
for bank administration order), the reference in subsection (2) to the
30Bank of England exercising a stabilisation power includes a case where
the Bank of England intends to exercise such a power.

81D Interpretation: “banking group company” &c.

(1) In this Part “banking group company” means an undertaking—

(a) which is (or, but for the exercise of a stabilisation power, would
35be) in the same group as a bank, and

(b) in respect of which any conditions specified in an order made
by the Treasury are met.

(2) An order may require the Bank of England to consult specified persons
before determining whether the conditions are met.

(3) 40An order—

(a) is to be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and
approved by resolution of each House of Parliament.

(4) If an order contains a statement that the Treasury are of the opinion
45that, by reason of urgency, it is necessary to make the order without
complying with subsection (3)(b)—

(a) the order may be made, and

(b) the order lapses unless approved by resolution of each House of
Parliament during the period of 28 days (ignoring periods of
dissolution, prorogation or adjournment of either House for
5more than 4 days) beginning with the day on which the order is
made.

(5) The lapse of an order under subsection (4)(b)—

(a) does not invalidate anything done under or in reliance on the
order before the lapse and at a time when neither House has
10declined to approve the order, and

(b) does not prevent the making of a new order (in new terms).

(6) Undertakings are in the same group for the purposes of sections 81B,
81C and this section if they are group undertakings in respect of each
other.

(7) 15Expressions defined in the Companies Act 2006 have the same meaning
in section 81B and this section as in that Act.”

(6) In the Table in section 259 (statutory instruments), in Part 1 after the entry
relating to section 78 insert—

(7) In the Table in section 261 (index of defined terms), after the entry relating to
“bank insolvency order” insert—

92 Application to investment firms

(1) 25The Banking Act 2009 is amended as follows.

(2) In section 1 (overview), after the entry in the Table relating to sections 84 to 89
insert—

(3) In section 2 (interpretation: “bank”), at the end insert—

“(8) 30Section 89A applies this Part to investment firms with modifications.”

(4) In section 75(5) (power to change law: application to other institutions), omit
the “or” following paragraph (c) and after that paragraph insert—

“(ca) to investment firms,”.

(5) After section 89 (and in Part 1) insert—

“Investment firms

89A Application to investment firms

(1) This Part applies to investment firms as it applies to banks, subject to
5the modifications in subsection (2).

(2) Ignore sections 1(2)(b), 4(2)(b) and (6), 5(1)(b), 7(7), 8(2)(c) and 14(5).”

(6) After section 159 insert—

“159A Application to investment firms

This Part applies to investment firms as it applies to banks.”

(7) 10After section 258 insert—

“258A Investment firm”

(1) In this Act “investment firm” means a UK institution which is (or, but
for the exercise of a stabilisation power, would be) an investment firm
for the purposes of Directive 2006/49/EC on the capital adequacy of
15investment firms and credit institutions.

(2) But “investment firm” does not include—

(a) an institution which is also—

(i) a bank (within the meaning of Part 1),

(ii) a building society (within the meaning of section 119 of
20the Building Societies Act 1986), or

(iii) a credit union (within the meaning of section 31 of the
Credit Unions Act 1979 or Article 2(2) of the Credit
Unions (Northern Ireland) Order 1985), or

(b) an institution which is of a class or description specified in an
25order made by the Treasury.

(3) An order—

(a) is to be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and
approved by resolution of each House of Parliament.

(4) 30If an order contains a statement that the Treasury are of the opinion
that, by reason of urgency, it is necessary to make the order without
complying with subsection (3)(b)—

(a) the order may be made, and

(b) the order lapses unless approved by resolution of each House of
35Parliament during the period of 28 days (ignoring periods of
dissolution, prorogation or adjournment of either House for
more than 4 days) beginning with the day on which the order is
made.

(5) The lapse of an order under subsection (4)(b)—

(a) 40does not invalidate anything done under or in reliance on the
order before the lapse and at a time when neither House has
declined to approve the order, and

(b) does not prevent the making of a new order (in new terms).

(6) In subsection (1) “UK institution” means an institution which is
incorporated in, or formed under the law of any part of, the United
Kingdom.”

(8) In the Table in section 259 (statutory instruments), in Part 7 after the entry
5relating to section 257 insert—

(9) In the Table in section 261 (index of defined terms), after the entry relating to
“inter-bank payment system”, insert—

(10) In section 214B(1)(a) of FSMA 2000 (contribution to costs of special resolution
regime) for “or credit union” substitute “, credit union or investment firm”.

93 Application to UK clearing houses

(1) The Banking Act 2009 is amended as follows.

(2) 15In section 1 (overview), after the entry in the Table relating to section 89A,
insert—

(3) In section 2 (interpretation: “bank”), after subsection (8) insert—

“(9) Section 89B applies this Part to UK clearing houses with modifications.”

(4) 20After section 39 insert—

“39A Banks which are clearing houses

Sections 89C to 89E (clearing house rules, membership and recognition)
apply in relation to a bank which would be a UK clearing house but for
section 89G(2) (exclusion of banks etc from definition of UK clearing
25house) as they apply in relation to a UK clearing house.”

(5) In section 75(5) (power to change law: application to other institutions), after
paragraph (ca) insert—

“(cb) to UK clearing houses, or”.

(6) After section 89A (and in Part 1) insert—

30“UK clearing houses

89B Application to UK clearing houses

(1) This Part applies to UK clearing houses as it applies to banks, subject
to—

(a) the modifications specified in subsections (2) to (5), and in the
Table in subsection (6), and

(b) any other necessary modifications.

(2) For section 13 substitute—

“13 5Transfer of ownership

(1) The third stabilisation option is to transfer ownership of the UK
clearing house to any person.

(2) For that purpose the Bank of England may make one or more
share transfer instruments.”

(3) 10For sections 28 and 29 substitute—

“28 Onward transfer

(1) This section applies where the Bank of England has made a
share transfer instrument, in respect of securities issued by a UK
clearing house, in accordance with section 13(2) (“the original
15instrument”).

(2) The Bank of England may make one or more onward share
transfer instruments.

(3) An onward share transfer instrument is a share transfer
instrument which—

(a) 20provides for the transfer of—

(i) securities which were issued by the UK clearing
house before the original instrument and have
been transferred by the original instrument or a
supplemental share transfer instrument, or

(ii) 25securities which were issued by the UK clearing
house after the original instrument;

(b) makes other provision for the purposes of, or in
connection with, the transfer of securities issued by the
UK clearing house (whether the transfer has been or is to
30be effected by that instrument, by another share transfer
instrument or otherwise).

(4) An onward share transfer instrument may not transfer
securities to the transferor under the original instrument.

(5) The Bank of England may not make an onward share transfer
35instrument unless the transferee under the original instrument
is—

(a) the Bank of England,

(b) a nominee of the Treasury, or

(c) a company wholly owned by the Bank of England or the
40Treasury.

(6) Sections 7 and 8 do not apply to an onward share transfer
instrument (but it is to be treated in the same way as any other
share transfer instrument for all other purposes, including for
the purposes of the application of a power under this Part).