Banking Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Banking Bill

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Part 1 — Special Resolution Regime
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Incidental provision
(1)
A property transfer instrument may include incidental, consequential or
transitional provision.
(2)
In relying on subsection (1) an instrument—
(a)
may make provision generally or only for specified purposes, and
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(b)
may make different provision for different purposes.
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Procedure
(1)
As soon as is reasonably practicable after making a property transfer
instrument in respect of a bank the Bank of England shall send a copy to—
(a)
the bank,
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(b)
the Treasury,
(c)
the FSA, and
(d)
any other person specified in the code of practice under section 5.
(2)
As soon as is reasonably practicable after making a property transfer
instrument the Bank of England shall publish a copy—
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(a)
on the Bank’s internet website, and
(b)
in two newspapers, chosen by the Bank of England to maximise the
likelihood of the instrument coming to the attention of persons likely to
be affected.
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Supplemental instruments
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(1)
This section applies where the Bank of England has made a property transfer
instrument in accordance with section 10(2) or 11(2) (“the original
instrument”).
(2)
The Bank of England may make one or more supplemental property transfer
instruments.
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(3)
A supplemental property transfer instrument is a property transfer instrument
which—
(a)
provides for property, rights or liabilities to be transferred from the
transferor under the original instrument (whether accruing or arising
before or after the original instrument);
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(b)
makes other provision of a kind that an original property transfer
instrument may make under section 30(1)(b) (whether in connection
with a transfer under the original instrument or in connection with a
transfer under that or another supplemental instrument).
(4)
Sections 7 and 8 do not apply to a supplemental property transfer instrument
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(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).
(5)
In the case of a property transfer instrument made in accordance with section
10(2), a supplemental property transfer instrument may not transfer property,
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rights or liabilities.
(6)
Before making a supplemental property transfer instrument the Bank of
England must consult—
(a)
the FSA, and

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(b)
the Treasury.
(7)
The possibility of making a supplemental property transfer instrument in
reliance on subsection (2) is without prejudice to the possibility of making of a
new instrument in accordance with section 10(2) or 11(2) (and not in reliance
on subsection (2) above).
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Onward transfer
(1)
This section applies where the Bank of England has made a property transfer
instrument in respect of a bridge bank in accordance with section 11(2) (“the
original instrument”).
(2)
The Bank of England may make one or more onward property transfer
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instruments.
(3)
An onward property transfer instrument is a property transfer instrument
which—
(a)
provides for property, rights or liabilities of the bridge bank to be
transferred (whether accruing or arising before or after the original
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instrument);
(b)
makes other provision for the purposes of, or in connection with, the
transfer of property, rights or liabilities of the bridge bank (whether the
transfer has been or is to be effected by that instrument, by another
property transfer instrument or otherwise).
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(4)
An onward property transfer instrument may relate to property, rights or
liabilities of the bridge bank whether or not they were transferred under the
original instrument.
(5)
An onward property transfer instrument may not transfer property, rights or
liabilities to the transferor under the original instrument.
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(6)
Sections 7, 8 and 46 do not apply to an onward property transfer instrument
(but for other purposes it is to be treated in the same way as any other property
transfer instrument, including for the purposes of the application of a power
under this Part).
(7)
Before making an onward property transfer instrument the Bank of England
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must consult—
(a)
the FSA, and
(b)
the Treasury.
(8)
Section 39 applies where the Bank of England has made an onward property
transfer instrument.
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Temporary public ownership: property transfer
(1)
This section applies where the Treasury have made a share transfer order, in
respect of securities issued by a bank, in accordance with section 12(2) (“the
original order”).
(2)
The Treasury may make one or more property transfer orders.
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(3)
A property transfer order is an order which—
(a)
provides for property, rights or liabilities of the bank to be transferred
(whether accruing or arising before or after the original order);

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(b)
makes other provision for the purposes of, or in connection with, the
transfer of property, rights or liabilities of the bank (whether the
transfer has been or is to be effected by the order or otherwise).
(4)
A property transfer order may not transfer property, rights or liabilities to the
transferor under the original order.
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(5)
Sections 7, 8 and 9 do not apply to a property transfer order.
(6)
A property transfer order is to be treated—
(a)
in the same way as a share transfer order for the procedural purposes
of section 24, but
(b)
as a property transfer instrument for all other purposes (including for
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the purposes of the application of powers under this Part).
(7)
In the application of section 36 by virtue of subsection (6)(b) above, the power
to give directions under section 36(7) vests in the Treasury (instead of the Bank
of England).
(8)
Section 39 applies where the Treasury has made a property transfer order.
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(9)
Before making a property transfer order the Treasury must consult—
(a)
the FSA, and
(b)
the Bank of England.
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Restriction of partial transfers
(1)
In this Part “partial property transfer” means a property transfer instrument
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which provides for the transfer of some, but not all, of the property, rights and
liabilities of a bank.
(2)
The Treasury may by order—
(a)
restrict the making of partial property transfers;
(b)
impose conditions on the making of partial property transfers;
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(c)
require partial property transfers to include specified provision or
provision to a specified effect;
(d)
provide for a partial property transfer to be void or voidable, or for
other consequences (including automatic transfer of other property,
rights or liabilities) to arise, if or in so far as the partial property transfer
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is made or purported to be made in contravention of a provision of the
order (or of another order under this section).
(3)
Provision under subsection (2) may, in particular, refer to particular classes of
deposit.
(4)
An order may apply to transfers generally or only to transfers—
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(a)
of a specified kind, or
(b)
made or applying in specified circumstances.
(5)
An order—
(a)
shall be made by statutory instrument, and
(b)
may not be made unless a draft has been laid before and approved by
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resolution of each House of Parliament.

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Power to protect certain interests
(1)
In this section—
(a)
“security interests” means arrangements under which one person
acquires an actual or contingent interest in the property of another
(including arrangements of a kind described commercially as “title
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transfer security” arrangements),
(b)
“set-off” or “netting” arrangements are arrangements under which
Debt 1 can be set off against Debt 2 to reduce the amount of Debt 2, and
(c)
“netting arrangements” includes, in particular, “close-out” netting
arrangements, under which theoretical debts are calculated during the
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course of a contract for the purpose of enabling them to be set off
against each other.
(2)
The Treasury may by order—
(a)
restrict the making of partial property transfers in cases that involve, or
where they might affect, security interests or set-off or netting
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arrangements;
(b)
impose conditions on the making of partial property transfers in cases
that involve, or where they might affect, security interests or set-off or
netting arrangements;
(c)
require partial property transfers to include specified provision, or
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provision to a specified effect, in respect of or for purposes connected
with security interests or set-off or netting arrangements;
(d)
provide for a partial property transfer to be void or voidable, or for
other consequences (including automatic transfer of other property,
rights or liabilities) to arise, if or in so far as the partial property transfer
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is made or purported to be made in contravention of a provision of the
order (or of another order under this section).
(3)
An order may apply to arrangements generally or only to arrangements—
(a)
of a specified kind, or
(b)
made or applying in specified circumstances.
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(4)
An order may include provision for determining which arrangements are to
be, or not to be, treated as security interests or set-off or netting arrangements;
in particular, an order may provide for arrangements to be classified not
according to their description by the parties but according to one or more
indications of how they are treated, or are intended to be treated, in
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commercial practice.
(5)
In this section “arrangements” includes arrangements which—
(a)
are formed wholly or partly by one or more contracts;
(b)
arise under or are wholly or partly governed by the law of a country or
territory outside the United Kingdom;
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(c)
wholly or partly arise automatically as a matter of law.
(6)
An order—
(a)
shall 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.
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