Banking Bill

House of Commons

Session 2007 - 08
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Banking Bill

Banking Bill
Part 1 — Special Resolution Regime
30

61
Pensions
(1)
This section applies to—
(a)
share transfer orders,
(b)
share transfer instruments, and
(c)
property transfer instruments.
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(2)
An order or instrument may make provision—
(a)
about the consequences of a transfer for a pension scheme;
(b)
about property, rights and liabilities of any pension scheme of the bank.
(3)
In particular, an order or instrument may—
(a)
modify any rights and liabilities;
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(b)
apportion rights and liabilities;
(c)
transfer property of, or accrued rights in, one pension scheme to
another (with or without consent).
(4)
Provision by virtue of this section may (but need not) amend the terms of a
pension scheme.
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(5)
A share or property transfer instrument may make provision in reliance on this
section only with the consent of the Treasury.
(6)
In this section—
(a)
“pension scheme” includes any arrangement for the payment of
pensions, allowances and gratuities, and
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(b)
a reference to a pension scheme of a bank is a reference to a scheme in
respect of which the bank is or was an employer.
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Enforcement
(1)
The Treasury may by regulations make provision for the enforcement of
obligations imposed by or under—
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(a)
a share transfer order,
(b)
a share transfer instrument, or
(c)
a property transfer instrument.
(2)
Regulations—
(a)
may confer jurisdiction on a court or tribunal;
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(b)
may not impose a penalty or create a criminal offence;
(c)
may make provision which has effect in respect of an order or
instrument only if applied by the order or instrument.
(3)
Regulations—
(a)
shall be made by statutory instrument, and
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(b)
shall be subject to annulment in pursuance of a resolution of either
House of Parliament.
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Disputes
(1)
This section applies to—
(a)
share transfer orders,
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(b)
share transfer instruments, and
(c)
property transfer instruments.

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(2)
An order or instrument may include provision for disputes to be determined
in a specified manner.
(3)
Provision by virtue of subsection (2) may, in particular—
(a)
confer jurisdiction on a court or tribunal;
(b)
confer discretion on a specified person.
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64
Tax
(1)
The Treasury may by regulations make provision about the fiscal
consequences of the exercise of a stabilisation power.
(2)
Regulations may relate to—
(a)
capital gains tax;
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(b)
corporation tax;
(c)
income tax;
(d)
inheritance tax;
(e)
stamp duty;
(f)
stamp duty land tax;
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(g)
stamp duty reserve tax.
(3)
Regulations may apply to—
(a)
anything done in connection with an instrument or order;
(b)
things transferred or otherwise affected by virtue of an instrument or
order;
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(c)
a transferor or transferee under an instrument or order;
(d)
persons otherwise affected by an instrument or order.
(4)
Regulations may—
(a)
modify or disapply an enactment;
(b)
provide for an action to have or not have specified consequences;
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(c)
provide for specified classes of property (including securities), rights or
liabilities to be treated, or not treated, in a specified way;
(d)
withdraw or restrict a relief;
(e)
extend, restrict or otherwise modify a charge to tax;
(f)
provide for matters to be determined by the Treasury in accordance
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with provision made by or in accordance with the regulations.
(5)
Regulations may make provision for the fiscal consequences of the exercise of
a stabilisation power in respect of things done—
(a)
during the period of three months before the date on which the
stabilisation power is exercised, or
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(b)
on or after that date.
(6)
In relation to the exercise of a supplemental or onward instrument or order
under section 25, 26, 27, 28, 39, 40 or 41, in subsection (5)(a) above “the
stabilisation power” is a reference to the first stabilisation power in connection
with which the supplemental or onward instrument or order is made.
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(7)
The Treasury may by order amend subsection (2) so as to—
(a)
add an entry, or
(b)
remove an entry.

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(8)
Regulations or an order under this section shall be made by statutory
instrument.
(9)
Regulations under this section may not be made unless a draft has been laid
before and approved by resolution of the House of Commons.
(10)
An order under this section shall be subject to annulment in pursuance of a
5
resolution of the House of Commons.
65
Power to change law
(1)
The Treasury may by order amend the law for the purpose of enabling the
powers under this Part to be used effectively, having regard to the special
resolution objectives.
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(2)
An order may be made—
(a)
for the general purpose of the exercise of powers under this Part,
(b)
to facilitate a particular proposed or possible use of a power, or
(c)
in connection with a particular exercise of a power.
(3)
An order under subsection (2)(c) may make provision which has retrospective
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effect in so far as the Treasury consider it necessary or desirable for giving
effect to the particular exercise of a power under this Act in connection with
which the order is made.
(4)
In subsection (1) “amend the law” means—
(a)
disapply or modify the effect of a provision of an enactment, or
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(b)
disapply or modify the effect of a rule of law not set out in legislation.
(5)
In subsection (4) “enactment” includes—
(a)
subordinate legislation,
(b)
an Act of the Scottish Parliament and an instrument under an Act of the
Scottish Parliament, and
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(c)
Northern Ireland legislation.
(6)
Provision under this section may relate to this Part as it applies—
(a)
to banks,
(b)
to building societies,
(c)
to credit unions (by virtue of section 76), or
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(d)
to any combination.
(7)
Specific powers under this Part are without prejudice to the generality of this
section.
(8)
An order—
(a)
shall be made by statutory instrument, and
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(b)
may not be made unless a draft has been laid before and approved by
resolution of each House of Parliament.
(9)
But if the Treasury think it necessary to make an order without complying with
subsection (8)(b)—
(a)
the order may be made,
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(b)
the order shall lapse 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 more than
4 days) beginning with the day on which the order is made,

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(c)
the lapse of an order under paragraph (b) does 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
(d)
the lapse of an order under paragraph (b) does not prevent the making
of a new order.
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Treasury
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International obligation notice: general
(1)
The Bank of England may not exercise a stabilisation power in respect of a bank
if the Treasury notify the Bank that the exercise would be likely to contravene
an international obligation of the United Kingdom.
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(2)
A notice under subsection (1)—
(a)
must be in writing, and
(b)
may be withdrawn (generally, partially or conditionally).
(3)
If the Treasury give a notice under subsection (1) the Bank of England must
consider other exercises of the stabilisation powers with a view to—
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(a)
pursuing the special resolution objectives, and
(b)
avoiding the objections on which the Treasury’s notice was based.
(4)
The Treasury may by notice to the Bank of England disapply subsection (3) in
respect of a bank; and a notice may be revoked by further notice.
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International obligation notice: bridge bank
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(1)
This section applies where the Bank of England has transferred all or part of a
bank’s business to a bridge bank.
(2)
The Bank of England must comply with any notice of the Treasury requiring
the Bank, for the purpose of ensuring compliance by the United Kingdom with
its international obligations—
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(a)
to take specified action under this Part in respect of the bridge bank, or
(b)
not to take specified action under this Part in respect of the bridge bank.
(3)
A notice under subsection (1)—
(a)
must be in writing, and
(b)
may be withdrawn (generally, partially or conditionally).
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(4)
A notice may include requirements about timing.
68
Public funds: general
(1)
The Bank of England may not exercise a stabilisation power in respect of a bank
without the Treasury’s consent if the exercise would be likely to have
implications for public funds.
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(2)
In subsection (1)—
(a)
“public funds” means the Consolidated Fund and any other account or
source of money which cannot be drawn or spent other than by, or with
the authority of, the Treasury, and
(b)
action has implications for public funds if it would or might involve or
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lead to a need for the application of public funds.

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(3)
The Treasury may by order specify considerations which are to be, or not to be,
taken into account in determining whether action has implications for public
funds for the purpose of subsection (1).
(4)
If the Treasury refuse consent under subsection (1), the Bank of England must
consider other exercises of the stabilisation powers with a view to—
5
(a)
pursuing the special resolution objectives, and
(b)
avoiding the objections on which the Treasury’s refusal was based.
(5)
The Treasury may by notice to the Bank of England disapply subsection (4) in
respect of a bank; and a notice may be revoked by further notice.
(6)
An order under subsection (3)—
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(a)
shall be made by statutory instrument, and
(b)
shall be subject to annulment in pursuance of a resolution of the House
of Commons.
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Public funds: bridge bank
(1)
This section applies where the Bank of England has transferred all or part of a
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bank’s business to a bridge bank.
(2)
The Bank of England may not take action in respect of the bridge bank without
the Treasury’s consent if the action would be likely to have implications for
public funds.
(3)
Section 68(2) and (3) have effect for the purposes of this section.
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70
Bridge bank: report
(1)
Where the Bank of England transfers all or part of a bank’s business to a bridge
bank, the Bank must report to the Chancellor of the Exchequer about the
activities of the bridge bank.
(2)
The first report must be made as soon as is reasonably practicable after the end
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of one year beginning with the date of the first transfer to the bridge bank.
(3)
A report must be made as soon as is reasonably practicable after the end of each
subsequent year.
(4)
The Chancellor of the Exchequer must lay a copy of each report under
subsection (2) or (3) before Parliament.
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(5)
The Bank must comply with any request of the Treasury for a report dealing
with specified matters in relation to a bridge bank.
(6)
A request under subsection (5) may include provision about—
(a)
the content of the report;
(b)
timing.
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