|
| |
|
72 | Temporary public ownership |
| |
(1) | For the purpose of exercising the third stabilisation option in respect of a |
| |
building society the Treasury may make one or more orders for the purposes |
| |
| |
(a) | arranging for deferred shares of a building society to be publicly |
| 5 |
| |
(b) | cancelling private membership rights in the building society, |
| |
(c) | allowing the building society to continue in business while in public |
| |
| |
(d) | eventually either winding up or dissolving the building society. |
| 10 |
(2) | For the purpose specified in subsection (1)(a) an order may— |
| |
(a) | arrange for the transfer of existing deferred shares; |
| |
(b) | provide for new deferred shares. |
| |
(3) | For the purpose of arranging for the transfer of existing deferred shares an |
| |
| 15 |
(a) | provide for deferred shares to be transferred; |
| |
(b) | make other provision for the purposes of, or in connection with, the |
| |
transfer of deferred shares (whether or not the transfer has been or is to |
| |
be effected by the order, by another order under this section or |
| |
| 20 |
(c) | relate to all or any specified class or description of deferred shares |
| |
issued by the building society. |
| |
(4) | For the purpose of providing for new deferred shares an order may— |
| |
(a) | issue or allow the Treasury to issue new deferred shares on behalf of the |
| |
| 25 |
(b) | specify or allow the Treasury to specify the terms and effect of new |
| |
| |
(c) | specify or allow the Treasury to specify the recipient of new deferred |
| |
| |
(5) | For the purpose specified in subsection (1)(b) an order may— |
| 30 |
(a) | cancel or permit the cancellation of shares (whether or not deferred) in |
| |
| |
(b) | confer rights and impose liabilities, or allow them to be conferred and |
| |
imposed, in place of cancelled shares; |
| |
(c) | prevent the issue or acquisition of shares in or other rights in respect of |
| 35 |
the building society otherwise than in accordance with the order. |
| |
(6) | For the purpose specified in subsection (1)(c) an order may make any provision |
| |
which the Treasury think desirable to facilitate the business of the building |
| |
society after the making of provision in accordance with subsections (3) to (5). |
| |
(7) | An order in respect of a building society may— |
| 40 |
(a) | make provision expressly or impliedly disapplying or modifying the |
| |
memorandum or rules of the building society; |
| |
(b) | disapply or modify an enactment about, or in its application to, |
| |
| |
(8) | The following sections apply to orders under this section as to share transfer |
| 45 |
| |
|
| |
|
| |
|
73 | Distribution of assets on dissolution or winding up |
| |
(1) | The Treasury may by order make provision about the distribution of surplus |
| |
assets of a building society which— |
| |
(a) | is the subject of a property transfer instrument or order, and |
| |
(b) | is later wound up or dissolved by consent. |
| 5 |
(2) | An order under section 72 may include provision about the distribution of |
| |
surplus assets of the building society if it is later wound up or dissolved by |
| |
| |
(3) | “Surplus” means remaining after the satisfaction of liabilities to creditors and |
| |
| 10 |
(4) | An order under or by virtue of this section— |
| |
(a) | may include any provision of a kind that may be made by order under |
| |
section 90B of the Building Societies Act 1986 (power to alter priorities |
| |
on dissolution or winding up), |
| |
(b) | may be made whether or not the power under that section has been |
| 15 |
| |
(c) | shall be treated for all procedural purposes in the same way as an order |
| |
| |
| |
(1) | Expressions used in this group of sections and in the Building Societies Act |
| 20 |
1986 have the same meaning in this group of sections as in that Act. |
| |
(2) | An order under section 119(1) of that Act defining “deferred shares”— |
| |
(a) | may make special provision for the meaning of that expression in the |
| |
application of this group of sections, and |
| |
(b) | shall otherwise apply to this group of sections as to that Act. |
| 25 |
75 | Consequential provision |
| |
(1) | The Treasury may by order make provision, in addition to the provisions of |
| |
this group of sections, in consequence of the application of this Part to building |
| |
| |
(2) | An order may, in particular, amend or modify the effect of an enactment |
| 30 |
(including a fiscal enactment) passed before the commencement of this Part. |
| |
| |
(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. |
| 35 |
| |
(1) | The Treasury may by order provide for the application of this Part to credit |
| |
unions (within the meaning of section 31 of the Credit Unions Act 1979) subject |
| |
to modifications set out in the order. |
| |
(2) | An order may disapply, modify or apply (with or without modifications) any |
| 40 |
enactment which relates, or in so far as it relates, to credit unions. |
| |
|
| |
|
| |
|
| |
(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. |
| |
(4) | Provision made under or by virtue of this Part may make special provision in |
| 5 |
relation to the application of this Part to credit unions. |
| |
(5) | In the application of this section to Northern Ireland the reference to section 31 |
| |
of the Credit Unions Act 1979 is to be treated as a reference to Article 2 of the |
| |
Credit Unions (Northern Ireland) Order 1985. |
| |
| 10 |
| |
| |
| |
(1) | This Part provides for a procedure to be known as bank insolvency. |
| |
(2) | The main features of bank insolvency are that— |
| 15 |
(a) | a bank enters the process by court order, |
| |
(b) | the order appoints a bank liquidator, |
| |
(c) | the bank liquidator aims to arrange for the bank’s eligible depositors to |
| |
have their accounts transferred or to receive their compensation from |
| |
| 20 |
(d) | the bank liquidator then winds up the bank, and |
| |
(e) | for those purposes, the bank liquidator has powers and duties of |
| |
liquidators, as applied and modified by the provisions of this Part. |
| |
(3) | The Table describes the provisions of this Part. |
| |
| | | | 25 | | | | | | | | | | | | | Process of bank liquidation |
| | | | | Tenure of bank liquidator |
| | | | | Termination of process, &c. |
| | 30 | | | | | | | | | | |
|
78 | Interpretation: “bank” |
| |
(1) | In this Part “bank” means a UK institution which has permission under Part 4 |
| |
of the Financial Services and Markets Act 2000 to carry on the regulated |
| 35 |
activity of accepting deposits (within the meaning of section 22 of that Act, |
| |
taken with Schedule 2 and any order under section 22). |
| |
|
| |
|
| |
|
(2) | But “bank” does not include— |
| |
(a) | a building society within the meaning of section 119 of the Building |
| |
| |
(b) | a credit union within the meaning of section 31 of the Credit Unions Act |
| |
| 5 |
(c) | any other class of institution excluded by an order made by the |
| |
| |
(3) | In subsection (1) “UK institution” means an institution which is incorporated |
| |
in, or formed under the law of any part of, the United Kingdom. |
| |
(4) | An order under subsection (2)(c)— |
| 10 |
(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. |
| |
(5) | Section 117 makes provision for the application of this Part to building |
| |
| 15 |
(6) | Section 118 makes provision for the application of this Part to credit unions. |
| |
79 | Interpretation: “the court” |
| |
In this Part “the court” means— |
| |
(a) | in England and Wales, the High Court, |
| |
(b) | in Scotland, the Court of Session, and |
| 20 |
(c) | in Northern Ireland, the High Court. |
| |
80 | Interpretation: other expressions |
| |
(1) | In this Part “the FSA” means the Financial Services Authority. |
| |
(2) | In this Part a reference to “the FSCS” is a reference to— |
| |
(a) | the Financial Services Compensation Scheme (established under Part |
| 25 |
15 of the Financial Services and Markets Act 2000), or |
| |
(b) | where appropriate, the scheme manager of that Scheme. |
| |
(3) | In this Part “eligible depositors” means depositors who are eligible for |
| |
compensation under the FSCS. |
| |
(4) | For the purposes of a reference in this Part to inability to pay debts— |
| 30 |
(a) | a bank that is in default on an obligation to pay a sum due and payable |
| |
under an agreement, is to be treated as unable to pay its debts, and |
| |
(b) | section 123 of the Insolvency Act 1986 (inability to pay debts) also |
| |
| |
| for the purposes of paragraph (a) “agreement” means an agreement the |
| 35 |
making or performance of which constitutes or is part of a regulated activity |
| |
| |
(5) | Expressions used in this Part and in the Insolvency Act 1986 have the same |
| |
| |
(6) | Expressions used in this Part and in the Companies Act 2006 have the same |
| 40 |
| |
(7) | A reference in this Part to action includes a reference to inaction. |
| |
|
| |
|
| |
|
(8) | The expression “fair” is used in this Part as a shorter modern equivalent of the |
| |
expression “just and equitable” (and is not therefore intended to exclude the |
| |
application of any judicial or other practice relating to the construction and |
| |
application of that expression). |
| |
| 5 |
| |
(1) | A bank insolvency order is an order appointing a person as the bank liquidator |
| |
| |
(2) | A person is eligible for appointment as a bank liquidator if qualified to act as |
| |
an insolvency practitioner. |
| 10 |
(3) | An appointment may be made only if the person has consented to act. |
| |
(4) | A bank insolvency order takes effect in accordance with section 85; and— |
| |
(a) | the process of a bank insolvency order having effect may be described |
| |
as “bank insolvency” in relation to the bank, and |
| |
(b) | while the order has effect the bank may be described as being “in bank |
| 15 |
| |
| |
(1) | An application for a bank insolvency order may be made to the court by— |
| |
| |
| 20 |
(c) | the Secretary of State. |
| |
(2) | An application must nominate a person to be appointed as the bank liquidator. |
| |
(3) | The bank must be given notice of an application, in accordance with rules |
| |
under section 411 of the Insolvency Act 1986 (as applied by section 112 below). |
| |
| 25 |
| |
(a) | Ground A is that a bank is unable, or likely to become unable, to pay its |
| |
| |
(b) | Ground B is that the winding up of a bank would be in the public |
| |
| 30 |
(c) | Ground C is that the winding up of a bank would be fair. |
| |
(2) | The Bank of England may apply for a bank insolvency order only if— |
| |
(a) | the FSA has informed the Bank of England that the FSA is satisfied that |
| |
Conditions 1 and 2 in section 7 are met, and |
| |
(b) | the Bank of England is satisfied— |
| 35 |
(i) | that the bank has eligible depositors, and |
| |
(ii) | that Ground A or C applies. |
| |
(3) | The FSA may apply for a bank insolvency order only if— |
| |
(a) | the Bank of England consents, and |
| |
(b) | the FSA is satisfied— |
| 40 |
|
| |
|
| |
|
(i) | that Conditions 1 and 2 in section 7 are met, |
| |
(ii) | that the bank has eligible depositors, and |
| |
(iii) | that Ground A or C applies. |
| |
(4) | The Secretary of State may apply for a bank insolvency order only if satisfied— |
| |
(a) | that the bank has eligible depositors, and |
| 5 |
(b) | that Ground B applies. |
| |
(5) | The sources of information on the basis of which the Secretary of State may be |
| |
satisfied of the matters specified in subsection (4) include those listed in section |
| |
124A(1) of the Insolvency Act 1986 (petition for winding up on grounds of |
| |
| 10 |
| |
(1) | The court may make a bank insolvency order on the application of the Bank of |
| |
England or the FSA if satisfied— |
| |
(a) | that the bank has eligible depositors, and |
| |
(b) | that Ground A or C of section 83 applies. |
| 15 |
(2) | The court may make a bank insolvency order on the application of the |
| |
Secretary of State if satisfied— |
| |
(a) | that the bank has eligible depositors, and |
| |
(b) | that Grounds B and C of section 83 apply. |
| |
(3) | On an application for a bank insolvency order the court may— |
| 20 |
(a) | grant the application in accordance with subsection (1) or (2), |
| |
(b) | adjourn the application (generally or to a specified date), or |
| |
(c) | dismiss the application. |
| |
| |
(1) | A bank insolvency order shall be treated as having taken effect in accordance |
| 25 |
| |
| |
(a) | notice has been given to the FSA under section 107 of an application for |
| |
an administration order or a petition for a winding up order, and |
| |
(b) | the FSA or the Bank of England applies for a bank insolvency order in |
| 30 |
the period of 2 weeks specified in Condition 3 in that section, |
| |
| the bank insolvency order is treated as having taken effect when the |
| |
application or petition was made or presented. |
| |
(3) | In any other case, the bank insolvency order is treated as having taken effect |
| |
when the application for the order was made. |
| 35 |
(4) | Unless the court directs otherwise on proof of fraud or mistake, proceedings |
| |
taken in the bank insolvency, during the period for which it is treated as having |
| |
had effect, are treated as having been taken validly. |
| |
|
| |
|