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|
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198 | Repeal of old authorising enactments |
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The following shall cease to have effect— |
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(a) | section 1 of the Bank Notes (Scotland) Act 1845 (authorisation to issue |
| |
| 5 |
(b) | section 8 of the Bankers (Ireland) Act 1845 (authorisation to issue |
| |
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199 | Saving for existing issuers |
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An authorised bank may continue to issue banknotes after commencement, but |
| |
| 10 |
(a) | in accordance with the provisions of this Part, and |
| |
(b) | in the Part of the United Kingdom in which it was authorised to issue |
| |
banknotes before commencement. |
| |
200 | Consequential repeals and amendments |
| |
(1) | In the Bankers (Ireland) Act 1845— |
| 15 |
(a) | sections 9 to 23 cease to have effect, |
| |
(b) | in section 26 for “except the Bank Notes of such Bankers as are hereby |
| |
authorised to continue to issue Bank Notes as aforesaid” substitute |
| |
“except banknotes issued in reliance on section 199 of the Banking Act |
| |
| 20 |
(c) | section 28 ceases to have effect, and |
| |
(d) | Schedules A and B cease to have effect. |
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(2) | In the Bank Notes (Scotland) Act 1845— |
| |
(a) | every section ceases to have effect except for sections 16, 18, 21 and 22, |
| |
| 25 |
(b) | in section 18 for “except the Bank Notes of such Bankers as are hereby |
| |
authorised to continue to issue Bank Notes as aforesaid” substitute |
| |
“except banknotes issued in reliance on section 199 of the Banking Act |
| |
| |
(3) | The following cease to have effect— |
| 30 |
(a) | section 12 of the Bank Charter Act 1844, |
| |
(b) | section 9 of the Currency and Bank Notes Act 1928, |
| |
(c) | sections 1 and 3 of, and the Schedule to, the Bankers (Northern Ireland) |
| |
| |
(d) | in the Coinage Act 1971— |
| 35 |
(i) | section 12(4)(b) and (c), and |
| |
(ii) | in Schedule 2 the entries relating to— |
| |
(a) | the Bankers (Ireland) Act 1845, |
| |
(b) | the Bank Notes (Scotland) Act 1845, and |
| |
(c) | section 3 of the Bankers (Northern Ireland) Act 1928. |
| 40 |
|
| |
|
| |
|
| |
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(1) | The Treasury shall make regulations about the treatment, holding and issuing |
| |
of banknotes by authorised banks (“banknote regulations”). |
| |
(2) | Banknote regulations— |
| 5 |
(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. |
| |
| |
(1) | Banknote regulations may require or permit the Bank of England to make rules |
| 10 |
(“banknote rules”) about any aspect of the treatment, holding or issuing of |
| |
banknotes by authorised banks. |
| |
(2) | In particular, banknote regulations may require or permit banknote rules to do |
| |
anything which banknote regulations may do. |
| |
| 15 |
(a) | may make provision generally or only for specified purposes, cases or |
| |
| |
(b) | may make different provision for different purposes, cases or |
| |
| |
| 20 |
| |
(1) | Banknote regulations must require authorised banks to have backing assets. |
| |
(2) | “Backing assets” means assets of a kind specified by banknote regulations; and |
| |
the regulations may, in particular, specify— |
| |
(a) | banknotes issued by the Bank of England, |
| 25 |
(b) | current coins of the United Kingdom, and |
| |
(c) | funds in a specified kind of account held with the Bank of England or |
| |
with another specified institution or class of institution. |
| |
(3) | The regulations must— |
| |
(a) | require banknote rules to include provision for determining the value |
| 30 |
of backing assets to be held, |
| |
(b) | require backing assets in the form of banknotes to be held either— |
| |
(i) | by the Bank of England, or |
| |
(ii) | at one or more locations approved by the Bank of England, and |
| |
(c) | require backing assets held in the form of coins to be held at one or |
| 35 |
more locations approved by the Bank of England. |
| |
(4) | The regulations may make other provision about backing assets; including, in |
| |
| |
(a) | provision requiring a proportion of a bank’s backing assets to consist of |
| |
assets of a specified kind; |
| 40 |
|
| |
|
| |
|
(b) | provision about the manner in which backing assets may or must be |
| |
| |
(c) | provision about ownership of and interests in backing assets; |
| |
(d) | provision permitting backing assets to be held by an agent of an |
| |
| 5 |
(5) | Banknote regulations may make provision about the treatment of backing |
| |
assets in relation to insolvency processes; in particular, the regulations may— |
| |
(a) | modify or disapply a provision or rule of law about an insolvency |
| |
| |
(b) | protect backing assets from being treated in the same way as other |
| 10 |
| |
(c) | provide for banknotes to be exchanged by bearers within a specified |
| |
| |
(d) | allow the Treasury to extend the period for exchange; |
| |
(e) | provide for exchange to be funded from backing assets; |
| 15 |
(f) | provide for the Bank of England to acquire or control a bank’s backing |
| |
assets for the purpose of administering arrangements for exchange. |
| |
(6) | In subsection (5) “insolvency process” means— |
| |
| |
| 20 |
| |
| |
| |
(f) | a composition between a bank and its creditors, |
| |
(g) | a scheme of arrangement of a bank’s affairs, and |
| 25 |
(h) | a process under the law of a country or territory outside the United |
| |
Kingdom which the Treasury identify, in banknote regulations, as |
| |
serving a similar purpose to any of the processes listed in paragraphs |
| |
| |
| 30 |
(1) | Banknote regulations or rules may make provision about— |
| |
(a) | reports to be made by an authorised bank in respect of the treatment, |
| |
holding or issue of banknotes or in respect of compliance with |
| |
banknote regulations or rules, and |
| |
(b) | information to be given by an authorised bank or an agent of an |
| 35 |
| |
(2) | Banknote regulations may make provision enabling the publication or |
| |
disclosure of information provided in accordance with banknote regulations or |
| |
| |
(3) | Her Majesty’s Revenue and Customs shall transfer to the Bank of England any |
| 40 |
information acquired or held in connection with functions in respect of the |
| |
issue of banknotes in Scotland or Northern Ireland. |
| |
(4) | The Bank of England may use information received in accordance with |
| |
subsection (3) only for the purposes of its functions under or by virtue of this |
| |
| 45 |
|
| |
|
| |
|
205 | Ceasing the business of issuing notes |
| |
(1) | If an authorised bank at any time after commencement stops issuing |
| |
banknotes, it may not resume issuing banknotes in reliance on section 199. |
| |
(2) | Banknote regulations or rules— |
| |
(a) | may specify procedures to be followed by an authorised bank that |
| 5 |
intends to stop issuing banknotes, and |
| |
(b) | may apply to an authorised bank for two years after it stops issuing |
| |
| |
| |
(1) | Banknote regulations may make provision in connection with the application |
| 10 |
to an authorised bank of— |
| |
(a) | the special resolution regime (under Parts 1 to 3), or |
| |
(b) | an insolvency process within the meaning of section 203(6). |
| |
(2) | The regulations may, in particular— |
| |
(a) | provide for the destruction of banknotes which have not been issued; |
| 15 |
(b) | provide for the destruction of banknotes which have been exchanged in |
| |
accordance with section 203(5)(c); |
| |
(c) | extinguish a claim to or interest in un-issued or exchanged banknotes. |
| |
(3) | If a property transfer instrument is made in respect of a bank for the purpose |
| |
of a sale or transfer in accordance with section 10 or 11— |
| 20 |
(a) | the bank loses the right to rely on section 199, and |
| |
(b) | the purchaser or transferee cannot acquire that right (whether by virtue |
| |
of the property transfer instrument or otherwise). |
| |
(4) | The fact that an authorised bank is taken into temporary public ownership in |
| |
accordance with section 12 does not itself prevent the bank from relying on |
| 25 |
| |
(5) | If an authorised bank enters bank insolvency or insolvency it loses the right to |
| |
| |
(6) | Transitional provision of banknote regulations (included in reliance on section |
| |
234(1)(c)) may include provision for a case where a bank loses the right to rely |
| 30 |
on section 199; in particular, the regulations may allow the bank to rely on the |
| |
section for a specified transitional period or in respect of a specified class of |
| |
| |
(7) | A reference in this section to the special resolution regime, to bank insolvency |
| |
or to insolvency includes a reference to any provision of the law of a country |
| 35 |
or territory outside the United Kingdom which the Treasury identifies, in |
| |
banknote regulations, as serving a similar purpose. |
| |
| |
207 | Offence: unlawful issue |
| |
(1) | A person who issues banknotes in Scotland or Northern Ireland otherwise than |
| 40 |
in reliance on section 199 commits an offence. |
| |
(2) | A person guilty of an offence under subsection (1) is liable— |
| |
|
| |
|
| |
|
(a) | on conviction on indictment, to imprisonment for a term not exceeding |
| |
10 years, to a fine or to both, or |
| |
(b) | on summary conviction, to imprisonment for a term not exceeding 12 |
| |
months, to a fine not exceeding the statutory maximum or to both. |
| |
(3) | An offence under subsection (1) committed by a body corporate is also |
| 5 |
committed by an officer of the body (“O”) if the offence— |
| |
(a) | is committed with O’s consent or connivance, or |
| |
(b) | is attributable to O’s negligence. |
| |
(4) | In subsection (3) “officer” means— |
| |
| 10 |
| |
(c) | a secretary or similar officer, and |
| |
(d) | a person purporting to act as an officer within paragraphs (a) to (c). |
| |
(5) | Subsection (3) applies to a partnership constituted under the law of Scotland as |
| |
to a body corporate; for which purpose “officer” means— |
| 15 |
| |
(b) | a person purporting to act as a partner. |
| |
(6) | Proceedings for an offence under subsection (1) may be instituted— |
| |
(a) | in England and Wales, only by the Director of Public Prosecutions, and |
| |
(b) | in Northern Ireland, only by the Director of Public Prosecutions for |
| 20 |
| |
| |
(1) | Banknote regulations may enable the Bank of England to impose a penalty on |
| |
an authorised bank that fails to comply with banknote regulations or rules. |
| |
| 25 |
(a) | shall be paid to the Bank of England, and |
| |
(b) | is enforceable by the Bank of England as a debt. |
| |
209 | Termination of right to issue |
| |
(1) | The Treasury may determine— |
| |
(a) | that an authorised bank has failed to comply with banknote regulations |
| 30 |
| |
(b) | that, having regard to the nature of the failure, the authorised bank |
| |
should no longer be permitted to issue banknotes in reliance on section |
| |
| |
(2) | Before making a determination the Treasury must consult the Bank of England. |
| 35 |
(3) | On making a determination the Treasury shall notify the authorised bank. |
| |
(4) | Upon receipt of the notice the authorised bank loses the right to rely on section |
| |
| |
(5) | If an authorised bank ceases to have permission under Part 4 of the Financial |
| |
Services and Markets Act 2000 (regulated activities) to carry on the regulated |
| 40 |
activity of accepting deposits, it loses the right to rely on section 199 above. |
| |
|
| |
|
| |
|
(6) | The reference in subsection (5) to Part 4 of the Financial Services and Markets |
| |
Act 2000 includes a reference to any provision of the law of another country |
| |
which the Treasury identify, in banknote regulations, as serving a similar |
| |
| |
(7) | Transitional provision of banknote regulations (included in reliance on section |
| 5 |
234(1)(c)) may include provision for a case where a bank loses the right to rely |
| |
on section 199; in particular, the regulations may allow the bank to rely on the |
| |
section for a specified transitional period or in respect of a specified class of |
| |
| |
| 10 |
Banknote regulations may enable the Bank of England to apply to the High |
| |
Court or Court of Session for— |
| |
(a) | relief in respect of failure to comply with banknote regulations or rules, |
| |
| |
(b) | any order designed to ensure, or facilitate monitoring of, compliance |
| 15 |
with a provision of banknote regulations or rules. |
| |
| |
| |
Expenses incurred and sums received by the Bank of England in connection |
| |
with its functions under this Part are to be treated as expenses and receipts of |
| 20 |
| |
212 | Discretionary functions |
| |
(1) | Banknote regulations may confer a discretionary function on the Bank of |
| |
| |
(2) | In particular, banknote regulations— |
| 25 |
(a) | may require compliance with conditions to be imposed (whether |
| |
generally or only for specified cases or circumstances) by the Bank of |
| |
| |
(b) | may make a permission or option subject to the approval of the Bank of |
| |
England (which may be general or only for specified cases or |
| 30 |
| |
(3) | Subsection (2) is in addition to express references in this Part to Bank of |
| |
| |
| |
Section 207(1) does not prohibit the issue of banknotes by the Bank of England. |
| 35 |
|
| |
|
| |
|
| |
| |
Treasury support for banks |
| |
| |
(1) | There shall be paid out of money provided by Parliament expenditure incurred by the |
| 5 |
| |
(a) | for any purpose in connection with Parts 1 to 3 of this Act, |
| |
(b) | in respect of, or in connection with giving, financial assistance to or in respect |
| |
of a UK authorised institution (other than in respect of loans made in |
| |
accordance with section 215), or |
| 10 |
(c) | in respect of financial assistance to the Bank of England. |
| |
| |
(a) | “financial assistance” includes giving guarantees or indemnities and |
| |
any other kind of financial assistance (actual or contingent), |
| |
(b) | “UK authorised institution” means a UK institution which has, or used |
| 15 |
to have, permission under Part 4 of the Financial Services and Markets |
| |
Act 2000 to carry on the regulated activity of accepting deposits (within |
| |
the meaning of section 22 of that Act, taken with Schedule 2 and any |
| |
order under section 22), and |
| |
(c) | “UK institution” means an institution which is incorporated in, or |
| 20 |
formed under the law of any part of, the United Kingdom. |
| |
(3) | This section has effect in relation to expenditure whether incurred— |
| |
(a) | before or after Royal Assent, and |
| |
(b) | in pursuance of obligations entered into before or after Royal Assent. |
| |
| 25 |
(1) | Where the Treasury propose to make a loan to or in respect of a UK authorised |
| |
institution, they may arrange for money to be paid out of the National Loans Fund. |
| |
(2) | In subsection (1) “UK authorised institution” has the same meaning as in |
| |
| |
(3) | The Treasury may make arrangements under subsection (1) only where they |
| 30 |
think it necessary to make the loan urgently in order to protect the stability of |
| |
the financial systems of the United Kingdom. |
| |
(4) | The Treasury shall determine— |
| |
(a) | the rate of interest on a loan, and |
| |
(b) | other terms and conditions. |
| 35 |
(5) | Sums received by the Treasury in respect of loans by virtue of this section shall be paid |
| |
into the National Loans Fund. |
| |
(6) | Neither section 16 of the Banking (Special Provisions) Act 2008 (finance) nor |
| |
any other enactment restricts the breadth of application of this section. |
| |
|
| |
|