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Banking Bill


Banking Bill
Part 1 — Special Resolution Regime

32

 

64      

General continuity obligation: share transfers

(1)   

In this section and section 65

(a)   

“transferred bank” means a bank all or part of the ownership of which

has been transferred in accordance with section 11(2)(a) or 13(2),

(b)   

“former group company” means a company which was a group

5

undertaking in relation to the transferred bank immediately before the

transfer,

(c)   

“group undertaking” has the meaning given by section 1161(5) of the

Companies Act 2006 (interpretation), and

(d)   

“the continuity authority” means—

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(i)   

the Bank of England, where ownership was transferred in

accordance with section 11(2)(a), and

(ii)   

the Treasury, where ownership was transferred in accordance

with section 13(2).

(2)   

Each former group company must provide such services and facilities as are

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required to enable the transferred bank to operate effectively.

(3)   

The duty under subsection (2) (the “continuity obligation”) may be enforced as

if created by contract between the transferred bank and the former group

company.

(4)   

The duty to provide services and facilities in pursuance of the continuity

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obligation is subject to a right to receive reasonable consideration.

(5)   

The continuity obligation is not limited to the provision of services or facilities

directly to the transferred bank.

(6)   

The continuity authority may by notice to a former group undertaking state

that in the authority’s opinion—

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(a)   

specified activities are required to be undertaken in accordance with

the continuity obligation;

(b)   

activities are required be undertaken in accordance with the continuity

obligation on specified terms.

(7)   

A notice under subsection (6) shall be determinative of the nature and extent of

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the continuity obligation as from the time when the notice is given.

65      

Special continuity obligations: share transfers

(1)   

Expressions in this section have the same meaning as in section 64.

(2)   

The continuity authority may—

(a)   

cancel a contract or other arrangement between the transferred bank

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and a former group company;

(b)   

modify the terms of a contract or other arrangement between the

transferred bank and a former group company;

(c)   

confer and impose rights and obligations on a former group company

and the transferred bank, which shall have effect as if created by

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contract between them.

(3)   

In modifying or setting terms under subsection (2) the continuity authority

shall aim, so far as is reasonably practicable, to preserve or include—

(a)   

provision for reasonable consideration, and

 
 

Banking Bill
Part 1 — Special Resolution Regime

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(b)   

any other provision that would be expected in arrangements concluded

between parties dealing at arm’s length.

(4)   

The power under subsection (2)—

(a)   

may be exercised only in so far as the continuity authority thinks it

necessary to ensure the provision of such services and facilities as are

5

required to enable the transferee to operate the transferred business

effectively,

(b)   

may be exercised by the Bank of England only with the consent of the

Treasury, and

(c)   

must be exercised by way of provision in a share transfer instrument or

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order (or supplemental instrument or order).

66      

Continuity obligations: consideration and terms

(1)   

The Treasury may by order specify matters which are to be or not to be

considered in determining—

(a)   

what amounts to reasonable consideration for the purpose of sections

15

62 to 65;

(b)   

what provisions to include in accordance with section 58(3)(b) or

65(3)(b).

(2)   

An order—

(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.

(3)   

A continuity authority may give guarantees or indemnities in respect of

consideration for services or facilities provided or to be provided in pursuance

of a continuity obligation.

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(4)   

In this section “continuity authority”—

(a)   

in relation to sections 62 and 63, means the Bank of England, and

(b)   

in relation to sections 64 and 65, has the same meaning as in those

sections.

67      

Continuity obligations: termination

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(1)   

The continuity authority may by notice terminate an obligation arising under

section 62 or 64.

(2)   

The power under subsection (1) is exerciseable by giving a notice to each

person—

(a)   

on whom the obligation is imposed, or

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(b)   

who has benefited or might have expected to benefit from the

obligation.

(3)   

In this section “continuity authority”—

(a)   

in relation to section 62, means the Bank of England, and

(b)   

in relation to section 64, has the same meaning as in that section.

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68      

Pensions

(1)   

This section applies to—

 
 

Banking Bill
Part 1 — Special Resolution Regime

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(a)   

share transfer orders,

(b)   

share transfer instruments, and

(c)   

property transfer instruments.

(2)   

An order or instrument may make provision—

(a)   

about the consequences of a transfer for a pension scheme;

5

(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;

(b)   

apportion rights and liabilities;

(c)   

transfer property of, or accrued rights in, one pension scheme to

10

another (with or without consent).

(4)   

Provision by virtue of this section may (but need not) amend the terms of a

pension scheme.

(5)   

A share or property transfer instrument may make provision in reliance on this

section only with the consent of the Treasury.

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(6)   

In this section—

(a)   

“pension scheme” includes any arrangement for the payment of

pensions, allowances and gratuities, and

(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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69      

Enforcement

(1)   

The Treasury may by regulations make provision for the enforcement of

obligations imposed by or under—

(a)   

a share transfer order,

(b)   

a share transfer instrument, or

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(c)   

a property transfer instrument.

(2)   

Regulations—

(a)   

may confer jurisdiction on a court or tribunal;

(b)   

may not impose a penalty or create a criminal offence;

(c)   

may make provision which has effect in respect of an order or

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instrument only if applied by the order or instrument.

(3)   

Regulations—

(a)   

shall be made by statutory instrument, and

(b)   

shall be subject to annulment in pursuance of a resolution of either

House of Parliament.

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70      

Disputes

(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 include provision for disputes to be determined

in a specified manner.

 
 

Banking Bill
Part 1 — Special Resolution Regime

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(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.

71      

Tax

(1)   

The Treasury may by regulations make provision about the fiscal

5

consequences of the exercise of a stabilisation power.

(2)   

Regulations may relate to—

(a)   

capital gains tax;

(b)   

corporation tax;

(c)   

income tax;

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(d)   

inheritance tax;

(e)   

stamp duty;

(f)   

stamp duty land tax;

(g)   

stamp duty reserve tax.

(3)   

Regulations may apply to—

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(a)   

anything done in connection with an instrument or order;

(b)   

things transferred or otherwise affected by virtue of an instrument or

order;

(c)   

a transferor or transferee under an instrument or order;

(d)   

persons otherwise affected by an instrument or order.

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(4)   

Regulations may—

(a)   

modify or disapply an enactment;

(b)   

provide for an action to have or not have specified consequences;

(c)   

provide for specified classes of property (including securities), rights or

liabilities to be treated, or not treated, in a specified way;

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(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

with provision made by or in accordance with the regulations.

(5)   

Regulations may make provision for the fiscal consequences of the exercise of

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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

(b)   

on or after that date.

(6)   

In relation to the exercise of a supplemental or onward instrument or order

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under section 26, 27, 28, 30, 42, 43 or 45, 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.

(7)   

The Treasury may by order amend subsection (2) so as to—

(a)   

add an entry, or

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(b)   

remove an entry.

(8)   

Regulations or an order under this section shall be made by statutory

instrument.

 
 

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Part 1 — Special Resolution Regime

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(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

resolution of the House of Commons.

72      

Power to change law

5

(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.

(2)   

An order may be made—

(a)   

for the general purpose of the exercise of powers under this Part,

10

(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

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

15

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

(b)   

disapply or modify the effect of a rule of law not set out in legislation.

(5)   

Provision under this section may relate to this Part as it applies—

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(a)   

to banks,

(b)   

to building societies,

(c)   

to credit unions (by virtue of section 83), or

(d)   

to any combination.

(6)   

Specific powers under this Part are without prejudice to the generality of this

25

section.

(7)   

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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(8)   

But if the Treasury think it necessary to make an order without complying with

subsection (7)(b)—

(a)   

the order may be made,

(b)   

the order shall lapse unless approved by resolution of each House of

Parliament during the period of 28 days (ignoring periods of

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dissolution, prorogation or adjournment of either House for more than

4 days) beginning with the day on which the order is made,

(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

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(d)   

the lapse of an order under paragraph (b) does not prevent the making

of a new order.

 
 

 
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