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Other Bills before Parliament

Banking Bill


Banking Bill
Part 3 — Bank Administration

82

 

150     

Application of other law

(1)   

The Secretary of State and the Treasury may by order made jointly—

(a)   

provide for an enactment about insolvency or administration to apply

to bank administration (with or without specified modifications);

(b)   

amend, or modify the application of, an enactment about insolvency or

5

administration in consequence of this Part.

(2)   

An order under subsection (1)—

(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.

10

151     

Other processes

(1)   

Before exercising an insolvency power in respect of a residual bank the FSA

must give notice to the Bank of England, which may participate in any

proceedings arising out of the exercise of the power.

(2)   

In subsection (1)—

15

(a)   

“residual bank” means a bank all or part of whose business has been

transferred to a commercial purchaser in accordance with section 11 or

to a bridge bank in accordance with section 12, and

(b)   

“insolvency power” means—

(i)   

section 359 of the Financial Services and Markets Act 2000

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(application for administration order), and

(ii)   

section 367 of that Act (winding-up petition).

152     

Building societies

(1)   

The Treasury may by order provide for this Part to apply to building societies

(within the meaning of section 119 of the Building Societies Act 1986) as it

25

applies to banks, subject to modifications set out in the order.

(2)   

An order may—

(a)   

amend the Building Societies Act 1986 or any other enactment which

relates, or in so far as it relates, to building societies;

(b)   

amend an enactment amended by this Part;

30

(c)   

replicate, with or without modifications, a provision of this Part;

(d)   

apply a provision made under or by virtue of this Part, with or without

modifications, to this Part as it applies to building societies.

(3)   

An order—

(a)   

shall be made by statutory instrument, and

35

(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

relation to the application of this Part to building societies.

 
 

Banking Bill
Part 3 — Bank Administration

83

 

153     

Credit unions

(1)   

The Treasury may by order provide for this Part to apply to credit unions

(within the meaning of section 31 of the Credit Unions Act 1979) as it applies

to banks, subject to modifications set out in the order.

(2)   

An order may—

5

(a)   

amend the Credit Union Act 1979, the Industrial and Providential

Societies Act 1965 or any other enactment which relates, or in so far as

it relates, to credit unions;

(b)   

amend an enactment amended by this Part;

(c)   

replicate, with or without modifications, a provision of this Part;

10

(d)   

apply a provision made under or by virtue of this Part, with or without

modifications, to this Part as it applies to credit unions.

(3)   

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

15

resolution of each House of Parliament.

(4)   

Provision made under or by virtue of this Part may make special provision in

relation to the application of this Part to credit unions.

154     

Rules

(1)   

Section 411 of the Insolvency Act 1986 (company insolvency rules) is amended

20

as follows.

(2)   

After subsection (1A) (inserted by section 119 above) insert—

“(1B)   

Rules may also be made for the purpose of giving effect to Part 3 of the

Banking Act 2008 (bank administration); and rules for that purpose

shall be made—

25

(a)   

in relation to England and Wales, by the Lord Chancellor with

the concurrence of—

(i)   

the Treasury, and

(ii)   

in the case of rules that affect court procedure, the Lord

Chief Justice, or

30

(b)   

in relation to Scotland, by the Treasury.”

(3)   

In subsection (2), after “(1A)” (inserted by section 119 above) insert “or (1B)”.

(4)   

After subsection (2C) (inserted by section 119 above) insert—

“(2D)   

For the purposes of subsection (2), a reference in Schedule 8 to this Act

to doing anything under or for the purposes of a provision of this Act

35

includes a reference to doing anything under or for the purposes of Part

3 of the Banking Act 2008.”

(5)   

In subsection (3)—

(a)   

after “bank liquidator” (inserted by section 119 above) insert “or

administrator”, and

40

(b)   

after “Part 2” (inserted by section 119 above) insert “or 3”.

 
 

Banking Bill
Part 3 — Bank Administration

84

 

155     

Fees

After section 414(8A) of the Insolvency Act 1986 (fees orders - inserted by

section 120 above) insert—

“(8B)   

This section applies in relation to Part 3 of the Banking Act 2008 (bank

administration) as in relation to Parts I to VII of this Act.”

5

156     

Evidence

In section 433(1) of the Insolvency Act 1986 (admissibility of statements of

affairs) after paragraph (aa) (inserted by section 122 above) insert (before the

“and”)—

“(ab)   

a statement made in pursuance of a requirement imposed by or

10

under Part 3 of that Act (bank administration),”.

157     

Partnerships

(1)   

The Lord Chancellor may, by order made with the concurrence of the Secretary

of State and the Lord Chief Justice, modify provisions of this Part in their

application to partnerships.

15

(2)   

For procedural purposes an order under subsection (1) shall be treated in the

same way as an order under section 420 of the Insolvency Act 1986

(partnerships).

(3)   

This section does not apply in relation to partnerships constituted under the

law of Scotland.

20

158     

Scottish partnerships

(1)   

The Secretary of State may by order modify provisions of this Part in their

application to partnerships constituted under the law of Scotland.

(2)   

An order—

(a)   

shall be made by statutory instrument, and

25

(b)   

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

House of Parliament.

159     

Co-operation between courts

(1)   

Provisions of or by virtue of this Part are “insolvency law” for the purposes of

section 426 of the Insolvency Act 1986 (co-operation between courts).

30

(2)   

At the end of that section (after the subsection added by section 123) add—

“(14)   

Section 159 of the Banking Act 2008 provides for provisions of that Act

about bank administration to be “insolvency law” for the purposes of

this section.”

160     

Interpretation: general

35

(1)   

In this Part “the court” means—

(a)   

in England and Wales, the High Court,

(b)   

in Scotland, the Court of Session, and

(c)   

in Northern Ireland, the High Court.

 
 

Banking Bill
Part 3 — Bank Administration

85

 

(2)   

In this Part “the FSA” means the Financial Services Authority.

(3)   

For the purposes of a reference in this Part to inability to pay debts—

(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

5

applies; and

   

for the purposes of paragraph (a) “agreement” means an agreement the

making or performance of which constitutes or is part of a regulated activity

carried on by the bank.

(4)   

Expressions used in this Part and in the Insolvency Act 1986 have the same

10

meaning as in that Act.

(5)   

Expressions used in this Part and in the Companies Act 2006 have the same

meaning as in that Act.

(6)   

A reference in this Part to action includes a reference to inaction.

161     

Northern Ireland

15

In the application of this Part to Northern Ireland—

(a)   

a reference to an enactment is to be treated as a reference to the

equivalent enactment having effect in relation to Northern Ireland,

(b)   

where this Part amends an enactment an equivalent amendment

(incorporating any necessary modification) is made to the equivalent

20

enactment having effect in relation to Northern Ireland,

(c)   

the reference in section 153 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, and

(d)   

in section 157

25

(i)   

the reference to the Secretary of State is to be treated as a

reference to the Department for Enterprise, Trade and

Investment, and

(ii)   

the reference to the Lord Chief Justice is a reference to the Lord

Chief Justice in Northern Ireland.

30

162     

Consequential provision

(1)   

The Treasury may by order make provision in consequence of this Part.

(2)   

An order may, in particular, amend or modify the effect of an enactment

(including a fiscal enactment) passed before the commencement of this Part.

(3)   

An order—

35

(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.

 
 

Banking Bill
Part 4 — Financial Services Compensation Scheme

86

 

Part 4

Financial Services Compensation Scheme

163     

Overview

This Part makes a number of amendments in connection with the Financial

Services Compensation Scheme provided for by Part 15 of the Financial

5

Services and Markets Act 2000.

164     

Contingency funding

(1)   

After section 214 of the Financial Services and Markets Act 2000 (compensation

scheme: general) insert—

“214A   

    Contingency funding

10

(1)   

The Treasury may make regulations (“contingency fund regulations”)

permitting the scheme manager to impose levies under section 213 for

the purpose of maintaining contingency funds from which possible

expenses may be paid.

(2)   

Contingency fund regulations may make provision about the

15

establishment and management of contingency funds; in particular, the

regulations may make provision about—

(a)   

the number and size of funds;

(b)   

the circumstances and timing of their establishment;

(c)   

the classes of person from whom contributions to the funds may

20

be levied;

(d)   

the amount and timing of payments into and out of funds

(which may include provision for different levies for different

classes of person);

(e)   

refunds;

25

(f)   

the ways in which funds’ contents may be invested (including

(i) the extent of reliance on section 223A, and (ii) the application

of investment income);

(g)   

the purposes for which funds may be applied, but only so as to

determine whether a fund is to be used (i) for the payment of

30

compensation, (ii) for the purposes of co-operating with a bank

liquidator in accordance with section 93 of the Banking Act

2008, or (iii) for contributions under section 214B;

(h)   

procedures to be followed in connection with funds, including

the keeping of records and the provision of information.

35

(3)   

The compensation scheme may include provision about contingency

funds provided that it is not inconsistent with contingency fund

regulations.”

(2)   

At the end of section 213(7) (compensation scheme: further provision) add

“(except where limitations are expressly stated)”.

40

(3)   

In section 218 (compensation scheme: annual report)—

(a)   

in subsection (1) after “to the Authority” insert “and the Treasury”, and

(b)   

at the end of subsection (2)(b) add “or in contingency fund regulations.”

 
 

 
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