House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

3659

House of Commons

Notices of Amendments

given on

Friday 21st November 2008

For other Amendment(s) see the following page(s) of Supplement to Votes:

3625-26

Consideration of Bill

Banking Bill, As Amended

Mr David Gauke

3

Page  36,  line  5,  leave out Clause 72.

Mr Mark Hoban

4

Page  46,  line  6  [Clause  93],  at end insert—

‘(5)
Subsection (4) above does not take precedence over Schedule 6 to the Insolvency

Act 1986.’.

Contingency funding: power to make regulations

Mr Mark Hoban

NC6

To move the following Clause:—

‘After section 214A of the Financial Services and Markets Act 2000

(Contingency funding - inserted by section 164 above) insert—

“214AA
Contingency funding: power to make regulations

The Treasury may make regulations under section 214A only after it has

laid before Parliament a report on the impact of a pre-funded scheme on

the classes of person from whom contributions can be levied and whether

contingency funding is the best way to achieve the special resolution

regime objective set out in section 4 of the Banking Act 2008.”’.

Mr Mark Hoban

5

Page  86,  line  7,  leave out Clause 164.

Notices of Amendments: 21st November 2008
3660

Banking Bill, continued

Mr Mark Hoban

6

Page  4,  line  2  [Clause  5],  leave out ‘and’.

Mr Mark Hoban

7

Page  4,  line  3  [Clause  5],  at end insert ‘, and

(g)
the meaning of “financial stability”.’.

Debt responsibility mechanism

Mr Mark Hoban

NC7

To move the following Clause:—

‘After section 2C of the Bank of England Act 1998 (Financial Stability

Committee: supplemental - inserted by section 225 above) insert—

“2D
Debt responsiblity mechanism

(1)
The Financial Stability Committee must write to the FSA twice a year,

setting out its assessment of financial stability and the FSA must have

regard to that assessment in the exercise of its duties in respect of

paragraph 4 of Schedule 6 to the Financial Services and Markets Act

2000 (threshold conditions: adequate resources).

(2)
The Financial Stability Committee must publish its letter and the FSA

must publish its response.”’.

Order of consideration of stabilisation options

Mr Mark Hoban

NC8

To move the following Clause:—

‘The stabilisation options in sections 11, 12, and 13 must be considered in the

order set out above.’.

Mr Mark Hoban

8

Page  4,  line  27  [Clause  7],  leave out from ‘conditions’ to end of line 28 and insert

‘(within the meaning of paragraph 4 of Schedule 6 to the Financial Services and Markets

Act 2000 (threshold conditions: adequate resources)).’.

Mr Mark Hoban

9

Page  4,  line  3  [Clause  5],  at end insert ‘, and

(g)
on the criteria by which the FSA will judge breach of threshold

conditions.’.

Notices of Amendments: 21st November 2008
3661

Banking Bill, continued

Mr Mark Hoban

10

Page  6,  line  36  [Clause  12],  leave out paragraph (a).

Mr Mark Hoban

11

Page  7,  line  15  [Clause  12],  at end insert—

‘(6)
The primary objective of a bridge bank shall be to facilitate the sale of a bank - in

whole or in part - to one or more private sector purchasers, but if that is not

feasible the bridge bank must be either—

(a)
wound up in a manner that meets the special resolution regime objectives

and is in the interests of the remaining creditors, or

(b)
taken into temporary public ownership.’.

Mr Mark Hoban

12

Page  4,  line  32  [Clause  7],  at end insert—

‘(3A)
Condition 3 is that the FSA has consulted—

(a)
the Bank of England to ensure that it will be able to exercise a

stabilisation power under section 8, or

(b)
the Treasury to ensure that it will be able to exercise its powers under

section 9.’.

Mr Mark Hoban

13

Page  87,  line  12  [Clause  165],  after ‘(2)’, insert ‘Subject to subsection (2A),’.

Mr Mark Hoban

14

Page  87,  line  18  [Clause  165],  at end insert—

‘(2A)
Prior to requiring the scheme manager to contribute towards the exercise of the

stabilisation powers, the Treasury may require—

(a)
a private sector purchaser to make a contribution where the option under

sections 11 or 12 has been exercised, or

(b)
the bank liquidator to make payment where a bank insolvency order has

been made, or

(c)
the bank administrator to make a payment where a bank administration

order has been made.’.

Mr Mark Hoban

15

Page  107,  line  19  [Clause  222],  leave out ‘or other financial institution’.

Mr Mark Hoban

16

Page  107,  line  28  [Clause  223],  leave out ‘or other financial institution’.

Notices of Amendments: 21st November 2008
3662

Banking Bill, continued

Financial Services Compensation Scheme

Mr Mark Hoban

NC9

To move the following Clause:—

‘(1)
The scheme manager must decide, once a stabilisation power has been exercised,

how to achieve Objective 3 of the special resolution regime through—

(a)
the transfer of a relevant account to another financial institution, or

(b)
making a payment to relevant depositors.

(2)
Subsection (1)(a) takes precedence over subsection (1)(b).

(3)
Prior to making its decision the scheme manager must consult—

(a)
the Treasury,

(b)
the Bank of England, and

(c)
the FSA.’.

Mr Mark Hoban

17

Page  86,  line  24  [Clause  164],  at end insert—

‘(da)
arrangements for institutions that have permission under part 4 of the

Financial Services and Markets Act 2000 to carry out the regulated

activity of accepting deposits (within the meaning of section 22 of the

Act, taken with Schedule 2 and by order under section 22) but are not

incorporated in, or formed under the law of, any part of the United

Kingdom;’.

Mr Mark Hoban

18

Page  108,  line  21  [Clause  225],  at end insert—

‘(3)
In doing so, the court of directors must have regard to the guidance on financial

stability given in the code of practice issued in accordance with section 5.’.

Report on exercise of stabilisation powers

Mr Mark Hoban

NC10

To move the following Clause:—

‘(1)
On the exercise of stabilisation powers, the Treasury must lay before Parliament

a report setting out—

(a)
the reason for the exercise by the FSA of its powers under section 7, and

(b)
how the Treasury of the Bank of England then exercised their

stabilisation powers to achieve the special resolution regime objectives.

(2)
Where the Treasury believes the disclosure of certain information in the report in

subsection (1) would adversely affect achieving the special resolution regime

objectives, that information may be withheld from publication for up to six

months from the date on which the stabilisation powers were exercised, but must

be published at the expiration of that period.’.

Notices of Amendments: 21st November 2008
3663

Banking Bill, continued

Special resolution regime: compensation: Sources of compensation

Mr Chancellor of the Exchequer

NC11

To move the following Clause:—

‘(1)
This section applies to—

(a)
compensation scheme orders,

(b)
resolution fund orders,

(c)
third party compensation orders, and

(d)
regulations under section 60.

(2)
An order or regulations may provide for compensation or other payments to be

made by—

(a)
the Treasury,

(b)
the Financial Services Compensation Scheme, subject to section 214B of

the Financial Services and Markets Act 2000 (contribution to costs of

special resolution regime - inserted by section 165 below), or

(c)
any other specified person.’.

Special resolution regime: Continuity obligations: onward property transfers

Mr Chancellor of the Exchequer

NC12

To move the following Clause:—

‘(1)
In this section—

(a)
“onward transfer” means a transfer of property, rights or liabilities

(whether or not under a power in this Part) from—

(i)
a person who is a transferee under a property transfer instrument

under section 12(2) (an “original transferee”), or

(ii)
a bank, securities issued by which were earlier transferred by a

share transfer order under section 13(2), and

(b)
the person to whom the onward transfer is made is referred to as an

“onward transferee”.

(2)
The continuity authority may—

(a)
provide for an obligation under section 62 to apply in respect of an

onward transferee;

(b)
extend section 63 so as to permit action to be taken under section 63(2)

for the purpose of enabling an onward transferee to operate transferred

business, or part of it, effectively.

(3)
“The continuity authority” means—

(a)
the Bank of England, where subsection (1)(a)(i) applies, and

(b)
the Treasury, where subsection (1)(a)(ii) applies.

(4)
Subsection (2) may be relied on to impose obligations on—

(a)
an original transferee (where the original transfer was a property

transfer),

(b)
a residual bank within the meaning of section 62 (where the original

transfer was a property transfer),

(c)
the bank (where the original transfer was a share transfer),

Notices of Amendments: 21st November 2008
3664

Banking Bill, continued

(d)
anything which is or was a group undertaking (within the meaning of

section 1161(5) of the Companies Act 2006) of anything within

paragraphs (a) to (c), or

(e)
any combination.

(5)
Subsection (2) may be used to impose obligations—

(a)
in addition to obligations under or by virtue of section 62 or 63, or

(b)
replacing obligations under or by virtue of either of those sections to a

specified extent.

(6)
A power under subsection (2) is exerciseable by giving a notice to each person—

(a)
on whom a continuity obligation is to be imposed under the power, or

(b)
who is expected to benefit from a continuity obligation under the power.

(7)
Sections 62(3) to (7) and 63(3) and (4) apply to an obligation as applied under

subsection (2)—

(a)
construing “transferred business” as the business transferred by means of

the onward transfer, and

(b)
with any other necessary modification.

(8)
The Bank of England may act under or by virtue of subsection (2) only with the

consent of the Treasury.’.

Special resolution regime: Continuity obligations: onward share transfers

Mr Chancellor of the Exchequer

NC13

To move the following Clause:—

‘(1)
In this section “onward transfer” means a transfer (whether or not under a power

in this Part) of securities issued by a bank where—

(a)
securities issued by the bank were earlier transferred by share transfer

order under section 13(2), or

(b)
the bank was the transferee under a property transfer instrument under

section 12(2).

(2)
The continuity authority may—

(a)
provide for an obligation under section 64 to apply in respect of the bank

after the onward transfer;

(b)
extend section 65 so as to permit action to be taken under section 65(2)

to enable the bank to operate effectively after the onward transfer.

(3)
In this section “continuity authority” has the same meaning as in sections 64 and

65.

(4)
Subsection (2) may be relied on to impose obligations on—

(a)
the bank,

(b)
anything which is or was a group undertaking (within the meaning of

section 1161(5) of the Companies Act 2006) of the bank,

(c)
anything which is or was a group undertaking of the residual bank (in a

case to which subsection (1)(b) applies), or

(d)
any combination.

(5)
Subsection (2) may be used to impose obligations—

(a)
in addition to obligations under or by virtue of section 64 or 65, or

(b)
replacing obligations under or by virtue of either of those sections to a

specified extent.

(6)
A power under subsection (2) is exerciseable by giving a notice to each person—

Notices of Amendments: 21st November 2008
3665

Banking Bill, continued

(a)
on whom a continuity obligation is to be imposed under the power, or

(b)
who is expected to benefit from a continuity obligation under the power.

(7)
Sections 64(3) to (7) and 65(3) and (4) apply to an obligation as applied under

subsection (2) with any necessary modification.

(8)
The Bank of England may act under or by virtue of subsection (2) only with the

consent of the Treasury.’.

Mr Chancellor of the Exchequer

19

Page  1,  line  18  [Clause  1],  after ‘28,’, insert ‘29,’.

Mr Chancellor of the Exchequer

20

Page  1,  line  18  [Clause  1],  after ‘30’, insert ‘, 31’.

Mr Chancellor of the Exchequer

21

Page  1,  line  19  [Clause  1],  after ‘43,’, insert ‘44,’.

Mr Chancellor of the Exchequer

22

Page  1,  line  19  [Clause  1],  for ‘and 45’ insert ‘45 and 46’.

Mr Chancellor of the Exchequer

23

Page  29,  line  21  [Clause  60],  leave out ‘is wound up’ and insert ‘enters

insolvency’.

Mr Chancellor of the Exchequer

24

Page  29,  line  23  [Clause  60],  leave out ‘been wound up’ and insert ‘entered

insolvency’.

Mr Chancellor of the Exchequer

25

Page  29  [Clause  60],  leave out lines 31 and 32 and insert—

‘(c)
the reference to insolvency includes a reference to (i) liquidation, (ii)

bank insolvency, (iii) administration, (iv) bank administration, (v)

receivership, (vi) a composition with creditors, and (vii) a scheme of

arrangement.’.

Mr Chancellor of the Exchequer

26

Page  30  [Clause  60],  leave out lines 12 and 13.

Mr Chancellor of the Exchequer

27

Page  30,  line  32  [Clause  62],  leave out ‘a company’ and insert ‘anything’.