Banking Bill


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New Clause 5

“Enactment”
‘In this Act “enactment” includes—
(a) subordinate legislation,
(b) an Act of the Scottish Parliament and an instrument under an Act of the Scottish Parliament, and
(c) Northern Ireland legislation.’.—[Ian Pearson.]
Brought up, read the First and Second time, and added to the Bill.

New Clause 6

Registration of charges: Scotland
‘(1) The Bankruptcy and Diligence etc. (Scotland) Act 2007 is amended as follows.
(2) In section 38 (creation of floating charges)—
(a) in subsection (3), after “to” insert “subsection (3A) and”, and
(b) after that subsection insert—
“(3A) If a floating charge is granted in favour of a central institution, it is created only when the document granting the floating charge is executed by the company granting the charge.”
(3) In section 39 (advance notice of floating charges), after subsection (3) add—
“(4) This section does not apply where a company proposes to grant a floating charge in favour of a central institution.”
(4) In section 42 (assignation of floating charges), after subsection (3) add—
“(4) This section does not apply where a floating charge is assigned (whether in whole or to a specified extent) to or by a central institution.”
Brought up, read the First and Second time, and added to the Bill.

New Clause 8

Banking Liaison Panel
‘(1) The Treasury shall make arrangements for a panel to advise the Treasury about the exercise of powers to make statutory instruments under or by virtue of this Part, Part 2 or Part 3 (excluding the stabilisation powers, compensation scheme orders, resolution fund orders and third party compensation orders).
(2) The Treasury shall ensure that the panel includes—
(a) a member appointed by the Treasury,
(b) a member appointed by the Bank of England,
(c) a member appointed by the FSA,
(d) a member appointed by the scheme manager of the Financial Services Compensation Scheme,
(e) one or more persons who in the Treasury’s opinion represent the interests of banks,
(f) one or more persons who in the Treasury’s opinion have expertise in law relating to the financial systems of the United Kingdom, and
(g) one or more persons who in the Treasury’s opinion have expertise in insolvency law and practice.’.—[Ian Pearson.]
Brought up, and read the First time.
11.45 am
Ian Pearson: I beg to move, That the clause be read a Second time.
As hon. Members will by now know, in October I set up an expert liaison group to advise Ministers on the development of the secondary legislation that will implement the Bill’s special resolution regime provisions. When I met stakeholders they requested that that group be formalised in legislation, and the new clause is a direct response to that request. The clause places the Government’s stakeholder consultation group, known as the expert liaison group, on a permanent statutory footing. It is designed to formalise the role of this important mechanism of Government consultation with the financial services industry. The expert liaison group will advise the Government on the development of secondary legislation related to parts 1, 2 and 3 of the Bill, such as the safeguards for partial transfers. I hope that the expert liaison group will also be able to help the Government review secondary legislation in the light of practical experience and developments in the financial markets.
The expert liaison group will advise the Government on the permanent secondary legislation relating to parts 1 to 3 of the Bill. It will not have input into any specific orders such as the stabilisation powers, compensation schemes, the resolution fund and third-party compensation orders, as consultation on such matters would be inappropriate due to the market-sensitive nature of such orders and the potential need to exercise these powers on a very urgent basis.
As hon. Members will know, the initial focus of the group is very much on secondary legislation on partial transfer safeguards and the group has already contributed significantly to the development of the proposals on which we are currently consulting. I look forward to the group’s continued engagement on this. While not mentioned in the new clause, there could be a role for the group in wider matters such as the development of the code of practice and, over time, reviewing the SRR in general. As I have said before, we will consult the expert liaison group over any changes made to clause 65 and its application to the Banking Bill to strengthen legal certainty around that vital power. The new clause provides for the expert liaison group to include representatives from the Treasury, the FSA, the Bank of England and the Financial Services Compensation Scheme. It also provides for the Treasury to appoint persons it believes are able to represent banks and persons who, in the Treasury’s opinion, have expertise in financial services and insolvency law. The Treasury will chair the group which is consistent with its role in formulating Government policy. I believe that the expert liaison group has already shown its value in advising the Government on some of the safeguards relating to the Bill.
Mr. Gauke: As briefly as possible: one, we welcome this and two, will the minutes of the banking liaison panel be published?
Dr. Pugh: Just to make a simple point again, does the new clause address the concerns felt within the banking industry? Looking at the list of people appointed, they are largely appointed by branches of Government, or thought to be okay according to Government. I would like the Minister’s assurance that the expert liaison group is not just another name for Government advisers under one guise or another but genuinely reflects the wider concerns of the financial services industry.
Ian Pearson: I can certainly tell the hon. Gentleman that this is not just a group of Government advisers. The initial meeting that I attended with the British Bankers Association and other representatives, who are now members of the expert liaison group, did not give a clue that this was a cosy little grouping of Government appointees. That is not what we want to see. We want an expert liaison group that is representative of the industry, can provide us with technical import and help us initially with secondary legislation and potentially more widely.
With regard to whether minutes will be published, I do not see the expert liaison group as working in the formalised way in which minutes would be published on a website. It is more there to provide technical advice. If the group felt it wanted to publish minutes or a memorandum, I would not have a problem agreeing. The group may also be discussing market-sensitive issues that it would not wish disclosed. I would be happy to take that issue back to the expert liaison group and ask it whether it felt that such publication were necessary. If the group felt that that would help, I would not object to it.
Question put and agreed to.
Clause read a Second time, and added to the Bill.

New Clause 9

“Financial assistance”
‘(1) In this Act “financial assistance” includes giving guarantees or indemnities and any other kind of financial assistance (actual or contingent).
(2) The Treasury may by order provide that a specified activity or transaction, or class of activity or transaction, is to be or not to be treated as financial assistance for a specified purpose of this Act; and subsection (1) is subject to this subsection.
(3) An order—
(a) shall be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.’.—[Ian Pearson.]
Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Reverse share transfer
‘(1) This section applies where the Treasury have made a share transfer order in accordance with section 12(2) (“the original order”) providing for the transfer of securities issued by a bank to a person (“the original transferee”).
(2) The Treasury may make one or more reverse share transfer orders in respect of securities issued by the bank and held by the original transferee (whether or not they were transferred by the original order).
(3) If the Treasury makes an onward share transfer order in respect of securities transferred by the original order, the Treasury may make one or more reverse share transfer orders in respect of securities—
(a) issued by the bank, and
(b) held by a transferee under the onward share transfer order of any of the following kinds—
(i) a company wholly owned by the Bank of England,
(ii) a company wholly owned by the Treasury, or
(iii) a nominee of the Treasury.
(4) A reverse share transfer order is a share transfer order which—
(a) provides for transfer to the transferor under the original order (where subsection (2) applies);
(b) provides for transfer to the original transferee (where subsection (3) applies);
(c) makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a) or (b).
Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Bridge bank: reverse share transfer
‘(1) This section applies where the Bank of England has made a bridge bank share transfer instrument in accordance with section 28(2) (“the original instrument”) providing for the transfer of securities to—
(a) a company wholly owned by the Bank of England,
(b) a company wholly owned by the Treasury, or
(c) a nominee of the Treasury.
(2) The Bank of England may make one or more bridge bank reverse share transfer instruments in respect of securities issued by the bridge bank and held by a person within subsection (1)(a) to (c).
(3) A bridge bank reverse share transfer instrument is a share transfer instrument which—
(a) provides for transfer to the transferor under the original instrument;
(b) makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a).
(4) Sections 7, 8 and 47 do not apply to a bridge bank reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Part).
(5) Before making a bridge bank reverse share transfer instrument the Bank of England must consult—
(a) the FSA, and
(b) the Treasury.
(6) Section 25 applies where the Bank of England has made a bridge bank reverse share transfer instrument.’.—[Ian Pearson.]
Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Reverse property transfer
‘(1) This section applies where the Bank of England has made a property transfer instrument in accordance with section 11(2) (“the original instrument”) providing for the transfer of property, rights or liabilities to a bridge bank.
(2) The Bank of England may make one or more reverse property transfer instruments in respect of property, rights or liabilities of the bridge bank.
(3) If the Bank of England makes an onward property transfer instrument under section 40 the Bank may make one or more reverse property transfer instruments in respect of property, rights or liabilities of a transferee of any of the following kinds under the onward property transfer instrument——
(a) a company wholly owned by the Bank of England,
(b) a company wholly owned by the Treasury, or
Brought up, read the First and Second time, and added to the Bill.
 
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Prepared 19 November 2008