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
6Registration
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.”
(5) In section 43 (alteration of floating
charges)— (a) in
subsection (4), for “But paragraph” substitute
“Paragraph”,
and (b) after that subsection
insert— “(4A)
Paragraph (b) of subsection (3) above does not apply in respect of an
alteration if— (a) the
holder of the floating charge is a central institution,
or (b) the holder of the
floating charge is not a central institution but the alteration is to
be made in connection with a floating charge which is held (or which
has been or is to be held) by a central
institution.” (6) In
section 44 (discharge of floating charges), after subsection (3)
add— “(4) This
section does not apply where the floating charge to be discharged
(whether in whole or to a specified extent) is or has been held by a
central
institution.” (7) In
section 47 (interpretation), after “Part—”
insert— ““central
institution”
means— (a) the Bank of
England, (b) the central bank
of a country or territory outside the United Kingdom,
or (c) the European Central
Bank;”.’—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
8Banking
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
10Reverse
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).
(5) Sections 7, 9 and 47 do not apply to a reverse
share transfer order (but it is to be treated in the same way as any
other share transfer order for all other purposes including for the
purposes of the application of a power under this
Part). (6) Before making a
reverse share transfer order the Treasury must
consult— (a) the FSA,
and (b) the Bank of
England. (7) Section 26 applies
where the Treasury have made a reverse share transfer
order.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
11Bridge
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
12Reverse
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
(c) a company wholly owned by a nominee of the
Treasury. (4) A reverse
property transfer instrument is a property transfer instrument
which— (a) provides for
transfer to the transferor under the original instrument (where
subsection (2) applies); (b)
provides for transfer to the bridge bank (where subsection (3)
applies); (c) makes other
provision for the purposes of, or in connection with, the transfer of
property, rights or liabilities that are, could be or could have been
transferred under paragraph (a) or (b) (whether the transfer has been
or is to be effected by that instrument or
otherwise). (5) Sections 7, 8
and 46 do not apply to a reverse property transfer instrument (but it
is to be treated in the same way as any other property transfer
instrument for all other purposes including for the purposes of the
application of a power under this
Part). (6) Before making a
reverse property transfer instrument the Bank of England must
consult— (a) the FSA,
and (b) the
Treasury. (7) Section 39
applies where the Bank of England has made a reverse property transfer
instrument.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
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