|
| |
|
| |
| |
(1) | For the purpose of co-operating in the pursuit of Objective 1 in section 96 the |
| |
| |
(a) | may make or arrange for payments to or in respect of eligible |
| 5 |
depositors of the bank, and |
| |
(b) | may make money available to facilitate the transfer of accounts of |
| |
eligible depositors of the bank. |
| |
(2) | The FSCS may include provision about expenditure under this section; and, in |
| |
| 10 |
(a) | money may be raised through the imposition of a levy under Part 15 of |
| |
the Financial Services and Markets Act in respect of expenditure or |
| |
possible expenditure under this section, and |
| |
(b) | sums raised in connection with the scheme (whether or not under |
| |
paragraph (a)) may be expended under this section. |
| 15 |
(3) | In section 220(3)(a) of the Financial Services and Markets Act 2000 |
| |
(Compensation Scheme: information) after “liquidator” insert “, bank |
| |
| |
(4) | The FSCS is entitled to participate in proceedings for or in respect of a bank |
| |
| 20 |
(5) | A bank liquidator must— |
| |
(a) | comply with a request of the FSCS for the provision of information, and |
| |
(b) | provide the FSCS with any other information which the bank liquidator |
| |
thinks might be useful for the purpose of co-operating in the pursuit of |
| |
| 25 |
(6) | A bank liquidator may enter into an agreement under section 221A of the |
| |
Financial Services and Markets Act 2000 (Compensation Scheme: delegation of |
| |
functions) for the bank liquidator to exercise functions of the scheme manager |
| |
for the purpose of facilitating the pursuit of Objective 1. |
| |
(7) | Where a bank insolvency order is made in respect of a bank, the fact that it later |
| 30 |
ceases to be an authorised person does not prevent the operation of the |
| |
compensation scheme in respect of it; and for that purpose the bank is a |
| |
relevant person within the meaning of section 213(9) of the Financial Services |
| |
and Markets Act 2000 despite the lapse of authorisation. |
| |
| 35 |
(1) | This section applies where a bank liquidator arranges, in pursuit of Objective |
| |
1 in section 96, for the transfer of eligible depositors’ accounts from the bank to |
| |
another financial institution. |
| |
(2) | The arrangements may disapply, or provide that they shall have effect despite, |
| |
any restriction arising by virtue of contract or legislation or in any other way. |
| 40 |
(3) | In subsection (2) “restriction” includes— |
| |
(a) | any restriction, inability or incapacity affecting what can and cannot be |
| |
assigned or transferred (whether generally or by a particular person), |
| |
| |
|
| |
|
| |
|
(b) | a requirement for consent (by any name). |
| |
(4) | In making the arrangements mentioned in subsection (1) the bank liquidator |
| |
must ensure that eligible depositors will be able to remove money from |
| |
transferred accounts as soon as is reasonably practicable after transfer. |
| |
| 5 |
(1) | Section 411 of the Insolvency Act 1986 (company insolvency rules) is amended |
| |
| |
(2) | After subsection (1) insert— |
| |
“(1A) | Rules may also be made for the purpose of giving effect to Part 2 of the |
| |
Banking Act 2008 (bank insolvency orders); and rules for that purpose |
| 10 |
| |
(a) | in relation to England and Wales, by the Lord Chancellor with |
| |
| |
| |
(ii) | in the case of rules that affect court procedure, the Lord |
| 15 |
| |
(b) | in relation to Scotland, by the Treasury.” |
| |
| |
(a) | after “subsection (1),” insert “(1A)”; |
| |
(b) | in paragraph (b), after “Secretary of State” insert “or the Treasury”. |
| 20 |
(4) | After subsection (2B) insert— |
| |
“(2C) | 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 |
| |
includes a reference to doing anything under or for the purposes of Part |
| |
2 of the Banking Act 2008.” |
| 25 |
| |
(a) | after “provisional liquidator” insert “or bank liquidator”, and |
| |
(b) | after “Parts I to VII of this Act” insert “or Part 2 of the Banking Act |
| |
| |
(6) | In subsection (5), after “the Secretary of State” insert “or the Treasury”. |
| 30 |
(7) | In paragraph 27 of Schedule 8 to the Insolvency Act 1986 (provisions capable |
| |
of inclusion in company insolvency rules), after “Secretary of State” insert “or |
| |
| |
(8) | Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency |
| |
Rules Committee) shall not apply to the first set of rules which is made in |
| 35 |
reliance on this section. |
| |
| |
After section 414(8) of the Insolvency Act 1986 (fees orders) insert— |
| |
“(8A) | This section applies in relation to Part 2 of the Banking Act 2008 (bank |
| |
insolvency) as in relation to Parts I to VII of this Act.” |
| 40 |
|
| |
|
| |
|
124 | Insolvency Services Account |
| |
A bank liquidator who obtains money by realising assets in the course of the |
| |
bank insolvency must pay it into the Insolvency Services Account (kept by the |
| |
| |
| 5 |
In section 433(1) of the Insolvency Act 1986 (admissibility of statements of |
| |
affairs) after paragraph (a) insert (before the “and”)— |
| |
“(aa) | a statement made in pursuance of a requirement imposed by or |
| |
under Part 2 of the Banking Act 2008 (bank insolvency),”. |
| |
126 | Co-operation between courts |
| 10 |
(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). |
| |
(2) | At the end of that section add— |
| |
“(13) | Section 126 of the Banking Act 2008 provides for provisions of that Act |
| |
about bank insolvency to be “insolvency law” for the purposes of this |
| 15 |
| |
| |
(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 |
| |
applies to banks, subject to modifications set out in the order. |
| 20 |
| |
(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; |
| |
(c) | replicate, with or without modifications, any provision of this Part; |
| 25 |
(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. |
| |
| |
(a) | shall be made by statutory instrument, and |
| |
(b) | may not be made unless a draft has been laid before and approved by |
| 30 |
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. |
| |
| |
(1) | The Treasury may by order provide for this Part to apply to credit unions |
| 35 |
(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. |
| |
| |
|
| |
|
| |
|
(a) | amend the Credit Unions 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, any provision of this Part; |
| 5 |
(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. |
| |
| |
(a) | shall be made by statutory instrument, and |
| |
(b) | may not be made unless a draft has been laid before and approved by |
| 10 |
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. |
| |
| |
(1) | The Lord Chancellor may, by order made with the concurrence of the Secretary |
| 15 |
of State and the Lord Chief Justice, modify provisions of this Part in their |
| |
application to partnerships. |
| |
(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 |
| |
| 20 |
(3) | This section does not apply in relation to partnerships constituted under the |
| |
| |
130 | 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. |
| 25 |
| |
(a) | shall be made by statutory instrument, and |
| |
(b) | shall be subject to annulment in pursuance of a resolution of either |
| |
| |
| 30 |
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 |
| 35 |
enactment having effect in relation to Northern Ireland, |
| |
(c) | references to the Secretary of State, except in section 119, are to be |
| |
treated as references to the Department of Enterprise, Trade and |
| |
| |
(d) | a reference to the Insolvency Services Account is to be treated as a |
| 40 |
reference to the Insolvency Account, |
| |
|
| |
|
| |
|
(e) | a reference 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 |
| |
| |
(f) | the Judgments Enforcement (Northern Ireland) Order 1981 has effect in |
| |
place of sections 183 and 184 of the Insolvency Act 1986 (applied by |
| 5 |
| |
(g) | the reference in section 129 to the Lord Chief Justice is a reference to the |
| |
Lord Chief Justice in Northern Ireland. |
| |
132 | Consequential provision |
| |
(1) | The Treasury may by order make provision in consequence of this Part. |
| 10 |
(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. |
| |
| |
(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. |
| |
| |
| |
| |
| 20 |
(1) | This Part provides for a procedure to be known as bank administration. |
| |
(2) | The main features of bank administration are that— |
| |
(a) | it is used where part of the business of a bank is sold to a commercial |
| |
purchaser in accordance with section 11 or transferred to a bridge bank |
| |
in accordance with section 12 (and it can also be used in certain cases of |
| 25 |
multiple transfers under Part 1), |
| |
(b) | the court appoints a bank administrator on the application of the Bank |
| |
| |
(c) | the bank administrator is able and required to ensure that the non-sold |
| |
or non-transferred part of the bank (“the residual bank”) provides |
| 30 |
services or facilities required to enable the commercial purchaser (“the |
| |
private sector purchaser”) or the transferee (“the bridge bank”) to |
| |
| |
(d) | in other respects the process is the same as for normal administration |
| |
under the Insolvency Act 1986, subject to specified modifications. |
| 35 |
(3) | The Table describes the provisions of this Part. |
| |
|
|
| |
|
| |
|
|
|
| 5 |
(1) | A bank administrator has two objectives— |
| |
(a) | Objective 1: support for commercial purchaser or bridge bank (see |
| |
| |
(b) | Objective 2: “normal” administration (see section 137). |
| |
(2) | Objective 1 takes priority over Objective 2 (but a bank administrator is obliged |
| 10 |
to begin working towards both objectives immediately upon appointment). |
| |
135 | Objective 1: supporting private sector purchaser or bridge bank |
| |
(1) | Objective 1 is to ensure the supply to the private sector purchaser or bridge |
| |
bank of such services and facilities as are required to enable it, in the opinion |
| |
of the Bank of England, to operate effectively. |
| 15 |
(2) | For the purposes of Objective 1— |
| |
(a) | the reference to services and facilities includes a reference to acting as |
| |
transferor or transferee under a supplemental property transfer |
| |
| |
(b) | the reference to “supply” includes a reference to supply by persons |
| 20 |
other than the residual bank. |
| |
(3) | In the case of bank administration following a private sector purchase the bank |
| |
administrator must co-operate with any request of the Bank of England to enter |
| |
into an agreement for the residual bank to provide services or facilities to the |
| |
private sector purchaser; and— |
| 25 |
(a) | in pursuing Objective 1 the bank administrator must have regard to the |
| |
terms of that or any other agreement entered into between the residual |
| |
bank and the private sector purchaser, |
| |
(b) | in particular, the bank administrator must avoid action that is likely to |
| |
prejudice performance by the residual bank of its obligations in |
| 30 |
accordance with those terms, |
| |
(c) | if in doubt about the effect of those terms the bank administrator may |
| |
apply to the court for directions under paragraph 63 of Schedule B1 to |
| |
the Insolvency Act 1986 (applied by section 142 below), and |
| |
(d) | the private sector purchaser may refer to the court a dispute about any |
| 35 |
agreement with the residual bank, by applying for directions under |
| |
paragraph 63 of Schedule B1. |
| |
(4) | In the case of bank administration following transfer to a bridge bank, the bank |
| |
administrator must co-operate with any request of the Bank of England to enter |
| |
into an agreement for the residual bank to provide services or facilities to the |
| 40 |
| |
(a) | the bank administrator must avoid action that is likely to prejudice |
| |
performance by the residual bank of its obligations in accordance with |
| |
| |
|
| |
|
| |
|
(b) | the bank administrator must ensure that so far as is reasonably |
| |
practicable an agreement entered into includes provision for |
| |
consideration at market rate, |
| |
(c) | paragraph (b) does not prevent the bank administrator from entering |
| |
into an agreement on any terms that the bank administrator thinks |
| 5 |
necessary in pursuit of Objective 1, and |
| |
(d) | this subsection does not apply after Objective 1 ceases. |
| |
(5) | Where a bank administrator requires the Bank of England’s consent or |
| |
approval to any action in accordance with this Part, the Bank may withhold |
| |
consent or approval only on the grounds that the action might prejudice the |
| 10 |
achievement of Objective 1. |
| |
136 | Objective 1: duration |
| |
(1) | Objective 1 ceases if the Bank of England notifies the bank administrator that |
| |
the residual bank is no longer required in connection with the private sector |
| |
purchaser or bridge bank. |
| 15 |
(2) | A bank administrator who thinks that Objective 1 is no longer required may |
| |
apply to the court for directions under paragraph 63 of Schedule B1 to the |
| |
Insolvency Act 1986 (applied by section 142 below); and the court may direct |
| |
the Bank of England to consider whether to give notice under subsection (1) |
| |
| 20 |
(3) | If immediately upon the making of a bank administration order the Bank of |
| |
England thinks that the residual bank is not required in connection with the |
| |
private sector purchaser or bridge bank, the Bank of England may give a notice |
| |
| |
(4) | A notice under subsection (1) is referred to in this Part as an “Objective 1 |
| 25 |
| |
137 | Objective 2: “normal” administration |
| |
| |
(a) | rescue the residual bank as a going concern (“Objective 2(a)”), or |
| |
(b) | achieve a better result for the residual bank’s creditors as a whole than |
| 30 |
would be likely if the residual bank were wound up without first being |
| |
in bank administration (“Objective 2(b)”). |
| |
(2) | In pursuing Objective 2 a bank administrator must aim to achieve Objective |
| |
2(a) unless of the opinion either— |
| |
(a) | that it is not reasonably practicable to achieve it, or |
| 35 |
(b) | that Objective 2(b) would achieve a better result for the residual bank’s |
| |
| |
(3) | In pursuing Objective 2(b) in bank administration following transfer to a |
| |
bridge bank, the bank administrator may not realise any asset unless— |
| |
(a) | the asset is on a list of realisable assets agreed between the bank |
| 40 |
administrator and the Bank of England, or |
| |
(b) | the Bank of England has given an Objective 1 Achievement Notice. |
| |
|
| |
|