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Banking Bill


Banking Bill
Part 3 — Bank Administration

78

 
 

Section

Subject

Modification or comment

 
 

Section

Discretion in managing and

In the case of bank administration following

 
 

168(4) (and

distributing assets

transfer to a bridge bank, until the Bank of

 
 

para. 13 of

 

England has given an Objective 1

 
 

Schedule 4)

 

Achievement Notice distribution may be

 

5

   

made only—

 
   

(a)   

with the Bank of England’s consent,

 
   

or

 
   

(b)   

out of assets which have been

 
   

designated as realisable by

 

10

   

agreement between the bank

 
   

administrator and the Bank of

 
   

England.

 
 

Section

Unsecured creditors

In the case of bank administration following

 
 

176A

 

transfer to a bridge bank, until the Bank of

 

15

   

England has given an Objective 1

 
   

Achievement Notice distribution may be

 
   

made in reliance on s. 176A only—

 
   

(a)   

with the Bank of England’s consent,

 
   

or

 

20

   

(b)   

out of assets which have been

 
   

designated as realisable by

 
   

agreement between the bank

 
   

administrator and the Bank of

 
   

England.

 

25

 

Section 178

Disclaimer of onerous property

In the case of bank administration following

 
   

transfer to a bridge bank, until the Bank of

 
   

England has given an Objective 1

 
   

Achievement Notice notice of disclaimer may

 
   

be given only with the Bank of England’s

 

30

   

consent.

 
 

Section 188

Publicity

  
 

Section 213

Fraudulent trading

  
 

Section 214

Wrongful trading

Ignore subsection (6).

 
 

Section 233

Utilities

  

35

 

Section 234

Getting in company’s property

  
 

Section 235

Co-operation with liquidator

  
 

Section 236

Inquiry into company’s dealings

  
 

Section 237

Section 236: enforcement by

  
  

court

  

40

 

Section 238

Transactions at undervalue

  
  

(England and Wales)

  
 

Section 239

Preferences (England and

  
  

Wales)

  
 

Section 240

Ss. 238 & 239: relevant time

  

45

 

Section 241

Orders under ss. 238 & 239

(a)   

In considering making an order in

 
   

reliance on section 241 the court

 
   

must have regard to Objective 1 of

 
   

section 134.

 
   

(b)   

Ignore subsections (2A)(a) and (3) to

 

50

   

(3C)).

 
 

Section 242

Gratuitous alienations

  
  

(Scotland)

  
 
 

Banking Bill
Part 3 — Bank Administration

79

 
 

Section

Subject

Modification or comment

 
 

Section 243

Unfair preferences (Scotland)

In considering the grant of a decree under

 
   

subsection (5) the court must have regard to

 
   

Objective 1 of section 134.

 
 

Section 244

Extortionate credit transactions

  

5

 

Section 245

Avoidance of floating charges

  
 

Section 246

Unenforceability of liens

  
 

Sections 386

Preferential debts

  
 

& 387, and

   
 

Schedule 6

   

10

 

(and

   
 

Schedule 4

   
 

to the

   
 

Pension

   
 

Schemes Act

   

15

 

1993)

   
 

Section 389

Offence of acting without being

Treat references to acting as an insolvency

 
  

qualified

practitioner as references to acting as a bank

 
   

administrator.

 
 

Section 390

Persons not qualified to act

Treat references to acting as an insolvency

 

20

   

practitioner as references to acting as a bank

 
   

administrator.

 
 

Section 391

Recognised professional bodies

An order under section 391 has effect in

 
   

relation to any provision applied for the

 
   

purposes of bank administration.

 

25

 

Sections 423

Transactions defrauding

(a)   

In considering granting leave under

 
 

- 425

creditors

section 424(1) the court must have

 
   

regard to Objective 1 of section 134.

 
   

(b)   

In considering making an order in

 
   

reliance on section 425 the court

 

30

   

must have regard to Objective 1 of

 
   

section 134.

 
 

Sections 430

Offences

  
 

- 432 &

   
 

Schedule 10

   

35

 

Section 433

Statements: admissibility

For section 433(1)(a) and (b) substitute a

 
   

reference to a statement prepared for the

 
   

purposes of a provision of this Part.

 
 

143     

Status of bank administrator

A bank administrator is an officer of the court.

40

144     

Administrator’s proposals

(1)   

This section applies before the giving of an Objective 1 Achievement Notice (at

which point paragraph 49 of Schedule B1 to the Insolvency Act 1986 applies in

accordance with section 142).

(2)   

The bank administrator must as soon as is reasonably practicable after

45

appointment make a statement setting out proposals for achieving the

Objectives in section 134.

 
 

Banking Bill
Part 3 — Bank Administration

80

 

(3)   

The statement must say whether the bank administrator proposes to pursue

Objective 2(a) or 2(b) in section 137.

(4)   

The statement must have been agreed with the Bank of England.

(5)   

But a bank administrator who is unable to agree a statement with the Bank of

England may apply to the court for directions under paragraph 63 of Schedule

5

B1 to the Insolvency Act 1986 (as applied by section 142); and the court may

make any order, including dispensing with the need for the Bank of England’s

agreement.

(6)   

The bank administrator must send the statement to the FSA.

(7)   

The bank administrator may revise the statement (and subsections (4) to (6)

10

apply to a revised statement as to the original).

(8)   

The statement shall be treated in the same way (subject to this section) as a

statement under paragraph 49 of Schedule B1 to the Insolvency Act 1986.

145     

Sharing information

(1)   

This section applies to bank administration following transfer to a bridge bank.

15

(2)   

Within the period of 5 days beginning with the day on which the bank

administrator is appointed, the Bank of England must give the bank

administrator information about the financial positions of the residual bank

and the bridge bank.

(3)   

While the residual bank is in bank administration the bridge bank must give

20

the bank administrator on request information about the financial position of

the bridge bank that the bank administrator requires for the purposes of

pursuing Objective 1 in section 134.

(4)   

Until the Bank of England has given an Objective 1 Achievement Notice, the

bank administrator must—

25

(a)   

give the Bank of England information on request,

(b)   

allow the Bank of England access to records on request,

(c)   

give the bridge bank information on request,

(d)   

allow the bridge bank access to records on request,

(e)   

keep the Bank of England informed about, and allow the Bank to

30

participate in, any discussions between the bank administrator and

another person which relate to, or are likely to affect, pursuit of

Objective 1 in section 134, and

(f)   

keep the bridge bank informed about, and allow the bridge bank to

participate in, any discussions between the bank administrator and

35

another person which relate to, or are likely to affect, pursuit of

Objective 1 in section 134.

(5)   

The Treasury shall by regulations prescribe—

(a)   

the classes of information that must be provided under subsections (2)

to (4), and

40

(b)   

the classes of record to which access must be allowed under subsection

(4).

(6)   

Regulations under subsection (5)—

(a)   

shall be made by statutory instrument, and

 
 

Banking Bill
Part 3 — Bank Administration

81

 

(b)   

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

House of Parliament.

Multiple transfers

146     

General application of this Part

(1)   

This section applies where more than one property transfer instrument is made

5

in respect of a bank.

(2)   

For that purpose “property transfer instrument” includes—

(a)   

supplemental instruments under section 42,

(b)   

onward property transfer instruments under section 43, and

(c)   

property transfer orders under section 45.

10

(3)   

This Part applies to the bank with any modifications specified by the Treasury

in regulations.

(4)   

The regulations—

(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.

147     

Bridge bank to private purchaser

(1)   

This section applies where the Bank of England gives a bank administrator —

(a)   

an Objective 1 Achievement Notice in respect of a bridge bank, and

(b)   

notice that Objective 1 is still required to be pursued in respect of a

20

commercial purchaser who has acquired all or part of the business of

the bridge bank.

(2)   

An Objective 1 Achievement Notice accompanied by a notice under subsection

(1)(b) is referred to in this Part as an Objective 1 Interim Achievement Notice.

(3)   

Where an Objective 1 Interim Achievement Notice is given, Objective 1

25

continues to apply—

(a)   

in accordance with section 135(3), and

(b)   

with the commercial purchaser being treated as the “private sector

purchaser”.

(4)   

An Objective 1 Interim Achievement Notice in respect of the bridge bank—

30

(a)   

has effect as between the bank administrator and the bridge bank, but

(b)   

has no other effect for the purposes of provisions of this Part which

refer to the giving of an Objective 1 Achievement Notice.

(5)   

When the Bank of England gives the bank administrator an Objective 1

Achievement Notice in respect of the commercial purchaser, section 136 and

35

other provisions of this Part which refer to the giving of an Objective 1

Achievement Notice shall have effect.

148     

Property transfer from bridge bank

(1)   

This section applies where the Bank of England —

 
 

Banking Bill
Part 3 — Bank Administration

82

 

(a)   

transfers all or part of the business of a bank (“the original bank”) to a

bridge bank (“the original bridge bank”) by making a property transfer

instrument in accordance with section 12(2), and

(b)   

later makes or proposes to make an onward property transfer

instrument under section 43(2) from the bridge bank to a transferee

5

(“the onward transferee”).

(2)   

If the onward transferee is a company which is wholly owned by the Bank of

England—

(a)   

the onward transferee is treated as a bridge bank for the purposes of

this Part, and

10

(b)   

the original bridge bank is treated as a residual bank for the purposes

of this Part.

(3)   

In any other case, the Bank of England may determine that the original bridge

bank is to be treated as a residual bank for the purposes of this Part.

(4)   

Where the original bridge bank is put into bank administration in reliance on

15

subsection (2)(b), Objective 1 shall apply in accordance with section 135(4) in

relation to both—

(a)   

services provided by the original bank to the original bridge bank, and

(b)   

services provided by the original bridge bank to the onward transferee.

(5)   

Where the original bridge bank is put into bank administration in reliance on

20

a determination under subsection (3), Objective 1 shall apply in accordance

with—

(a)   

section 135(3) in relation to services provided by the original bridge

bank to the onward transferee, and

(b)   

section 135(4) in relation to services provided by the original bank to

25

the original bridge bank.

(6)   

But the Bank may determine—

(a)   

that subsection (5) does not apply, and

(b)   

that section 147 shall apply as if the Bank had given—

(i)   

an Objective 1 Interim Achievement Notice in respect of the

30

original bridge bank, and

(ii)   

a notice under section 147(1)(b) in respect of the onward

transferee.

149     

Property transfer from temporary public ownership

(1)   

This section applies where the Treasury—

35

(a)   

make a share transfer order, in respect of securities issued by a bank, in

accordance with section 13(2), and

(b)   

later make a property transfer order from the bank under section 45(2).

(2)   

This Part applies to the transferor under the property transfer order as to the

transferor under a property transfer instrument.

40

(3)   

For that purpose this Part applies with any modifications specified by the

Treasury in regulations; and the regulations—

(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.

45

 
 

 
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