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Banking Bill


Banking Bill
Part 1 — Special Resolution Regime

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(b)   

form part of the deposit-taker’s own funds for the purposes of section

1 of Chapter 2 of Title V of Directive 2006/48/EC (on the taking up and

pursuit of the business of credit institutions).

15      

Share transfer instrument

(1)   

A share transfer instrument is an instrument which—

5

(a)   

provides for securities issued by a specified bank to be transferred;

(b)   

makes other provision for the purposes of, or in connection with, the

transfer of securities issued by a specified bank (whether or not the

transfer has been or is to be effected by that instrument, by another

share transfer instrument or otherwise).

10

(2)   

A share transfer instrument may relate to—

(a)   

specified securities, or

(b)   

securities of a specified description.

16      

Share transfer order

(1)   

A share transfer order is an order which—

15

(a)   

provides for securities issued by a specified bank to be transferred;

(b)   

makes other provision for the purposes of, or in connection with, the

transfer of securities issued by a specified bank (whether or not the

transfer has been or is to be effected by that order, by another share

transfer order or otherwise).

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(2)   

A share transfer order may relate to—

(a)   

specified securities, or

(b)   

securities of a specified description.

17      

Effect

(1)   

In this section “transfer” means a transfer provided for by a share transfer

25

instrument or order.

(2)   

A transfer takes effect by virtue of the instrument or order (and in accordance

with its provisions as to timing or other ancillary matters).

(3)   

A transfer takes effect despite any restriction arising by virtue of contract or

legislation or in any other way.

30

(4)   

In subsection (3) “restriction” includes—

(a)   

any restriction, inability or incapacity affecting what can and cannot be

assigned or transferred (whether generally or by a particular person),

and

(b)   

a requirement for consent (by any name).

35

(5)   

A share transfer instrument or order may provide for a transfer to take effect

free from any trust, liability or other encumbrance (and may include provision

about their extinguishment).

(6)   

A share transfer instrument or order may extinguish rights to acquire securities

falling within Class 1 or 2 in section 14.

40

 
 

Banking Bill
Part 1 — Special Resolution Regime

9

 

18      

Continuity

(1)   

A share transfer instrument or order may provide for a transferee to be treated

for any purpose connected with the transfer as the same person as the

transferor.

(2)   

A share transfer instrument or order may provide for agreements made or

5

other things done by or in relation to a transferor to be treated as made or done

by or in relation to the transferee.

(3)   

A share transfer instrument or order may provide for anything (including legal

proceedings) that relates to anything transferred and is in the process of being

done by or in relation to the transferor immediately before the transfer date, to

10

be continued by or in relation to the transferee.

(4)   

A share transfer instrument or order may modify references (express or

implied) in an instrument or document to a transferor.

(5)   

A share transfer instrument or order may require or permit—

(a)   

a transferor to provide a transferee with information and assistance;

15

(b)   

a transferee to provide a transferor with information and assistance.

19      

Conversion and delisting

(1)   

A share transfer instrument or order may provide for securities to be converted

from one form or class to another.

(2)   

A share transfer instrument or order may provide for the listing of securities,

20

under section 74 of the Financial Services and Markets Act 2000, to be

discontinued.

20      

Directors

(1)   

A share transfer instrument may enable the Bank of England—

(a)   

to remove a director of a specified bank;

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(b)   

to vary the service contract of a director of a specified bank;

(c)   

to terminate the service contract of a director of a specified bank;

(d)   

to appoint a director of a specified bank.

(2)   

A share transfer order may enable the Treasury—

(a)   

to remove a director of a specified bank;

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(b)   

to vary the service contract of a director of a specified bank;

(c)   

to terminate the service contract of a director of a specified bank;

(d)   

to appoint a director of a specified bank.

(3)   

Appointments under subsection (1)(d) are to be on terms and conditions

agreed with the Bank of England.

35

(4)   

Appointments under subsection (2)(d) are to be on terms and conditions

agreed with the Treasury.

21      

Ancillary instruments: production, registration, &c.

(1)   

A share transfer instrument or order may permit or require the execution, issue

or delivery of an instrument.

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Banking Bill
Part 1 — Special Resolution Regime

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(2)   

A share transfer instrument or order may provide for a transfer to have effect

irrespective of—

(a)   

whether an instrument has been produced, delivered, transferred or

otherwise dealt with;

(b)   

registration.

5

(3)   

A share transfer instrument or order may provide for the effect of an

instrument executed, issued or delivered in accordance with the instrument or

order.

(4)   

A share transfer instrument or order may modify or annul the effect of an

instrument.

10

(5)   

A share transfer instrument or order may—

(a)   

entitle a transferee to be registered in respect of transferred securities;

(b)   

require a person to effect registration.

22      

Termination rights, &c.

(1)   

In this section “default event provision” means a provision of a contract or

15

other agreement that if a specified event occurs—

(a)   

the agreement is terminated, modified or replaced,

(b)   

rights or duties under the agreement are terminated, modified or

replaced,

(c)   

a right accrues to terminate, modify or replace the agreement,

20

(d)   

a right accrues to terminate, modify or replace rights or duties under

the agreement,

(e)   

a sum becomes payable or ceases to be payable,

(f)   

delivery of anything becomes due or ceases to be due,

(g)   

a right to claim a payment or delivery accrues, changes or lapses,

25

(h)   

any other right accrues, changes or lapses, or

(i)   

an interest is created, changes or lapses.

(2)   

A share transfer instrument or order may provide for subsection (3) or (4) to

apply (but need not apply either).

(3)   

If this subsection applies, the share transfer instrument or order is to be

30

disregarded in determining whether a default event provision applies.

(4)   

If this subsection applies, the share transfer instrument or order is to be

disregarded in determining whether a default event provision applies except

in so far as the instrument or order provides otherwise.

(5)   

In subsections (3) and (4) a reference to the share transfer instrument or order

35

is a reference to—

(a)   

the making of the instrument or order,

(b)   

anything that is to be, or may be, done under or by virtue of the

instrument or order, and

(c)   

any action or decision taken or made under this or another enactment

40

in so far as it resulted in, or was connected to, the making of the

instrument or order.

(6)   

Provision under subsection (2) may apply subsection (3) or (4) generally or

only for specified purposes.

 
 

Banking Bill
Part 1 — Special Resolution Regime

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23      

Incidental provision

(1)   

A share transfer instrument or order may include incidental, consequential or

transitional provision.

(2)   

In relying on subsection (1) a share transfer instrument or order—

(a)   

may make provision generally or only for specified purposes, and

5

(b)   

may make different provision for different purposes.

24      

Procedure: instruments

(1)   

As soon as is reasonably practicable after making a share transfer instrument

in respect of a bank the Bank of England shall send a copy to—

(a)   

the bank,

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(b)   

the Treasury,

(c)   

the FSA, and

(d)   

any other person specified in the code of practice under section 5.

(2)   

As soon as is reasonably practicable after making a share transfer instrument

the Bank of England shall publish a copy—

15

(a)   

on the Bank’s internet website, and

(b)   

in two newspapers, chosen by the Bank of England to maximise the

likelihood of the instrument coming to the attention of persons likely to

be affected.

25      

Procedure: orders

20

(1)   

A share transfer 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.

(2)   

As soon as is reasonably practicable after making a share transfer order in

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respect of a bank the Treasury shall send a copy to—

(a)   

the bank,

(b)   

the Bank of England,

(c)   

the FSA, and

(d)   

any other person specified in the code of practice under section 5.

30

(3)   

As soon as is reasonably practicable after making a share transfer order the

Treasury shall publish a copy—

(a)   

on the Treasury’s internet website, and

(b)   

in two newspapers, chosen by the Treasury to maximise the likelihood

of the instrument coming to the attention of persons likely to be

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affected.

26      

Supplemental instruments

(1)   

This section applies where the Bank of England has made a share transfer

instrument in accordance with section 11(2) (“the original instrument”).

(2)   

The Bank of England may make one or more supplemental share transfer

40

instruments.

 
 

Banking Bill
Part 1 — Special Resolution Regime

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(3)   

A supplemental share transfer instrument is a share transfer instrument

which—

(a)   

provides for the transfer of securities which were issued by the bank

before the original instrument and have not been transferred by the

original instrument or another supplemental share transfer instrument;

5

(a)   

makes provision of a kind that a share transfer instrument may make

under section 15(1)(b) (whether or not in connection with a transfer

under the original instrument).

(4)   

Sections 7 and 8 do not apply to a supplemental share transfer instrument (but

it is to be treated in the same way as any other share transfer instrument for all

10

other purposes, including for the purposes of the application of a power under

this Part).

(5)   

Before making a supplemental share transfer instrument the Bank of England

must consult—

(a)   

the FSA, and

15

(b)   

the Treasury.

(6)   

The possibility of making a supplemental share transfer instrument in reliance

on subsection (2) is without prejudice to the possibility of making of a new

instrument in accordance with section 11(2) (and not in reliance on subsection

(2) above).

20

27      

Supplemental orders

(1)   

This section applies where the Treasury have made a share transfer order, in

respect of securities issued by a bank, in accordance with section 13(2) (“the

original order”).

(2)   

The Treasury may make one or more supplemental share transfer orders.

25

(3)   

A supplemental share transfer order is a share transfer order which—

(a)   

provides for the transfer of securities which were issued by the bank

before the original order and have not been transferred by the original

order or another supplemental share transfer order;

(b)   

makes provision of a kind that a share transfer order may make under

30

section 16(1)(b), whether in connection with a transfer under the

original order or in connection with a transfer under that or another

supplemental order.

(4)   

Sections 7 and 9 do not apply to a supplemental share transfer order (but it is

to be treated in the same way as any other share transfer order for all other

35

purposes, including for the purposes of the application of a power under this

Part).

(5)   

Before making a supplemental share transfer order the Treasury must

consult—

(a)   

the FSA, and

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(b)   

the Bank of England.

(6)   

The possibility of making a supplemental share transfer order in reliance on

subsection (2) is without prejudice to the possibility of making of a new order

in accordance with section 13(2) (and not in reliance on subsection (2) above).

 
 

 
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