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| |
| | |
63 | Page 54, line 6, after “applied” insert “to a bank liquidator” |
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64 | Page 54, line 7, at end insert— |
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| | | “Section 172(1), (2) and (5) are applied to a |
| | | | | | provisional bank liquidator.” |
| | |
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65 | Page 56, line 28, in column 3 insert— |
|
| | | “Anything done by the bank in |
| | | | | | connection with the exercise of a |
| | | | | | stabilisation power under Part 1 |
| | | | | | of this Act is not a gratuitous |
| | | | | | alienation for the purpose of |
| | | | | | section 242 or any other rule of |
| | | | | | | | |
|
66 | Page 56, line 30, in column 3 insert— |
|
| | | “Action taken by the bank in |
| | | | | | connection with the exercise of a |
| | | | | | stabilisation power under Part 1 |
| | | | | | of this Act does not amount to |
| | | | | | an unfair preference for the |
| | | | | | purpose of section 243 or any |
| | | | | | | | |
|
|
67 | Page 69, line 18, after “supplemental” insert “or reverse” |
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|
68 | Page 77, line 49, at end insert— |
|
| | | “(h) Section 172(1), (2) and (5) apply to a |
| | | | | | provisional bank administrator.” |
| | |
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69 | Page 78, line 31, at end insert— |
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|
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| |
| | |
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|
|
70 | Page 82, line 36, after “bank” insert “(or a bank’s holding company)” |
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71 | Page 82, line 38, after “bank” insert “(or from another bank which is or was in the |
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| |
|
72 | Page 97, line 37, at end insert— |
|
| “(3) | Before giving a direction the Bank must notify the Treasury. |
|
| (4) | The Treasury may by order confer immunity from liability in damages in |
|
| respect of action or inaction in accordance with a direction. |
|
| (5) | An immunity does not extend to action or inaction— |
|
| |
| (b) | in contravention of section 6(1) of the Human Rights Act 1998. |
|
| |
| (a) | shall be made by statutory instrument, and |
|
| (b) | shall be subject to annulment in pursuance of a resolution of either |
|
| |
|
73 | Page 100, line 10, at end insert— |
|
| “(3) | The Bank must prepare a statement of the principles which it will apply in |
|
| |
| (a) | whether to impose a penalty, and |
|
| (b) | the amount of a penalty. |
|
| |
| (a) | publish the statement on its internet website, |
|
| (b) | send a copy to the Treasury, |
|
| (c) | review the statement from time to time and revise it if necessary |
|
| (and paragraphs (a) and (b) apply to a revision), and |
|
| (d) | in applying the statement to a compliance failure, apply the version |
|
| in force when the failure occurred.” |
|
|
74 | Page 109, line 16, at end insert— |
|
|
|
| |
| | |
|
| “(3) | Banknote regulations must establish a method for determining the |
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| maximum amount of a penalty.” |
|
|
75 | Page 110, leave out line 32 |
|
76 | Page 110, line 33, at beginning insert “by the Treasury” |
|
77 | Page 110, line 34, at beginning insert “by the Treasury, or by the Secretary of State |
|
| with the consent of the Treasury,” |
|
78 | Page 110 , line 37, at beginning insert “by the Treasury” |
|
79 | Page 110, line 37, at end insert— |
|
| “(1A) | For the purpose of subsection (1)(b) expenditure is incurred in respect of |
|
| financial assistance in respect of banks or other financial institutions if it is |
|
| incurred in respect of an activity, transaction or arrangement, or class of |
|
| activity, transaction or arrangement, which is expected to facilitate any part |
|
| of the business of one or more banks or other financial institutions; and for |
|
| that purpose it does not matter— |
|
| (a) | whether or not that is the sole or principal expected effect of the |
|
| activity, transaction or arrangement, or |
|
| (b) | whether the sole or principal motive for the activity, transaction or |
|
| arrangement is (i) its effect on banks or other financial institutions, |
|
| (ii) its effect on the economy as a whole, (iii) its effect on a particular |
|
| industry or sector of the economy, or (iv) its effect on actual or |
|
| potential customers of banks or other financial institutions.” |
|
80 | Page 110, line 38, at end insert “(and an order under that section may restrict or |
|
| expand the effect of subsection (1A)).” |
|
81 | Page 111, line 3, at end insert— |
|
| “(4) | Expenditure which could be paid out of money provided by Parliament |
|
| under subsection (1) shall be charged on and paid out of the Consolidated |
|
| Fund if the Treasury are satisfied that the need for the expenditure is too |
|
| urgent to permit arrangements to be made for the provision of money by |
|
| |
| (5) | Where money is paid in reliance on subsection (4) the Treasury shall as |
|
| soon as is reasonably practicable lay a report before Parliament specifying |
|
| the amount paid (but not the identity of the institution to or in respect of |
|
| |
| (6) | If the Treasury think it necessary on public interest grounds, they may |
|
| delay or dispense with a report under subsection (5).” |
|
|
82 | Page 111, line 17, at end insert— |
|
| “(6) | Where money is paid in reliance on subsection (1) the Treasury shall as |
|
| soon as is reasonably practicable lay a report before Parliament specifying |
|
| the amount paid (but not the identity of the institution to or in respect of |
|
| |
| (7) | If the Treasury think it necessary on public interest grounds, they may |
|
| delay or dispense with a report under subsection (6).” |
|
|
|
| |
| | |
|
|
83 | Insert the following new Clause— |
|
| “Transparency: financial assistance |
|
| (1) | The Treasury shall prepare and lay before each House of Parliament a |
|
| quarterly report in respect of— |
|
| (a) | financial assistance paid out under section 225(1); |
|
| (b) | loans made under section 226; |
|
| (c) | guarantees, indemnities or similar arrangements which may result |
|
| in amounts being paid out under section 225(1). |
|
| (2) | The Treasury shall ensure that the report contains sufficient detail to enable |
|
| Parliament to understand the actual and potential commitment of public |
|
| money to financial assistance and the Treasury may summarise the |
|
| individual items which fall to be disclosed in a report in whatever way they |
|
| consider appropriate in order to assist Parliament in that regard. |
|
| (3) | If the Treasury consider that certain information should not be disclosed in |
|
| a report on public interest grounds, a report may omit that information |
|
| until such a time as the Treasury consider that the public interest is no |
|
| |
|
84 | Insert the following new Clause— |
|
| “Investment banks: Definition |
|
| (1) | In this group of sections “investment bank” means an institution which |
|
| satisfies the following conditions. |
|
| (2) | Condition 1 is that the institution has permission under Part 4 of the |
|
| Financial Services and Markets Act 2000 to carry on the regulated activity |
|
| |
| (a) | safeguarding and administering investments, |
|
| (b) | dealing in investments as principal, or |
|
| (c) | dealing in investments as agent. |
|
| (3) | Condition 2 is that the institution holds client assets. |
|
| (4) | In this group of sections “client assets” means assets which an institution |
|
| has undertaken to hold for a client (whether or not on trust and whether or |
|
| not the undertaking has been complied with). |
|
| (5) | Condition 3 is that the institution is incorporated in, or formed under the |
|
| law of any part of, the United Kingdom. |
|
| (6) | The Treasury may by order— |
|
| (a) | provide that a specified class of institution, which has a permission |
|
| under Part 4 of the Financial Services and Markets Act 2000 to carry |
|
| on a regulated activity, is to be treated as an investment bank for the |
|
| purpose of this group of sections; |
|
| (b) | provide that a specified class of institution is not to be treated as an |
|
| investment bank for the purpose of this group of sections; |
|
|
|
| |
| | |
|
| (c) | provide that assets of a specified kind, or held in specified |
|
| circumstances, are to be or not to be treated as client assets for the |
|
| purpose of this group of sections; |
|
| (d) | amend a provision of this section in consequence of provision |
|
| under paragraph (a), (b) or (c).” |
|
85 | Insert the following new Clause— |
|
| “Investment banks: Insolvency regulations |
|
| (1) | The Treasury may by regulations (“Investment bank insolvency |
|
| |
| (a) | modify the law of insolvency in its application to investment banks; |
|
| (b) | establish a new procedure for investment banks where— |
|
| (i) | they are unable, or are likely to become unable, to pay their |
|
| debts (within the meaning of section 90(4)), or |
|
| (ii) | their winding up would be fair (within the meaning of |
|
| |
| (2) | Investment bank insolvency regulations may, in particular— |
|
| (a) | apply or replicate (with or without modifications) or make |
|
| provision similar to provision made by or under the Insolvency Act |
|
| 1986 or Part 2 or 3 of this Act; |
|
| (b) | establish a new procedure either (i) to operate for investment banks |
|
| in place of liquidation or administration (under the Insolvency Act |
|
| 1986), or (ii) to operate alongside liquidation or administration in |
|
| respect of a particular part of the business or affairs of investment |
|
| |
| (3) | In making investment bank insolvency regulations the Treasury shall have |
|
| regard to the desirability of— |
|
| (a) | identifying, protecting, and facilitating the return of, client assets, |
|
| (b) | protecting creditors’ rights, |
|
| (c) | ensuring certainty for investment banks, creditors, clients, |
|
| liquidators and administrators, |
|
| (d) | minimising the disruption of business and markets, and |
|
| (e) | maximising the efficiency and effectiveness of the financial services |
|
| industry in the United Kingdom. |
|
| (4) | A reference to returning client assets includes a reference to— |
|
| (a) | transferring assets to another institution, and |
|
| (b) | returning or transferring assets equivalent to those which an |
|
| institution undertook to hold for clients.” |
|
86 | Insert the following new Clause— |
|
| “Investment banks: Regulations: details |
|
| (1) | Investment bank insolvency regulations may provide for a procedure to be |
|
| |
| |
| (b) | by the action of one or more specified classes of person. |
|
| (2) | Investment bank insolvency regulations may— |
|
|
|
| |
| | |
|
| (a) | confer functions on persons appointed in accordance with the |
|
| regulations (which may, in particular, (i) be similar to the functions |
|
| of a liquidator or administrator under the Insolvency Act 1986, or |
|
| (ii) involve acting as a trustee of client assets), and |
|
| (b) | specify objectives to be pursued by a person appointed in |
|
| accordance with the regulations. |
|
| (3) | Investment bank insolvency regulations may make the application of a |
|
| |
| (a) | on whether an investment bank is, or is likely to become, unable to |
|
| |
| (b) | on whether the winding up of an investment bank would be fair, or |
|
| (c) | partly on those and partly on other considerations. |
|
| (4) | Investment bank insolvency regulations may make provision about the |
|
| relationship between a procedure established by the regulations and— |
|
| (a) | liquidation or administration under the Insolvency Act 1986, |
|
| (b) | bank insolvency or bank administration under Part 2 or 3 of this |
|
| |
| (c) | provision made by or under any other enactment in connection |
|
| |
| (5) | Regulations by virtue of subsection (4) may, in particular— |
|
| (a) | include provision for temporary or permanent moratoria; |
|
| |
| (6) | Investment bank insolvency regulations may include provision— |
|
| (a) | establishing a mechanism for determining which assets are client |
|
| assets (subject to section (Investment banks: Definition)); |
|
| (b) | establishing a mechanism for determining that assets are to be, or |
|
| not to be, treated as client assets (subject to section (Investment |
|
| |
| (c) | about the treatment of client assets; |
|
| (d) | about the treatment of unsettled transactions (and related |
|
| |
| (e) | for the transfer to another financial institution of assets or |
|
| |
| (f) | for the creation or enforcement of rights (including rights that take |
|
| preference over creditors’ rights) in respect of client assets or other |
|
| |
| (g) | indemnifying a person who is exercising or purporting to exercise |
|
| functions under or by virtue of the regulations; |
|
| (h) | for recovery of assets transferred in error. |
|
| (7) | Provision may be included under subsection (6)(f) only to the extent that |
|
| the Treasury think it necessary having regard to the desirability of |
|
| |
| |
| |
| (8) | Investment bank insolvency regulations may confer functions on— |
|
| |
| (b) | the Financial Services Authority, |
|
|
|
| |
| | |
|
| (c) | the Financial Services Compensation Scheme (established under |
|
| Part 15 of the Financial Services and Markets Act 2000), |
|
| (d) | the scheme manager of that Scheme, and |
|
| (e) | any other specified person. |
|
| (9) | Investment bank insolvency regulations may include provision about |
|
| institutions that are or were group undertakings (within the meaning of |
|
| section 1161(5) of the Companies Act 2006) of an investment bank. |
|
| (10) | Investment bank insolvency regulations may replicate or apply, with or |
|
| without modifications, a power to make procedural rules. |
|
| (11) | Investment bank insolvency regulations may include provision for |
|
| assigning or apportioning responsibility for the cost of the application of a |
|
| procedure established or modified by the regulations.” |
|
87 | Insert the following new Clause— |
|
| “Investment banks: Regulations: procedure |
|
| (1) | Investment bank insolvency regulations shall be made by statutory |
|
| |
| (2) | Investment bank insolvency regulations may not be made unless a draft |
|
| has been laid before and approved by resolution of each House of |
|
| |
| (3) | The Treasury must consult before laying draft investment bank insolvency |
|
| regulations before Parliament. |
|
| (4) | If the power to make investment bank insolvency regulations has not been |
|
| exercised before the end of the period of 2 years beginning with the date on |
|
| which this Act is passed, it lapses. |
|
| (5) | An order under section (Investment banks: Definition)(6)— |
|
| (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.” |
|
88 | Insert the following new Clause— |
|
| |
| (1) | The Treasury shall arrange for a review of the effect of any investment bank |
|
| |
| (2) | The review must be completed during the period of 2 years beginning with |
|
| the date on which the regulations come into force. |
|
| (3) | The Treasury shall appoint one or more persons to conduct the review; and |
|
| a person appointed must have expertise in connection with the law of |
|
| insolvency or financial services. |
|
| (4) | The review must consider, in particular— |
|
| (a) | how far the regulations are achieving the objectives specified in |
|
| section (Investment banks: Insolvency regulations)(3), and |
|
| (b) | whether the regulations should continue to have effect. |
|
| (5) | The review must result in a report to the Treasury. |
|
|