Office of Public Sector Information
PART 3 continued
A bank administrator is an officer of the court.
(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 145).
(2) The bank administrator must as soon as is reasonably practicable after appointment make a statement setting out proposals for achieving the Objectives in section 137.
(3) The statement must say whether the bank administrator proposes to pursue Objective 2(a) or 2(b) in section 140.
(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 B1 to the Insolvency Act 1986 (as applied by section 145); 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) 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.
(1) This section applies to bank administration following transfer to a bridge bank.
(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 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 137.
(4) Until the Bank of England has given an Objective 1 Achievement Notice, the bank administrator must—
(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 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 137, and
(f) keep the bridge bank informed about, and allow the bridge bank to 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 137.
(5) The Treasury shall by regulations prescribe—
(a) the classes of information that must be provided under subsections (2) to (4), and
(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
(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(1) This section applies where more than one property transfer instrument is made 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.
(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 resolution of each House of Parliament.
(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 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 continues to apply—
(a) in accordance with section 138(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—
(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 139 and other provisions of this Part which refer to the giving of an Objective 1 Achievement Notice shall have effect.
(1) This section applies where the Bank of England —
(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 (“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
(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 subsection (2)(b), Objective 1 shall apply in accordance with section 138(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 a determination under subsection (3), Objective 1 shall apply in accordance with—
(a) section 138(3) in relation to services provided by the original bridge bank to the onward transferee, and
(b) section 138(4) in relation to services provided by the original bank to the original bridge bank.
(6) But the Bank may determine—
(a) that subsection (5) does not apply, and
(b) that section 150 shall apply as if the Bank had given—
(i) an Objective 1 Interim Achievement Notice in respect of the original bridge bank, and
(ii) a notice under section 150(1)(b) in respect of the onward transferee.
(1) This section applies where the Treasury—
(a) make a share transfer order, in respect of securities issued by a bank (or a bank’s holding company), in accordance with section 13(2), and
(b) later make a property transfer order from the bank (or from another bank which is or was in the same group as 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.
(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.
(1) This section applies if—
(a) the Bank of England has given an Objective 1 Achievement Notice, and
(b) the bank administrator has pursued Objective 2(a) in section 140 and believes that it has been achieved.
(2) The bank administrator may give a notice under paragraph 80 of Schedule B1 to the Insolvency Act 1986 (notice bringing administrator’s appointment to an end on achievement of objectives).
(3) A bank administrator who gives a notice in accordance with subsection (2) must send a copy to the FSA.
(4) Failure without reasonable excuse to comply with subsection (3) is an offence.
(1) This section applies if—
(a) the Bank of England has given an Objective 1 Achievement Notice, and
(b) the bank administrator pursues Objective 2(b) in section 140.
(2) The bank administrator may—
(a) give a notice under paragraph 84 of Schedule B1 to the Insolvency Act 1986 (no more assets for distribution), or
(b) make a proposal in accordance with section 1 of that Act (company voluntary arrangement).
(3) Part 1 of that Act shall apply to a proposal made by a bank administrator, with the following modifications.
(4) In section 3 (summoning of meetings) subsection (2) (and not (1)) applies.
(5) The action that may be taken by the court under section 5(3) (effect of approval) includes suspension of the bank administration order.
(6) On the termination of a company voluntary arrangement the bank administrator may apply to the court to lift the suspension of the bank administration order.
(7) The bank administrator may not act under subsection (2) above unless satisfied that the bank has received any funds it is likely to receive from any scheme under a resolution fund order under section 52.
(1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986.
(2) In the Disqualification Act—
(a) a reference to liquidation includes a reference to bank administration,
(b) a reference to winding up includes a reference to making or being subject to a bank administration order,
(c) a reference to becoming insolvent includes a reference to becoming subject to a bank administration order, and
(d) a reference to a liquidator includes a reference to a bank administrator.
(3) For the purposes of the application of section 7(3) of the Disqualification Act (disqualification order or undertaking) to a bank which is subject to a bank administration order, the responsible office-holder is the bank administrator.
(4) After section 21A of the Disqualification Act (bank insolvency – inserted by section 121 above) insert—
Section 155 of the Banking Act 2009 provides for this Act to apply in relation to bank administration as it applies in relation to liquidation.”
(1) The Secretary of State and the Treasury may by order made jointly—
(a) provide for an enactment about insolvency or administration to apply to bank administration (with or without specified modifications);
(b) amend, or modify the application of, an enactment about insolvency or administration in consequence of this Part.
(2) An order under subsection (1)—
(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.
(1) Before exercising an insolvency power in respect of a residual bank the FSA must give notice to the Bank of England, which may participate in any proceedings arising out of the exercise of the power.
(2) In subsection (1)—
(a) “residual bank” means a bank all or part of whose business has been transferred to a commercial purchaser in accordance with section 11 or to a bridge bank in accordance with section 12, and
(b) “insolvency power” means—
(i) section 359 of the Financial Services and Markets Act 2000 (application for administration order), and
(ii) section 367 of that Act (winding-up petition).
(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.
(2) An order may—
(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, a provision of this Part;
(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.
(3) An order—
(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.
(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 (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.
(2) An order may—
(a) amend the Credit Union 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, a provision of this Part;
(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.
(3) An order—
(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.
(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) Section 411 of the Insolvency Act 1986 (company insolvency rules) is amended as follows.
(2) After subsection (1A) (inserted by section 125 above) insert—
“(1B) Rules may also be made for the purpose of giving effect to Part 3 of the Banking Act 2009 (bank administration); and rules for that purpose shall be made—
(a) in relation to England and Wales, by the Lord Chancellor with the concurrence of—
(i) the Treasury, and
(ii) in the case of rules that affect court procedure, the Lord Chief Justice, or
(b) in relation to Scotland, by the Treasury.”
(3) In subsection (2), after “(1A)” (inserted by section 125 above) insert “or (1B)”.
(4) After subsection (2C) (inserted by section 125 above) insert—
“(2D) 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 3 of the Banking Act 2009.”
(5) In subsection (3)—
(a) after “bank liquidator” (inserted by section 125 above) insert “or administrator”, and
(b) after “Part 2” (inserted by section 125 above) insert “or 3”.
(6) 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 reliance on this section.
After section 414(8A) of the Insolvency Act 1986 (fees orders – inserted by section 126 above) insert—
“(8B) This section applies in relation to Part 3 of the Banking Act 2009 (bank administration) as in relation to Parts I to VII of this Act.”
In section 433(1) of the Insolvency Act 1986 (admissibility of statements of affairs) after paragraph (aa) (inserted by section 128 above) insert (before the “and”)—
“(ab) a statement made in pursuance of a requirement imposed by or under Part 3 of that Act (bank administration),”.
(1) The Lord Chancellor may, by order made with the concurrence of the Secretary 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 (partnerships).
(3) This section does not apply in relation to partnerships constituted under the law of Scotland.
(1) The Secretary of State may by order modify provisions of this Part in their application to partnerships constituted under the law of Scotland.
(2) 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.
(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 (after the subsection added by section 129) add—
“(14) Section 165 of the Banking Act 2009 provides for provisions of that Act about bank administration to be “insolvency law” for the purposes of this section.”
(1) In this Part “the court” means—
(a) in England and Wales, the High Court,
(b) in Scotland, the Court of Session, and
(c) in Northern Ireland, the High Court.
(2) In this Part “the FSA” means the Financial Services Authority.
(3) For the purposes of a reference in this Part to inability to pay debts—
(a) a bank that is in default on an obligation to pay a sum due and payable under an agreement, is to be treated as unable to pay its debts, and
(b) section 123 of the Insolvency Act 1986 (inability to pay debts) also applies; and
for the purposes of paragraph (a) “agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the bank.
(4) Expressions used in this Part and in the Insolvency Act 1986 have the same meaning as in that Act.
(5) Expressions used in this Part and in the Companies Act 2006 have the same meaning as in that Act.
(6) A reference in this Part to action includes a reference to inaction.
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 enactment having effect in relation to Northern Ireland,
(c) the reference in section 159 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 1985, and
(d) in section 163—
(i) the reference to the Secretary of State is to be treated as a reference to the Department for Enterprise, Trade and Investment, and
(ii) the reference to the Lord Chief Justice is a reference to the Lord Chief Justice in Northern Ireland.
(1) The Treasury may by order make provision in consequence of this Part.
(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.
(3) An order—
(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.
Banking Act 2009