Office of Public Sector Information
PART 1 continued
(1) Where the Bank of England transfers all or part of a bank’s business to a bridge bank, the Bank must report to the Chancellor of the Exchequer about the activities of the bridge bank.
(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer to the bridge bank.
(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.
(4) The Chancellor of the Exchequer must lay a copy of each report under subsection (2) or (3) before Parliament.
(5) The Bank must comply with any request of the Treasury for a report dealing with specified matters in relation to a bridge bank.
(6) A request under subsection (5) may include provision about—
(a) the content of the report;
(b) timing.
(1) Where the Treasury make one or more share transfer orders under section 13(2) in respect of a bank, the Treasury must lay before Parliament a report about the activities of the bank.
(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first share transfer order.
(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.
(4) The obligation to produce reports continues to apply in respect of each year until the first during which no securities issued by the bank are owned by—
(a) a company wholly owned by the Treasury, or
(b) a nominee of the Treasury.
(1) The Treasury may take a parent undertaking of a bank (the “holding company”) into temporary public ownership, in accordance with section 13(2), if the following conditions are met.
(2) Condition 1 is that the FSA are satisfied that the general conditions for the exercise of a stabilisation power set out in section 7 are met in respect of the bank.
(3) Condition 2 is that the Treasury are satisfied that it is necessary to take action in respect of the holding company for the purpose specified in Condition A or B of section 9.
(4) Condition 3 is that the holding company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(5) Before determining whether Condition 2 is met the Treasury must consult—
(a) the FSA, and
(b) the Bank of England.
(6) Expressions used in this section have the same meaning as in the Companies Act 2006.
(1) In the following provisions references to banks include references to holding companies—
(a) section 10(1),
(b) section 13(3),
(c) section 16(1), and
(d) section 75(5)(a).
(2) Where the Treasury take a bank’s holding company into temporary public ownership in reliance on section 82—
(a) section 20(2) applies to (i) directors of the holding company, (ii) directors of the bank, and (iii) directors of a bank in the same group,
(b) section 25(2) applies as if references to a bank were references to a holding company,
(c) sections 27 to 29 apply as if references to a bank were references to a holding company,
(d) a share transfer may be made in respect of securities which were issued by the bank or by another bank which is or was in the same group; and a transfer—
(i) shall be made by onward share transfer order under section 28 or by reverse share transfer order under section 29 (in addition to any that may be made under those sections as applied by paragraph (c) above),
(ii) may be made under section 28 only in respect of securities held by (or for the benefit of) the holding company or a subsidiary undertaking of the holding company,
(iii) is not subject to section 28(4),
(iv) may be made under section 29 only in respect of securities held by a person of a kind listed in section 29(3)(b), and
(v) is not (otherwise) subject to section 29(3),
(e) section 45 applies as if—
(i) the reference to a bank in subsection (1) were a reference to a holding company, and
(ii) a reference to the bank in subsection (3) were a reference to the holding company, the bank and any other bank which is or was in the same group,
(f) sections 65 to 68 apply, with—
(i) references to the bank or the transferred bank taken as references to the bank, the holding company and any other bank which is or was in the same group, and
(ii) references to securities of the bank taken as including references to securities of the holding company (so that, in particular, sections 65(1)(a)(ii) and 68(1)(a) include references to the earlier transfer of securities issued by the holding company),
(g) other provisions of this Act about share transfer orders apply with any necessary modifications,
(h) section 214B of the Financial Services and Markets Act 2000 applies (contribution to costs of special resolution regime – inserted by section 171 below), and
(i) the reference in section 214B(1)(b) to the bank, and later references in the section, are treated as including references to any other bank which is also a subsidiary undertaking of the holding company (but not to the holding company itself).
(3) A reference in this Act or another enactment to a share transfer order in respect of securities issued by a bank includes (so far as the context permits) a reference to a share transfer order in respect of securities issued by a holding company.
(4) In so far as sections 47 and 60 apply in relation to orders treated as property transfer instruments by virtue of section 45(5)(b) or 46(5)(b) (including those sections as applied by virtue of subsection (2) above) the reference in section 47(1) to the property of a bank includes a reference to the property of a holding company and of any other bank which is or was in the same group.
(5) Expressions used in this section have the same meaning as in the Companies Act 2006.
(6) A reference to two banks being in the same group is a reference to their being group undertakings in respect of each other.
This Part shall apply to building societies (within the meaning of section 119 of the Building Societies Act 1986) as it applies to banks, subject to the provisions of the Table.
| Section | Topic | Modification or note |
|---|---|---|
| 11 | Private sector purchaser | A share transfer instrument may not be made. |
| 13 | Temporary public ownership | The procedure provided by section 85 has effect in place of share transfer orders. |
| 14 to 32 | Transfer of securities | The procedure provided by section 85 has effect in place of share transfer orders; and— (a)
sections 28 and 30 do not apply, and (b)
section 27 applies following an order under section 85 as following a share transfer order. |
| 33 | Property transfer instrument: nature | A property transfer instrument in respect of a building society may— (a)
cancel shares in the building society; (b)
confer rights and impose liabilities in place of cancelled shares (whether by way of actual or deemed shares in a transferee building society or by way of other rights and liabilities in relation to a transferee bank). |
| 33 and 36 | Property transfer instrument: continuity | A property transfer instrument in respect of a bank which provides for transfer to a building society may confer rights and impose liabilities by way of actual or deemed shares in the building society. |
| 34 | Property transfer instrument: effect | A property transfer instrument may, in particular, have effect without causing sections 93 to 102D of the Building Societies Act 1986 (mergers and transfers) to apply. |
| 42 | Supplemental property transfer instrument | A supplemental property transfer instrument in respect of a building society may— (a)
cancel shares in the building society; (b)
confer rights and impose liabilities in place of cancelled shares (whether by way of actual or deemed shares in a transferee building society or by way of other rights and liabilities in relation to a transferee bank). |
| 45 | Temporary public ownership: property transfer | (a)
Section 45 applies following an order under section 85 as following a share transfer order. (b)
A property transfer order in respect of a building society may cancel shares in the building society. |
| 49 to 62 | Compensation | (a)
A reference to a share transfer order includes a reference to an order under section 85. (b)
A resolution fund order may not be made under section 51(2)(b). (c)
If and in so far as an order under section 85 provides for the issue of new deferred shares, section 51(2) shall not apply. |
| 63 to 75 | Incidental functions | A reference to a share transfer order includes a reference to an order under section 85. |
(1) For the purpose of exercising the third stabilisation option in respect of a building society the Treasury may make one or more orders for the purposes of—
(a) arranging for deferred shares of a building society to be publicly owned,
(b) cancelling private membership rights in the building society,
(c) allowing the building society to continue in business while in public ownership, and
(d) eventually either winding up or dissolving the building society.
(2) For the purpose specified in subsection (1)(a) an order may—
(a) arrange for the transfer of existing deferred shares;
(b) provide for new deferred shares.
(3) For the purpose of arranging for the transfer of existing deferred shares an order may—
(a) provide for deferred shares to be transferred;
(b) make other provision for the purposes of, or in connection with, the transfer of deferred shares (whether or not the transfer has been or is to be effected by the order, by another order under this section or otherwise);
(c) relate to all or any specified class or description of deferred shares issued by the building society.
(4) For the purpose of providing for new deferred shares an order may—
(a) issue or allow the Treasury to issue new deferred shares on behalf of the building society;
(b) specify or allow the Treasury to specify the terms and effect of new deferred shares;
(c) specify or allow the Treasury to specify the recipient of new deferred shares.
(5) For the purpose specified in subsection (1)(b) an order may—
(a) cancel or permit the cancellation of shares (whether or not deferred) in the building society;
(b) confer rights and impose liabilities, or allow them to be conferred and imposed, in place of cancelled shares;
(c) prevent the issue or acquisition of shares in or other rights in respect of the building society otherwise than in accordance with the order.
(6) For the purpose specified in subsection (1)(c) an order may make any provision which the Treasury think desirable to facilitate the business of the building society after the making of provision in accordance with subsections (3) to (5).
(7) An order in respect of a building society may—
(a) make provision expressly or impliedly disapplying or modifying the memorandum or rules of the building society;
(b) disapply or modify an enactment about, or in its application to, building societies.
(8) The following sections apply to orders under this section as to share transfer orders: sections 17, 18, 20, 21, 22, 23, 25, 71, 72 and 73.
(1) The Treasury may by order make provision about the distribution of surplus assets of a building society which—
(a) is the subject of a property transfer instrument or order, and
(b) is later wound up or dissolved by consent.
(2) An order under section 85 may include provision about the distribution of surplus assets of the building society if it is later wound up or dissolved by consent.
(3) “Surplus” means remaining after the satisfaction of liabilities to creditors and shareholders.
(4) An order under or by virtue of this section—
(a) may include any provision of a kind that may be made by order under section 90B of the Building Societies Act 1986 (power to alter priorities on dissolution or winding up),
(b) may be made whether or not the power under that section has been exercised, and
(c) shall be treated for all procedural purposes in the same way as an order under that section.
(1) Expressions used in this group of sections and in the Building Societies Act 1986 have the same meaning in this group of sections as in that Act.
(2) An order under section 119(1) of that Act defining “deferred shares”—
(a) may make special provision for the meaning of that expression in the application of this group of sections, and
(b) shall otherwise apply to this group of sections as to that Act.
(1) The Treasury may by order make provision, in addition to the provisions of this group of sections, in consequence of the application of this Part to building societies.
(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.
(1) The Treasury may by order provide for the application of this Part to credit unions (within the meaning of section 31 of the Credit Unions Act 1979) subject to modifications set out in the order.
(2) An order may disapply, modify or apply (with or without modifications) any enactment which relates, or in so far as it relates, 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.
(5) In the application of this section to Northern Ireland the 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 1985.
Banking Act 2009