Banking (Special Provisions) Bill

House of Lords

Session 2007 - 08
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Other Bills before Parliament

Banking (Special Provisions) Bill

Banking (Special Provisions) Bill
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(c)
any securities issued by the company.
(5)
The following provisions apply in relation to an order under subsection (2) or
(4) with any necessary modifications—
(a)
sections 3(2) to (4) and 4, together with Schedule 1, so apply in relation
to an order making provision for or in connection with, or in
5
consequence of, the transfer of any securities;
(b)
section 6(2) to (5), together with Schedule 2, so apply in relation to an
order making provision for or in connection with, or in consequence of,
the transfer of any property, rights or liabilities.
(6)
The Treasury may by order make provision, in relation to any description of
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order under subsection (2) or (4), for determining the amount of any
consideration payable by the transferee in respect of any securities, or any
property, rights and liabilities, transferred by or under any such order under
that subsection.
(7)
A person to whom anything is transferred by or under an order under section
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3 or 6 is not to be regarded as precluded by subsection (2) or (4) from making
any contractual or other disposition of, or relating to, anything falling within
those subsections.
Supplementary
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Supplementary provision about compensation schemes etc.
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(1)
An order under section 5, 7 or 8(6) may in particular make provision—
(a)
for the manner in which any compensation or consideration is to be
assessed, including provision as to methods of calculation, valuation
dates and matters to be taken into, or left out of, account in making
valuations;
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(b)
for the assessment to be made by an independent valuer appointed by
the Treasury;
(c)
as to the procedure in relation to the assessment of any compensation
or consideration, including provision enabling any such valuer to make
rules as to that procedure;
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(d)
for decisions relating to the assessment of any compensation or
consideration to be reconsidered by the person who made those
decisions (including any such provision as to procedure as is
mentioned in paragraph (c));
(e)
for enabling persons to apply for decisions relating to the assessment of
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any compensation or consideration to be reviewed by the Financial
Services and Markets Tribunal or a tribunal appointed by the Treasury
for the purposes of the order;
(f)
as to the powers of a relevant tribunal (that is to say, the Financial
Services and Markets Tribunal or a tribunal appointed by the Treasury
40
for the purposes of the order);
(g)
as to the procedure for applying for any review to a relevant tribunal,
including provision enabling the tribunal to make rules as to that
procedure;
(h)
as to remuneration and expenses of any independent valuer, or of any
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tribunal, appointed by the Treasury for the purposes of the order;

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(i)
as to the appointment of any staff of any such valuer (including
provision as to their terms and conditions of employment and as to
their pensions, allowances or gratuities).
(2)
The provision that may be made by virtue of subsection (1)(a) includes the
making of assumptions as to any matter, including in particular the making of
5
one or more of the following assumptions about the authorised UK deposit-
taker in question—
(a)
that it is unable to continue as a going concern;
(b)
that it is in administration;
(c)
that it is being wound up.
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(3)
Subsection (1)(a) is subject to sections 5(4) and 7(3), but those subsections do
not—
(a)
prevent the inclusion of provision requiring the making of the
assumptions mentioned in those subsections in any case where they are
not required to be made by either of those subsections; or
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(b)
otherwise restrict the provision that may be made by virtue of
subsection (1)(a).
(4)
In subsection (1)(a) the reference to valuation dates includes—
(a)
valuation dates falling before the day on which this Act is passed; and
(b)
valuation dates falling before the day on which the relevant event takes
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place.
(5)
In subsection (1)(e)—
(a)
the reference to persons includes the Treasury; and
(b)
the reference to decisions relating to the assessment of any
compensation or consideration includes decisions following any such
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reconsideration as is mentioned in subsection (1)(d).
(6)
The provision that may be made by virtue of subsection (1)(f)—
(a)
includes provision enabling a relevant tribunal, where satisfied that the
decision in question was not a reasonable decision, to send the matter
back to the person who made the decision for reconsideration in
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accordance with such directions (if any) as it considers appropriate; but
(b)
does not include provision enabling a relevant tribunal to substitute its
own decision for that of the person who made the decision.
(7)
The power of any valuer or tribunal to make provision as to procedure by
virtue of subsection (1)(c), (d) or (g) includes power to make different provision
35
for different cases or circumstances.
(8)
In this section “the relevant event” means the transfer or (as the case may be)
extinguishment of rights made by or under the order to which the order
mentioned in subsection (1) relates.
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Tax consequences
40
(1)
The Treasury may by regulations make provision for or in connection with
varying the way in which any relevant tax would, apart from the regulations,
have effect in relation to, or in connection with, any of the following—
(a)
anything done for the purpose of, in relation to, or by or under or in
consequence of, a relevant order;
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(b)
any securities, or any property, rights or liabilities, which are
transferred, extinguished or otherwise affected by any provision made
by or under a relevant order;
(c)
any securities issued by, or any property, rights or liabilities of, any
transferee which have not been transferred by or under a relevant
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order;
(d)
any securities issued by, or any property, rights or liabilities of, any
relevant institution which have not been so transferred.
(2)
The provision that may be made by the regulations includes provision for or in
connection with any of the following—
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(a)
a tax provision not to apply, or to apply with modifications, in
prescribed cases or circumstances;
(b)
anything done to have or not to have a specified consequence for the
purposes of a tax provision in prescribed cases or circumstances;
(c)
any securities, or any property, rights or liabilities, to be treated in a
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specified way for the purposes of a tax provision in prescribed cases or
circumstances (whether or not affected by any provision made by or
under a relevant order);
(d)
the withdrawal of relief (whether or not granted by virtue of the
regulations), and the charging of any relevant tax, in prescribed cases
20
or circumstances;
(e)
requiring or enabling the Treasury to determine or to specify the
method to be used for determining anything (including amounts or
values, or times or periods of time) which needs to be determined for
the purposes of any tax provision (whether or not modified by the
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regulations) as it applies in relation to, or in connection with, any of the
matters mentioned in subsection (1)(a) to (d).
(3)
In this section—
“prescribed” means prescribed by or determined in accordance with
regulations under this section;
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“relevant institution” means any body in relation to which a relevant
order is made;
“relevant order” means an order under section 3, 4, 6 or 8;
“relevant tax” means corporation tax, income tax, capital gains tax, stamp
duty, stamp duty reserve tax and stamp duty land tax;
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“tax provision” means any enactment relating to any relevant tax;
“transferee” means any person to whom any securities, or any property,
rights or liabilities, are transferred by or under a relevant order.
Building societies
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Modification of legislation applying in relation to building societies
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(1)
The Treasury may by order make such modifications of any enactment as they
consider appropriate for or in connection with facilitating the provision of
relevant financial assistance by the Bank of England to building societies.
(2)
In this section “relevant financial assistance” means any financial assistance
provided for the purpose of maintaining the stability of the financial system in
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the United Kingdom.

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(3)
An order under this section may in particular make provision for or in
connection with modifying the operation of any of the following—
(a)
sections 5, 6 and 7 of, and Schedule 2 to, the Building Societies Act 1986
(c. 53) (establishment, constitution and powers, the lending limit and
the funding limit);
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(b)
any other provision of that Act which might otherwise prevent any
relevant financial assistance from being provided by the Bank of
England to building societies or affect the amount of any such
assistance;
(c)
sections 8, 9A and 9B of the Building Societies Act 1986 (restrictions on
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raising funds and borrowing, on transactions involving derivative
instruments etc. and on creation of floating charges);
(d)
any other provision of that Act which might otherwise prevent
building societies from entering into any transaction in connection with
the provision of financial assistance by the Bank of England to building
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societies.
(4)
An order under this section may in particular—
(a)
disapply (to such extent as is specified) any specified statutory
provision;
(b)
provide for any specified statutory provision that would not otherwise
20
apply in relation to building societies to apply in relation to them with
specified modifications.
(5)
In this section “building society” means a building society incorporated (or
deemed to be incorporated) under the Building Societies Act 1986.
General
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Consequential and supplementary provision
(1)
The Treasury may by order make—
(a)
such supplementary, incidental or consequential provision, or
(b)
such transitory, transitional or saving provision,

as they consider appropriate for the general purposes, or any particular
30
purposes, of this Act or in consequence of any provision made by or under this
Act, or for giving full effect to this Act or any such provision.
(2)
An order under this section may in particular—
(a)
disapply (to such extent as is specified) any specified statutory
provision or rule of law;
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(b)
provide for any specified statutory provision to apply (whether or not
it would otherwise apply) with specified modifications;
(c)
make provision for or in connection with any of the matters mentioned
in subsection (3).
(3)
Those matters are—
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(a)
imposing a moratorium on the commencement or continuation of
proceedings or other legal processes of any specified description in
relation to any body or property of any such description;
(b)
providing exceptions from any provision made in pursuance of
paragraph (a), whether framed by reference to—
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(i)
the leave of the court or the consent of the Treasury or the Bank
of England, or
(ii)
instruments or transactions of specified descriptions,

or otherwise;
(c)
the dissolution of any relevant deposit-taker or of any UK undertaking
5
which is a subsidiary undertaking of any relevant deposit-taker;
(d)
exempting directors of any relevant deposit-taker, or of any group
undertaking of any relevant deposit-taker, from liability in connection
with acts or omissions in relation to the deposit-taker or undertaking;
(e)
the payment of any compensation by the Treasury to persons affected
10
by an order under this section.
(4)
An order under this section may, in connection with the payment of any such
compensation, make provision for any matter for which provision is or may be
made by or under section 5, 7 or 9.
(5)
In this section “relevant deposit-taker” means any authorised UK deposit-taker
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in relation to which an order is being, or has been, made under section 3 or 6.
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Orders and regulations: general
(1)
Orders and regulations under this Act are to be made by statutory instrument.
(2)
Such orders and regulations—
(a)
may make different provision for different cases or circumstances;
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(b)
may make such supplementary, incidental, consequential, transitory,
transitional or saving provision as the Treasury consider appropriate.
(3)
A statutory instrument containing an order under this Act is subject to
annulment in pursuance of a resolution of either House of Parliament.
(4)
A statutory instrument containing regulations under section 10 is subject to
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annulment in pursuance of a resolution of the House of Commons.
(5)
Nothing in any provision of this Act that authorises the making of any order or
regulations, or the making of any particular kind of provision by any order or
regulations, affects the generality of any other such provision of this Act.
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Orders and regulations: retrospective provisions
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(1)
Subsections (2) and (3) apply to any order made under section 3, 4, 6 or 12 (a
“relevant order”).
(2)
A relevant order may—
(a)
provide for any provision made by the order to have retrospective
effect as from any appropriate time or any specified later time;
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(b)
make provision for or in connection with, or in consequence of,
nullifying the effect of transactions or events taking place after the time
in question.
(3)
“Appropriate time”, in relation to a relevant order, means —
(a)
the specified time on the date of a statement published by the Treasury
40
of their intention to make an order that would have the same general
effect as the relevant order;
(b)
the specified time on the date on which any transfer was effected by or
under a previous relevant order.

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(4)
It is immaterial whether the statement mentioned in subsection (3)(a) is
published before or after the passing of this Act.
(5)
Regulations under section 10 may provide for any of their provisions to have
retrospective effect as from any time which is not earlier than 3 months before
the day on which this Act is passed.
5
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Interpretation
(1)
In this Act—
“authorised UK deposit-taker” has the meaning given by section 1;
“body corporate” includes a body incorporated outside the United
Kingdom, but does not include the Bank of England;
10
“company” means a company within the meaning of section 1 of the
Companies Act 2006 (c. 46);
“director”, in relation to a body corporate whose affairs are managed by
its members, means a member of the body corporate;
“enactment” includes—
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(a)
an enactment comprised in subordinate legislation within the
meaning of the Interpretation Act 1978 (c. 30),
(b)
an enactment contained in, or in an instrument made under, an
Act of the Scottish Parliament, and
(c)
an enactment contained in, or in an instrument made under,
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Northern Ireland legislation within the meaning of the
Interpretation Act 1978;
“financial assistance”, in relation to any person, includes—
(a)
assistance provided by way of loan, guarantee or indemnity,
(b)
assistance provided by way of any transaction which equates, in
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substance, to a transaction for lending money at interest (such
as a transaction involving the sale and repurchase of securities
or other assets), and
(c)
assistance falling within paragraph (a) or (b) provided
indirectly to or otherwise for the benefit of the person
30
(including the provision of assistance within paragraph (a) or
(b) to any group undertaking of that person),
whether provided in pursuance of an agreement or otherwise and
whether provided before or after the passing of this Act;
“FSMA 2000” means the Financial Services and Markets Act 2000 (c. 8);
35
“group undertaking” has the meaning given by section 1161 of the
Companies Act 2006;
“indemnity” includes any undertaking or other arrangement entered into
for the purpose of indemnifying any person or for any similar purpose;
“liabilities” includes obligations;
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“modifications” includes omissions, additions and alterations, and
“modify” has a corresponding meaning;
“pension scheme” means a scheme or other arrangements for the
provision of benefits to or in respect of people—
(a)
on retirement,
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(b)
on death,
(c)
on having reached a particular age,
(d)
on the onset of any serious ill-health or incapacity, or

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(e)
in similar circumstances;
“relevant guarantee arrangements”, in relation to any authorised UK
deposit-taker, has the meaning given by section 2(6);
“securities” includes—
(a)
shares and stock,
5
(b)
debentures, including debenture stock, loan stock, bonds,
certificates of deposit and other instruments creating or
acknowledging indebtedness, and
(c)
warrants or other instruments entitling the holder to subscribe
for, or otherwise acquire, securities falling within paragraph (a)
10
or (b),
and see also subsection (2);
“specified”, in relation to any order or regulations under this Act, means
specified in the order or regulations;
“statutory provision” means any provision made by or under an
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enactment (whenever passed or made);
“subsidiary undertaking” has the meaning given by section 1162 of the
Companies Act 2006 (c. 46);
“UK undertaking” means an undertaking which is incorporated in, or
formed under the law of any part of, the United Kingdom;
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“undertaking” has the meaning given by section 1161 of the Companies
Act 2006 (except in the definition of “indemnity”);
“wholly owned”, in relation to the Bank of England or the Treasury, is to
be construed in accordance with subsection (6);
“wholly-owned subsidiary” has the meaning given by section 1159 of the
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Companies Act 2006.
(2)
In this Act any reference (however expressed) to securities issued by any
authorised UK deposit-taker includes a reference to rights granted by the
deposit-taker which form part of its own funds for the purposes of Section 1 of
Chapter 2 of Title V of the Banking Consolidation Directive (and which would
30
not otherwise be securities by virtue of subsection (1)).
(3)
In subsection (2) “the Banking Consolidation Directive” means Directive 2006/
48/EC of the European Parliament and of the Council of 14 June 2006 relating
to the taking up and pursuit of the business of credit institutions (recast).
(4)
For the purposes of this Act any undertaking that was an authorised UK
35
deposit-taker immediately before the making of the first order under section 3
or 6 in relation to the undertaking is to be regarded as continuing to be an
authorised UK deposit-taker, whether or not it would be one apart from this
subsection.
(5)
For the purposes of this Act any reference (however expressed) to an
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undertaking which is—
(a)
a group undertaking of an authorised UK deposit-taker, or
(b)
a subsidiary undertaking of an authorised UK deposit-taker,

includes, in relation to any time after the making of the first order under section
3 or 6 in relation to the deposit-taker (“the relevant time”), a reference to an
45
undertaking which was a group or subsidiary undertaking of the deposit-taker
immediately before the making of that order but is not one at the relevant time.
(6)
For the purposes of this Act—