The Financial Services and Markets Act 2000 (Contribution to Costs of Special Resolution Regime) Regulations 2010

Regulations 7, 8, 9, 11 and 12.

SCHEDULE 1

PART 1

Calculation of the net cost of the resolution

1.  The Treasury shall keep accounts of eligible expenses incurred (“the expenses account”) and of recoveries made (“the recoveries account”) by itself or by the other person in respect of the banking institution.

2.  The accounts shall be dated from the time when the Treasury or the other person first incurred eligible expenses or made recoveries, whichever is the sooner.

3.  The Treasury shall add eligible expenses and recoveries to the appropriate accounts on the dates on which they are incurred or made.

4.  Interest at the notified rate shall accrue daily on the amount in each account and shall be added to the account on each anniversary of the relevant time, but where the final notification is made on a date falling after an anniversary date, then all accrued interest not yet added shall be added to the account on the date of the final notification.

5.  When the Treasury are satisfied that all recoveries have been made in respect of the banking institution, or considers that any remaining recoveries are sufficiently foreseeable so as to be included in the recoveries account on the date of the final notification, it shall calculate the net cost of resolution.

6.  The net cost of resolution is the total amount in the expenses account less the total amount in the recoveries account on the date of the final notification, but if the total amount in the recoveries account equals or exceeds the total amount in the expenses account, the net cost of resolution is zero.

PART 2

Calculation of the scheme manager’s limit

7.  The Treasury shall create accounts of—

(a) notional net expenditure (“the notional account”), and

(b) actual net expenditure (“the actual account”),

of the scheme manager in respect of the banking institution.

8.  The Treasury shall date the accounts as from the time when the scheme manager would have first, or has for the first time, incurred expenses or made recoveries.

9.  At the time when—

(a) the scheme manager would have incurred expenses (as determined by the scheme manager under section 214D(2) of the Act), those amounts shall be added to the notional account;

(b) the valuer determined that the scheme would have made recoveries under section 214D(3), those amounts shall be subtracted from the notional account.

10.  At the time when the scheme manager—

(a) incurred actual expenditure in respect of the banking institution, those amounts shall be added to the actual account;

(b) made recoveries in respect of the actual expenditure, those amounts shall be subtracted from the actual account.

11.  In the notional account, the Treasury shall account for interest at the notified rate on the outstanding balance as if it had accrued daily and had been added to the account on each anniversary of the relevant time.

12.  In the actual account, interest at the notified rate shall accrue daily on the outstanding balance and shall be added to the account on each anniversary of the relevant time.

13.  In paragraphs 11 and 12, where the final notification is made on a date falling after an anniversary date, then all accrued interest not yet added shall be added to the account on the date of the final notification.

14.  The scheme manager’s limit is the outstanding balance in the notional account less the outstanding balance in the actual account on the date of the final notification.

PART 3

Calculation of the total cost of interim payments

15.  The Treasury shall keep an account of any interim payments made by the scheme manager under regulation 9.

16.  The account shall be dated from the time when the Treasury or the other person first received an interim payment.

17.  The Treasury shall add the interim payments to the account on the date on which they are received.

18.  Interest at the notified rate shall accrue daily on the amount in the account and shall be added to the account on each anniversary of the relevant time, but where the final notification is made on a date falling after an anniversary date, then all accrued interest not yet added shall be added to the account on the date of the final notification.

19.  The total cost of interim payments is the total amount in the account on the date of the final notification.

PART 4

Calculation of balancing payments

20.  A balancing payment is due—

(a) from the scheme manager if both the net cost of resolution and the scheme manager’s limit exceed the total cost of interim payments; or

(b) from the Treasury to the scheme manager if either the net cost of resolution or the scheme manager’s limit (or both) are lower than the total cost of interim payments.

21.  If paragraph 20(a) applies, then the amount of the balancing payment shall be the lower of the net cost of resolution and the scheme manager’s limit, minus the total cost of interim payments.

22.  If paragraph 20(b) applies then the amount of the balancing payment shall be the total cost of interim payments minus the lower of the net cost of resolution and the scheme manager’s limit.

Regulation 13

SCHEDULE 2

PART 1

The valuer

1.  The valuer is to hold and vacate office in accordance with the terms of his or her appointment.

2.  The Treasury may remove the valuer only on the ground of incapacity or serious misbehaviour.

3.  In the event of the death of the valuer, or if the valuer is removed from office or resigns, the Treasury (or a panel appointed by the Treasury) shall appoint a new valuer as soon as possible.

4.  The valuer shall be—

(a) paid such remuneration, and

(b) reimbursed such expenses,

as the Treasury may determine.

5.  The Treasury may appoint a person to verify the remuneration and expenses of the valuer.

6.  The valuer may appoint staff.

7.  The valuer shall determine the remuneration and other conditions of service of persons appointed under paragraph 6.

8.  Any determination under paragraph 7 shall require the approval of the Treasury.

9.  Valuers (and their staff) are neither servants nor agents of the Crown (and in particular are not civil servants).

10.  Records of a valuer in relation to his or her functions in connection with an appointment under these Regulations are public records for the purposes of the Public Records Act 1958(1).

PART 2

Application to the court for information

11.—(1) The court may, on an application by the valuer, make an order requiring a person to provide information that is reasonably required for the purpose of making the determinations in section 214D(3).

(2) A person required to provide information pursuant to an order under sub-paragraph (1) shall not be required to provide information—

(a) in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings;

(b) if such provision by the person holding it would be prohibited by or under any enactment; or

(c) if it is held by a government department and provision of such information would be contrary to the public interest.

(3) In relation to information recorded otherwise than in legible form, the power to require it to be provided includes power to require it to be provided in a form from which it can be readily produced in visible and legible form.

12.  A person who provides information to the valuer for the purpose set out in paragraph 11(1) is not, by reason only of the provision of such information, liable in any proceedings relating to a breach of confidence.

13.  Specified information shall not be disclosed by the valuer (or any person to whom the valuer has disclosed such information in accordance with paragraph 14(2)) without the consent of the person from whom the valuer obtained the specified information and, if different, the person to whom it relates.

14.—(1) The prohibition in paragraph 13 of the disclosure of specified information is subject to the following exceptions.

(2) The valuer may, for the purpose of making the determinations under section 214D(3), disclose specified information to any staff appointed by the valuer or to any person providing advice or assistance to the valuer.

(3) The valuer may disclose specified information if and to the extent that the valuer considers it necessary to do so for the purposes of exercising the functions of the office.

(4) The valuer must, before disclosing any specified information in accordance with sub-paragraph (3), have regard to the need to exclude from disclosure (so far as practicable)—

(a) commercial information the disclosure of which might significantly harm the legitimate business interests of the person to whom it relates;

(b) information relating to the private affairs of an individual, the disclosure of which might significantly harm the individual’s interests; or

(c) any information the disclosure of which would be contrary to the public interest.

(5) The valuer may disclose specified information in accordance with this paragraph subject to such conditions as the valuer thinks appropriate.

15.  In this Part, “specified information” means any information obtained by the valuer for the purpose of making determinations under section 214D(3) of the Act.

Regulation 16

SCHEDULE 3

Proceedings before Tribunal: general provision

1.  This Schedule applies in the case of a reference to the Tribunal under regulation 14(5) or 15 in respect of—

(a) a reconsidered determination of the valuer under regulation 14;

(b) a determination of the scheme manager under section 214D(2); or

(c) a calculation made by the Treasury in connection with its functions under these Regulations.

2.  This Schedule also applies in the case of a reference to the Tribunal under regulation 15 in respect of a dispute relating to the making of payments under these Regulations.

3.  On receiving a reference described in paragraph 1—

(a) Tribunal Procedure Rules may make provision for the suspension of the determination or calculation to which the reference refers from taking effect;

(b) the Tribunal may consider any evidence relating to the subject matter of the reference, whether or not it was available to the person making the determination or the calculation at the material time.

4.  On receiving a reference described in paragraph 1 or 2, the Tribunal must determine what (if any) is the appropriate action—

(a) in the case of a reference described in paragraph 1, for the person making the determination or calculation to take in relation to the matter referred to it (and that person must act in accordance with the determination of, and any direction given by, the Tribunal;) or

(b) in the case of a reference described in paragraph 2, to be taken to resolve the dispute, which may include an award of damages.

5.  An award of damages under paragraph 4(b) may only be made if the Tribunal is satisfied that an award would have been made by a county court or, in Scotland, the Court of Session, if the claim had been made in an action begun in that court.

(1)

1958 c.51.