Banking Act 2009

67 Special continuity obligations: share transfers U.K.

(1) Expressions in this section have the same meaning as in section 66.

(2) The continuity authority may—

(a) cancel a contract or other arrangement between the transferred bank and [F1 a third party];

(b) modify the terms of a contract or other arrangement between the transferred bank and [F2 a third party];

(c) confer and impose rights and obligations on a former group company and the transferred bank, which shall have effect as if created by contract between them.

(3) In modifying or setting terms under subsection (2) the continuity authority shall aim, so far as is reasonably practicable, to preserve or include—

(a) provision for reasonable consideration, and

(b) any other provision that would be expected in arrangements concluded between parties dealing at arm's length.

[F3 (4) The power under subsection (2) must be exercised by way of provision in a share transfer instrument or order or resolution instrument (or supplemental instrument or order).

(5) The power in subsection (2)(c) may be exercised—

(a) only in so far as the continuity authority thinks it necessary to do so to ensure the provision of such services and facilities as are required to enable the transferred bank to operate effectively, and

(b) by the Bank of England only with the consent of the Treasury.

(6) An obligation imposed on the transferred bank or a former group company under subsection (2)(b) or (c) continues to apply despite the transferred bank or former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.]

Textual Amendments

F1 Words in s. 67(2)(a) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 75(2)

F2 Words in s. 67(2)(b) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 75(2)

F3 S. 67(4)-(6) substituted for s. 67(4) (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 75(3)

Commencement Information

I1 S. 67 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 1

I2 S. 67 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 1