Banking Act 2009

Part 3 U.K. Bank Administration

Modifications etc. (not altering text)

C1 Pt. 3 modified (21.2.2009) by Banking Act 2009 (Bank Administration) (Modification for Application to Multiple Transfers) Regulations 2009 (S.I. 2009/313), regs. 1(1), 2, 3, Sch. 1

C2 Pt. 3 modified (21.2.2009) by The Banking Act 2009 (Bank Administration) (Modification for Application to Banks in Temporary Public Ownership) Regulations 2009 (S.I. 2009/312), regs. 1(1), 2-4, Sch.

C3 Pt. 3 modified (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), Sch. 1 Pt. 3

C4 Pt. 3 modified (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), Sch. 1 Pt. 1

C5 Pt. 3 applied (with modifications) by Building Societies Act 1986 (c. 53), s. 90C (as inserted (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), art. 2)

Introduction U.K.

136 Overview U.K.

(1) This Part provides for a procedure to be known as bank administration.

(2) The main features of bank administration are that—

(a) it is used where part of the business of a bank is sold to a commercial purchaser in accordance with section 11 or transferred to a bridge bank in accordance with section 12 (and it can also be used in certain cases of multiple transfers under Part 1),

(b) the court appoints a bank administrator on the application of the Bank of England,

(c) the bank administrator is able and required to ensure that the non-sold or non-transferred part of the bank (“the residual bank”) provides services or facilities required to enable the commercial purchaser (“the private sector purchaser”) or the transferee (“the bridge bank”) to operate effectively, and

(d) in other respects the process is the same as for normal administration under the Insolvency Act 1986, subject to specified modifications.

(3) The Table describes the provisions of this Part.

Sections	Topic
Sections 136 to 140	Introduction
Sections 141 to 148	Process
Sections 149 to 152	Multiple transfers
Sections 153 and 154	Termination
Sections 155 to 168	Miscellaneous

Commencement Information

I1 S. 136 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

137 Objectives U.K.

(1) A bank administrator has two objectives—

(a) Objective 1: support for commercial purchaser or bridge bank (see section 138), and

(b) Objective 2: “normal” administration (see section 140).

(2) Objective 1 takes priority over Objective 2 (but a bank administrator is obliged to begin working towards both objectives immediately upon appointment).

Commencement Information

I2 S. 137 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

138 Objective 1: supporting private sector purchaser or bridge bank U.K.

(1) Objective 1 is to ensure the supply to the private sector purchaser or bridge bank of such services and facilities as are required to enable it, in the opinion of the Bank of England, to operate effectively.

(2) For the purposes of Objective 1—

(a) the reference to services and facilities includes a reference to acting as transferor or transferee under a supplemental or reverse property transfer instrument, and

(b) the reference to “supply” includes a reference to supply by persons other than the residual bank.

(3) In the case of bank administration following a private sector purchase the bank administrator must co-operate with any request of the Bank of England to enter into an agreement for the residual bank to provide services or facilities to the private sector purchaser; and—

(a) in pursuing Objective 1 the bank administrator must have regard to the terms of that or any other agreement entered into between the residual bank and the private sector purchaser,

(b) in particular, the bank administrator must avoid action that is likely to prejudice performance by the residual bank of its obligations in accordance with those terms,

(c) if in doubt about the effect of those terms the bank administrator may apply to the court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (applied by section 145 below), and

(d) the private sector purchaser may refer to the court a dispute about any agreement with the residual bank, by applying for directions under paragraph 63 of Schedule B1.

(4) In the case of bank administration following transfer to a bridge bank, the bank administrator must co-operate with any request of the Bank of England to enter into an agreement for the residual bank to provide services or facilities to the bridge bank; and—

(a) the bank administrator must avoid action that is likely to prejudice performance by the residual bank of its obligations in accordance with an agreement,

(b) the bank administrator must ensure that so far as is reasonably practicable an agreement entered into includes provision for consideration at market rate,

(c) paragraph (b) does not prevent the bank administrator from entering into an agreement on any terms that the bank administrator thinks necessary in pursuit of Objective 1, and

(d) this subsection does not apply after Objective 1 ceases.

(5) Where a bank administrator requires the Bank of England's consent or approval to any action in accordance with this Part, the Bank may withhold consent or approval only on the grounds that the action might prejudice the achievement of Objective 1.

Commencement Information

I3 S. 138 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

139 Objective 1: duration U.K.

(1) Objective 1 ceases if the Bank of England notifies the bank administrator that the residual bank is no longer required in connection with the private sector purchaser or bridge bank.

(2) A bank administrator who thinks that Objective 1 is no longer required may apply to the court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (applied by section 145 below); and the court may direct the Bank of England to consider whether to give notice under subsection (1) above.

(3) If immediately upon the making of a bank administration order the Bank of England thinks that the residual bank is not required in connection with the private sector purchaser or bridge bank, the Bank of England may give a notice under subsection (1).

(4) A notice under subsection (1) is referred to in this Part as an “Objective 1 Achievement Notice”.

Commencement Information

I4 S. 139 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

140 Objective 2: “normal” administration U.K.

(1) Objective 2 is to—

(a) rescue the residual bank as a going concern (“Objective 2(a)”), or

(b) achieve a better result for the residual bank's creditors as a whole than would be likely if the residual bank were wound up without first being in bank administration (“Objective 2(b)”).

(2) In pursuing Objective 2 a bank administrator must aim to achieve Objective 2(a) unless of the opinion either—

(a) that it is not reasonably practicable to achieve it, or

(b) that Objective 2(b) would achieve a better result for the residual bank's creditors as a whole.

(3) In pursuing Objective 2(b) in bank administration following transfer to a bridge bank, the bank administrator may not realise any asset unless—

(a) the asset is on a list of realisable assets agreed between the bank administrator and the Bank of England, or

(b) the Bank of England has given an Objective 1 Achievement Notice.

Commencement Information

I5 S. 140 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

Process U.K.

141 Bank administration order U.K.

(1) A bank administration order is an order appointing a person as the bank administrator of a bank.

(2) A person is eligible for appointment as a bank administrator if qualified to act as an insolvency practitioner.

(3) An appointment may be made only if the person has consented to act.

(4) A bank administration order takes effect in accordance with its terms; and—

(a) the process of a bank administration order having effect may be described as “bank administration” in relation to the bank, and

(b) while the order has effect the bank may be described as being “in bank administration”.

Commencement Information

I6 S. 141 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

142 Application U.K.

(1) An application for a bank administration order may be made to the court by the Bank of England.

(2) An application must nominate a person to be appointed as the bank administrator.

(3) The bank must be given notice of an application, in accordance with rules under section 411 of the Insolvency Act 1986 (as applied by section 160 below).

Commencement Information

I7 S. 142 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

143 Grounds for applying U.K.

(1) The Bank of England may apply for a bank administration order in respect of a bank if the following conditions are met.

(2) Condition 1 is that the Bank of England has made or intends to make a property transfer instrument in respect of the bank in accordance with section 11(2) or 12(2).

(3) Condition 2 is that the Bank of England is satisfied that the residual bank—

(a) is unable to pay its debts, or

(b) is likely to become unable to pay its debts as a result of the property transfer instrument which the Bank intends to make.

Commencement Information

I8 S. 143 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

144 Grounds for making U.K.

(1) The court may make a bank administration order if satisfied that the conditions in section 143 were met.

(2) On an application for a bank administration order the court may—

(a) grant the application,

(b) adjourn the application (generally or to a specified date), or

(c) dismiss the application.

Commencement Information

I9 S. 144 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

145 General powers, duties and effect U.K.

(1) A bank administrator may do anything necessary or expedient for the pursuit of the Objectives in section 137.

(2) The following provisions of this section provide for—

(a) general powers and duties of bank administrators (by application of provisions about administrators), and

(b) the general process and effects of bank administration (by application of provisions about administration).

(3) The provisions set out in the Tables apply in relation to bank administration as in relation to administration, with—

(a) the modifications set out in subsection (4),

(b) any other modification specified in the Tables, and

(c) any other necessary modification.

(4) The modifications are that—

(a) a reference to the administrator is a reference to the bank administrator,

(b) a reference to administration is a reference to bank administration,

(c) a reference to an administration order is a reference to a bank administration order,

(d) a reference to a company is a reference to the bank,

(e) a reference to the purpose of administration is a reference to the Objectives in section 137, and

(f) in relation to provisions of the Insolvency Act 1986 other than Schedule B1, the modifications in section 103 above apply (but converting references into references to bank administration or administrators rather than to bank insolvency or liquidators).

(5) Powers conferred by this Act, by the Insolvency Act 1986 (as applied) and the Companies Acts are in addition to, and not in restriction of, any existing powers of instituting proceedings against a contributory or debtor of a bank, or the estate of any contributory or debtor, for the recovery of any call or other sum.

(6) A reference in an enactment or other document to anything done under a provision applied by this Part includes a reference to the provision as applied.

TABLE 1 OF APPLIED PROVISIONS

SCHEDULE B1 TO THE INSOLVENCY ACT 1986

Provision of Schedule B1	Subject	Modification or comment
Para. 40(1)(a)	Dismissal of pending winding-up petition
Para. 41	Dismissal of administrative or other receiver
Para. 42	Moratorium on insolvency proceedings	Ignore sub-paras. (4) and (5).
Para. 43	Moratorium on other legal process	(a) In the case of bank administration following transfer to a bridge bank, unless the Bank of England has given an Objective 1 Achievement Notice consent of the bank administrator may not be given for the purposes of para. 43 without the approval of the Bank of England. (b) In the case of bank administration following transfer to a bridge bank, unless the Bank of England has given an Objective 1 Achievement Notice, in considering whether to give permission under sub-para. (6) to a winding-up the court must have regard to the Objectives in section 137. (c) In considering whether to give permission for the purposes of para. 43 the court must have regard to the Objectives in section 137.
Para. 44(1)(a) and (5)	Interim moratorium
Para. 46	Announcement of appointment	Ignore sub-para. (6)(b) and (c).
Paras. 47 & 48	Statement of affairs
Para. 49	Administrator's proposals	(a) Para. 49 does not apply unless the Bank of England has given an Objective 1 Achievement Notice; for bank administrator's proposals before the Bank of England has given an Objective 1 Achievement Notice, see section 147. (b) Treat the reference in sub-para. (1) to the purpose of administration as a reference to Objective 2. (c) Before making proposals under sub-para. (1) in the case of bank administration following transfer to a bridge bank, the bank administrator must consult the Bank of England about the chances of a payment to the residual bank from a scheme established by resolution fund order under section 49(3). (d) Treat the reference in sub-para. (2)(b) to the objective mentioned in para. 3(1)(a) or (b) as a reference to Objective 2(a). (e) Ignore sub-para.(3)(b). (f) Treat references in sub-para. (5) to the company's entering administration as references to satisfaction of the condition in para. (a) above.
Paras. 50–58	Creditors' meeting	(a) Treat references in para. 51(2) to the company's entering administration as references to the giving of an Objective 1 Achievement Notice. (b) The bank administrator may comply with a request under para. 56(1)(a) only if satisfied that it will not prejudice pursuit of Objective 1 in section 137. (c) A creditors' meeting may not establish a creditors' committee in reliance on para. 57 until the Bank of England has given an Objective 1 Achievement Notice. (d) Until that time the Bank of England shall have the functions of the creditors' committee.
Para. 59	General powers	A bank administrator may not rely on para. 59 (or subsection (1) above) for the purpose of recovering property transferred by property transfer instrument.
Para. 60 and Schedule 1	General powers	(a) The exercise of powers under Schedule 1 is subject to section 137(2). (b) In the case of bank administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice powers under the following paragraphs of Schedule 1 may be exercised only with the Bank of England's consent: 2, 3, 11, 14, 15, 16, 17, 18 and 21.
Para. 61	Directors
Para. 62	Power to call meetings of creditors
Para. 63	Application to court for directions	(a) Before the Bank of England has given an Objective 1 Achievement Notice, the bank administrator may apply for directions if unsure whether a proposed action would prejudice the pursuit of Objective 1; and before making an application in reliance on this paragraph the bank administrator must give notice to the Bank of England, which shall be entitled to participate in the proceedings. (b) In making directions the court must have regard to the Objectives in section 137.
Para. 64.	Management powers.
Para. 65	Distribution to creditors	(a) In the case of bank administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice a bank administrator may make a distribution only with the Bank of England's consent. (b) Ignore sub para. (3).
Para. 66	Payments
Para. 67	Taking custody of property
Para. 68	Management	Before the approval of proposals under para. 53 a bank administrator shall manage the bank's affairs, business and property in accordance with principles agreed between the bank administrator and the Bank of England.
Para. 69	Agency
Para. 70	Floating charges	The bank administrator may take action only if satisfied that it will not prejudice pursuit of Objective 1 in section 137.
Para. 71	Fixed charges	The court may make an order only if satisfied that it will not prejudice pursuit of Objective 1 in section 137.
Para. 72	Hire-purchase property	In the case of administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice an application may be made only with the Bank of England's consent.
Para. 73	Protection for secured and preferential creditors	(a) Treat a reference to proposals as including a reference to the principles specified in the modification of para. 68 set out above. (b) Para. 73(1)(a) does not apply until the Bank of England has given an Objective 1 Achievement Notice.
Para. 74	Challenge to administrator's conduct	(a) The Bank of England may make an application to the court, on any grounds, including grounds of insufficient pursuit of Objective 1 in section 137 (in addition to applications that may anyway be made under para. 74). (b) Until the Bank of England has given an Objective 1 Achievement Notice, an order may be made on the application of a creditor only if the court is satisfied that it would not prejudice pursuit of Objective 1 in section 137.
Para. 75	Misfeasance	In addition to applications that may anyway be made under para. 75, an application may be made by the bank administrator or the Bank of England.
Para. 80	Termination: successful rescue	See section 153.
Para. 84	Termination: no more assets for distribution	See section 154.
Para. 85	Discharge of administration order
Para. 86	Notice to Companies Registrar of end of administration	See section 153.
Para. 87	Resignation	A bank administrator may resign only by notice in writing— (a) to the court, copied to the Bank of England, or (b) in the case of a bank administrator appointed by the creditors' committee under para. 90, to the creditors' committee.
Para. 88	Removal	Until the Bank of England has given an Objective 1 Achievement Notice, an application for an order may be made only with the Bank of England's consent.
Para. 89	Disqualification	The notice under sub-para. (2) must be given to the Bank of England.
Paras. 90 & 91	Replacement	(a) Until an Objective 1 Notice has been given, the Bank of England, and nobody else, may make an application under para. 91(1). (b) After that, either the Bank of England or a creditors' committee may apply. (c) Ignore para. 91(1)(b) to (e) and (2).
Para. 96	Substitution of floating charge-holder	Para. 96 applies to a bank administrator, but— (a) only after an Objective 1 Achievement Notice has been given, and (b) ignoring references to priority of charges.
Para. 98	Discharge	Discharge takes effect— (a) where the person ceases to be bank administrator before an Objective 1 Achievement Notice has been given, at a time determined by the Bank of England, and (b) otherwise, at a time determined by resolution of the creditors' committee (for which purpose ignore sub-para. (3)).
Para. 99	Vacation of office: charges and liabilities	In the application of sub-para. (3), payments may be made only— (a) in accordance with directions of the Bank of England, and (b) if the Bank is satisfied that they will not prejudice Objective 1 in section 137.
Paras. 100-103	Joint administrators	Until an Objective 1 Achievement Notice has been given, an application under para. 103 may be made only by the Bank of England.
Para. 104	Validity
Para. 106 (and section 430 and Schedule 10)	Fines
Paras. 107–109	Extension of time limits	(a) Until an Objective 1 Achievement Notice has been given, an application under para. 107 may be made only with the Bank of England's consent. (b) In considering an application under para. 107 the court must have regard to Objective 1 in section 137. (c) In para. 108(1) “consent” means consent of the Bank of England.
Para. 110	Amendment of provisions about time	An order under para. 110 may amend a provision of the Schedule as it applies by virtue of this section (whether or not in the same way as it amends the provision as it applies otherwise).
Para. 111	Interpretation
Paras. 112–116	Scotland

TABLE 2 OF APPLIED PROVISIONS

OTHER PROVISIONS OF THE INSOLVENCY ACT 1986

Section	Subject	Modification or comment
Section 135	Provisional appointment	(a) Treat the reference to the presentation of a winding-up petition as a reference to the making of an application for a bank administration order. (b) Subsection (2) applies in relation to England and Wales and Scotland (and subsection (3) does not apply). (c) Ignore the reference to the official receiver. (d) Only a person who is qualified to act as an insolvency practitioner and who consents to act may be appointed. (e) The court may only confer on a provisional bank administrator functions in connection with the pursuance of Objective 1; and section 138(2)(a) does not apply before a bank administration order is made. (f) A provisional bank administrator may not pursue Objective 2. (g) The appointment of a provisional bank administrator lapses on the appointment of a bank administrator. (h) Section 172(1), (2) and (5) apply to a provisional bank administrator.
Section 168(4) (and para. 13 of Schedule 4)	Discretion in managing and distributing assets	In the case of bank administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice distribution may be made only— (a) with the Bank of England's consent, or (b) out of assets which have been designated as realisable by agreement between the bank administrator and the Bank of England.
Section 176A	Unsecured creditors	In the case of bank administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice distribution may be made in reliance on s. 176A only— (a) with the Bank of England's consent, or (b) out of assets which have been designated as realisable by agreement between the bank administrator and the Bank of England.
Section 178	Disclaimer of onerous property	In the case of bank administration following transfer to a bridge bank, until the Bank of England has given an Objective 1 Achievement Notice notice of disclaimer may be given only with the Bank of England's consent.
Section 179	Disclaimer of leaseholds
Section 180	Land subject to rentcharge
Section 181	Disclaimer: powers of court
Section 182	Leaseholds
Section 188	Publicity
Section 213	Fraudulent trading
Section 214	Wrongful trading	Ignore subsection (6).
Section 233	Utilities
Section 234	Getting in company's property
Section 235	Co-operation with liquidator
Section 236	Inquiry into company's dealings
Section 237	Section 236: enforcement by court
Section 238	Transactions at undervalue (England and Wales)
Section 239	Preferences (England and Wales)
Section 240	Ss. 238 & 239: relevant time
Section 241	Orders under ss. 238 & 239	(a) In considering making an order in reliance on section 241 the court must have regard to Objective 1 of section 137. (b) Ignore subsections (2A)(a) and (3) to (3C).
Section 242	Gratuitous alienations (Scotland)
Section 243	Unfair preferences (Scotland)	In considering the grant of a decree under subsection (5) the court must have regard to Objective 1 of section 137.
Section 244	Extortionate credit transactions
Section 245	Avoidance of floating charges
Section 246	Unenforceability of liens
Sections 386 & 387, and Schedule 6 (and Schedule 4 to the Pension Schemes Act 1993)	Preferential debts
Section 389	Offence of acting without being qualified	Treat references to acting as an insolvency practitioner as references to acting as a bank administrator.
Section 390	Persons not qualified to act	Treat references to acting as an insolvency practitioner as references to acting as a bank administrator.
Section 391	Recognised professional bodies	An order under section 391 has effect in relation to any provision applied for the purposes of bank administration.
Sections 423–425	Transactions defrauding creditors	(a) In considering granting leave under section 424(1) the court must have regard to Objective 1 of section 137. (b) In considering making an order in reliance on section 425 the court must have regard to Objective 1 of section 137.
Sections 430–432 & Schedule 10	Offences
Section 433	Statements: admissibility	For section 433(1)(a) and (b) substitute a reference to a statement prepared for the purposes of a provision of this Part.

Modifications etc. (not altering text)

C6 S. 145 applied (with modifications) (23.11.2009) by Scottish and Northern Ireland Banknote Regulations 2009 (S.I. 2009/3056), reg. 1, Sch. 1 para. 4

Commencement Information

I10 S. 145 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

146 Status of bank administrator U.K.

A bank administrator is an officer of the court.

Commencement Information

I11 S. 146 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

147 Administrator's proposals U.K.

(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.

Commencement Information

I12 S. 147 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

148 Sharing information U.K.

(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.

Commencement Information

I13 S. 148 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I14 S. 148 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

Multiple transfers U.K.

149 General application of this Part U.K.

(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.

Commencement Information

I15 S. 149 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I16 S. 149 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

150 Bridge bank to private purchaser U.K.

(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.

Commencement Information

I17 S. 150 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

151 Property transfer from bridge bank U.K.

(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.

Commencement Information

I18 S. 151 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

152 Property transfer from temporary public ownership U.K.

(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.

Commencement Information

I19 S. 152 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I20 S. 152 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

Termination U.K.

153 Successful rescue U.K.

(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.

Commencement Information

I21 S. 153 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

154 Winding-up or voluntary arrangement U.K.

(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.

Commencement Information

I22 S. 154 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

Miscellaneous U.K.

155 Disqualification of directors U.K.

(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—

“21B Bank administration

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.”

Commencement Information

I23 S. 155 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

156 Application of other law U.K.

(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.

Commencement Information

I24 S. 156 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I25 S. 156 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

157 Other processes U.K.

(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).

Commencement Information

I26 S. 157 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

158 Building societies U.K.

(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.

Commencement Information

I27 S. 158 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I28 S. 158 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

159 Credit unions U.K.

(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.

Commencement Information

I29 S. 159 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I30 S. 159 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

160 Rules U.K.

(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.

Commencement Information

I31 S. 160 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

161 Fees U.K.

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.”

Commencement Information

I32 S. 161 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

162 Evidence U.K.

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),”.

Commencement Information

I33 S. 162 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

163 Partnerships U.K.

(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.

Commencement Information

I34 S. 163 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I35 S. 163 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

164 Scottish partnerships U.K.

(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.

Commencement Information

I36 S. 164 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I37 S. 164 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

165 Co-operation between courts U.K.

(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.”

Commencement Information

I38 S. 165 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

166 Interpretation: general U.K.

(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.

Commencement Information

I39 S. 166 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 3

167 Northern Ireland U.K.

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.

Modifications etc. (not altering text)

C7 S. 167 applied (with modifications) (23.11.2009) by Scottish and Northern Ireland Banknote Regulations 2009 (S.I. 2009/3056), reg. 1, Sch. 1 para. 4

Commencement Information

I40 S. 167 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3

168 Consequential provision U.K.

(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.

Commencement Information

I41 S. 168 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 3

I42 S. 168 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 3