C1C4C2C3Part 2Bank Insolvency
Pt. 2 modified (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), Sch. 1 para. 1 (as amended (7.4.2010) by Building Societies (Insolvency and Special Administration) (Amendment) Order 2010 (S.I. 2010/1189), arts. 1(2), 2 and amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 8)
Pt. 2 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2
Pt. 2 applied (with modifications) (8.2.2011) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 1, Sch. 1 paras. 6, 7
Other processes
I1120Notice to F1PRA of preliminary steps
1
An application for an administration order in respect of a bank may not be determined unless the conditions below are satisfied.
2
A petition for a winding up order in respect of a bank may not be determined unless the conditions below are satisfied.
3
A resolution for voluntary winding up of a bank may not be made unless the conditions below are satisfied.
4
An administrator of a bank may not be appointed unless the conditions below are satisfied.
5
Condition 1 is that the F12the PRA and the Bank of England have been notified—
a
by the applicant for an administration order, that the application has been made,
b
by the petitioner for a winding up order, that the petition has been presented,
c
by the bank, that a resolution for voluntary winding up may be made, or
d
by the person proposing to appoint an administrator, of the proposed appointment.
6
Condition 2 is that a copy of the notice complying with Condition 1 has been filed F3(in Scotland, lodged) with the court (and made available for public inspection by the court).
7
Condition 3 is that—
a
the period of F117 days, beginning with the day on which the notice is received, has ended, or
F10b
both—
i
the Bank of England has informed the person who gave the notice that it does not intend to exercise a stabilisation power under Part 1 in relation to the firm (and Condition 5 has been met, if applicable), and
ii
each of the PRA and the Bank of England has informed the person who gave the notice that it does not intend to apply for a bank insolvency order.
8
Condition 4 is that no application for a bank insolvency order is pending.
F48A
Condition 5—
a
applies only if a resolution instrument has been made under section 12A with respect to the bank in the 3 months ending with the date on which the PRA receives the notification under Condition 1, and
b
is that the Bank of England has informed the person who gave the notice that it consents to the insolvency procedure to which the notice relates going ahead.
9
Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a bank's creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading).
10
F9Where notice has been given under Condition 1 —
F8a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
c
if the Bank of England decides to apply for a bank insolvency order or to exercise a stabilisation power under Part 1, the Bank shall inform the person who gave the notice, within the period in Condition 3(a)F6, and
d
if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.
F511
References in this section to the insolvency procedure to which the notice relates are to the procedure for the determination, resolution or appointment in question (see subsections (1) to (4)).
Pt. 2 applied (with modifications) by 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)