Part 2U.K.Bank Insolvency

Other processesU.K.

120Notice to [F1PRA] of preliminary stepsU.K.

(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 [F2the 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 [F47 days], beginning with the day on which the notice is received, has ended, or

[F5(b)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.

[F6(8A)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)[F7Where notice has been given under Condition 1]

F8(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the [F9PRA] shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a bank insolvency order, F10...

(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)[F11, 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.]

[F12(11)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)).]

Textual Amendments

F1Word in s. 120 heading substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 44(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I1S. 120 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2