Where regulation 2 would apply but for the fact that the transfer of the members of the initial scheme is not determined by the Regulator to amount to an act or failure to act falling within section 38(5), the sum specified by the Regulator in the contribution notice may be either the whole or a specified part of the amount of the shortfall sum in the initial scheme at the relevant time which, in the Regulator’s opinion, is attributable to the members transferred.

In this regulation “shortfall sum” is to be construed, subject to paragraph (3), in accordance with section 39.

In estimating the amounts described in section 39(2) (a) or (b) for the purposes of this regulation, the Regulator is to disregard any reduction of the liabilities of the initial scheme brought about by the transfer.