Banking (Special Provisions) Act 2008
| Jurisdiction | UK Non-devolved |
| Citation | 2008 c. 2 |
Banking (Special Provisions) Act 2008
2008 Chapter 2
An Act to make provision to enable the Treasury in certain circumstances to make an order relating to the transfer of securities issued by, or of property, rights or liabilities belonging to, an authorised deposit-taker; to make further provision in relation to building societies; and for connected purposes.
[21st February 2008]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Introduction
1 Meaning of ‘authorised UK deposit-taker’
(1) In this Act "authorised UK deposit-taker" means a UK undertaking that under Part 4 of FSMA 2000 has permission to accept deposits.
(2) That expression does not, however, include such an undertaking with permission to accept deposits only for the purposes of, or in the course of, an activity other than accepting deposits.
2 Cases where Treasury's powers are exercisable
(1) The power of the Treasury to make an order under—
(a) section 3 (transfer of securities issued by an authorised UK deposit-taker), or
(b) section 6 (transfer of property, rights and liabilities of an authorised UK deposit-taker),
is exercisable in relation to an authorised UK deposit-taker if (and only if) it appears to the Treasury to be desirable to make the order for either or both of the following purposes.
This is subject to subsection (7).
(2) The purposes are—
(a) maintaining the stability of the UK financial system in circumstances where the Treasury consider that there would be a serious threat to its stability if the order were not made;
(b) protecting the public interest in circumstances where financial assistance has been provided by the Treasury to the deposit-taker for the purpose of maintaining the stability of the UK financial system.
(3) The reference in subsection (2)(b) to the provision of financial assistance by the Treasury to the deposit-taker includes—
(a) any case where the Bank of England has provided financial assistance to the deposit-taker and—
(i) the Treasury have assumed a liability in respect of the assistance,
(ii) the liability is of a kind of which the Treasury are expected to give relevant notice, and
(iii) the Treasury have given relevant notice of the liability;
(b) any case where the Chancellor of the Exchequer has announced that the Treasury (whether acting alone or with the Bank of England) would, if necessary, put in place relevant guarantee arrangements in relation to the deposit-taker (as well as any case where any such arrangements have been put in place, whether or not following such an announcement).
(4) For the purposes of subsection (3) the Treasury give "relevant notice" of a liability if—
(a) they lay a Minute before the House of Commons containing information about the liability, or
(b) they give written notice containing such information to the person who chairs the House of Commons Committee of Public Accounts and the person who chairs the House of Commons Treasury Committee.
(5) It is immaterial whether the notice or announcement mentioned in subsection (3) is given or made before or after the passing of this Act.
(6) In this Act "relevant guarantee arrangements", in relation to any authorised UK deposit-taker, means any guarantee arrangements for protecting some or all of the depositors or other creditors of the deposit-taker.
(7) Where an order has been made under section 3 or 6 in relation to any authorised UK deposit-taker, subsection (1) does not apply in relation to any subsequent exercise of the power to make an order under either of those sections in relation to that deposit-taker.
(8) The power of the Treasury to make an order under section 3 or 6 in relation to an authorised UK deposit-taker may not be exercised after the end of the period of one year beginning with the day on which this Act is passed.
(9) Subsection (8) does not affect the continuation in force or effect of any order made or other thing done by virtue of either of those sections before the end of that period.
(10) In this section "the UK financial system" means the financial system in the United Kingdom.
(11) Section 13 of the National Audit Act 1983 (c. 44)
(interpretation of references to Committee of Public Accounts) applies for the purposes of this section, but as if—
(a) the references in that section to that Act were to this Act, and
(b) the references in that section to the House of Commons Committee of Public Accounts included the House of Commons Treasury Committee.
Transfer of securities
3 Transfer of securities
(1) The Treasury may, in relation to all or any securities of a specified description that have been issued by an authorised UK deposit-taker, by order make provision for or in connection with, or in consequence of, the transfer of the securities to any of the following—
(a) the Bank of England;
(b) a nominee of the Treasury;
(c) a company wholly owned by the Bank of England or the Treasury;
(d) any body corporate not within paragraph (c).
(2) Schedule 1 specifies particular kinds of provisions that may be included in an order under this section.
(3) Where an order providing for the transfer of any securities has been made under this section, the power to make an order under this section may be subsequently exercised so as to make provision in connection with, or in consequence of, the transfer (including provision of a kind specified in Schedule 1) even though the order does not itself provide for the transfer of any securities.
(4) Where an order under this section or section 6 ("the initial order") has been made in relation to an authorised UK deposit-taker, the power to make an order under this section may be subsequently exercised in relation to that deposit-taker whether or not any transfer of securities provided for by the order is to the person to whom any transfer was made by or under the initial order.
(5) For the purposes of this section any provision made by an order under this section in relation to any transaction or event taking place while securities transferred by such an order are held by a person within subsection (1)(a), (b) or (c) is to be regarded as provision made in consequence of the transfer.
4 Extinguishment of subscription rights
(1) This section applies where the Treasury make, or have made, an order under section 3 providing for the transfer of securities issued by an authorised UK deposit-taker.
(2) The Treasury may by order make provision for or in connection with, or in consequence of, the extinguishment of rights of any specified description to subscribe for, or otherwise acquire, securities of—
(a) the deposit-taker, or
(b) any of its subsidiary undertakings.
(3) Subsection (2) applies whether the rights have been granted by the deposit-taker or otherwise.
(4) Where an order providing for the extinguishment of any rights has been made under this section, the power to make an order under this section may be subsequently exercised so as to make provision in connection with, or in consequence of, the extinguishment of those rights even though the order does not itself provide for any rights to be extinguished.
5 Compensation etc. for securities transferred etc.
(1) The Treasury must by order—
(a) in relation to an order under section 3 that transfers securities only to the public sector, make a scheme for determining the amount of any compensation payable by the Treasury to persons who held the securities immediately before they were so transferred;
(b) in relation to an order under section 3 that transfers securities only to a private sector body, make provision for determining the amount of any consideration payable by the body to persons who held the securities immediately before they were so transferred;
(c) in relation to an order under section 3 that transfers securities both to the public sector and a private sector body, make provision for determining—
(i) the amount of any compensation payable by the Treasury, and
(ii) the amount of any consideration payable by the private sector body concerned,
to persons who held the securities immediately before they were so transferred.
(2) The Treasury must by order make provision for determining the amount of any compensation payable to persons whose rights are extinguished by virtue of an order under section 4 (a "section 4 order") and—
(a) in any case where the section 4 order is made in consequence of an order under section 3 that transfers securities only to the public sector, the order must provide for any compensation to be payable by the Treasury;
(b) in any case where the section 4 order is made in consequence of an order under section 3 that transfers securities only to a private sector body, the order must provide for any compensation to be payable by the private sector body concerned;
(c) in any case where the section 4 order is made in consequence of an order under section 3 that transfers securities both to the public...
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