Search Legislation

Financial Services Act 2010

 Help about what version

What Version

 Help about advanced features

Advanced Features

Changes over time for: Section 16

 Help about opening options

Alternative versions:

Changes to legislation:

There are currently no known outstanding effects for the Financial Services Act 2010, Section 16. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

16Contribution to costs of special resolution regimeU.K.

This section has no associated Explanatory Notes

(1)In the Financial Services and Markets Act 2000, for section 214B substitute—

214BContribution to costs of special resolution regime

(1)This section applies if—

(a)a stabilisation power under Part 1 of the Banking Act 2009 has been exercised in respect of a bank, building society or credit union within the meaning of that Part (“the institution”); and

(b)the Treasury think that the institution was or was likely to have been, or but for the exercise of the power would have become, unable to satisfy claims against it.

(2)The Treasury may require the scheme manager to make payments (to the Treasury or any other person) in respect of expenses of a prescribed description incurred (by the Treasury or that person) in connection with the exercise of the power.

(3)Subsection (2) is subject to section 214C (limit on amount of special resolution regime payments).

(4)In subsection (2) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including interest) incurred at or before that time; and

(b)the total amount recovered, or received from the scheme manager, in respect of the institution, at or before that time, by—

(i)the Treasury; and

(ii)any other person who has incurred expenses in connection with the exercise of the power that are of a description prescribed under subsection (2).

(5)Any payment made by the scheme manager under subsection (2) is to be treated for the purposes of this Part as an expense under the compensation scheme.

(6)In this section and section 214C “specified rate” means a rate specified by the Treasury.

(7)Different rates may be specified under different provisions or for different periods.

(8)A rate may be specified by reference to a rate set (from time to time) by any person.

214CLimit on amount of special resolution regime payments

(1)The total amount of special resolution regime payments required to be made in respect of a person (“the institution”) may not exceed—

(a)notional net expenditure (see subsection (3)), minus

(b)actual net expenditure (see subsection (4)).

(2)A “special resolution regime payment” is—

(a)a payment under section 214B(2); or

(b)a payment required to be made by the scheme manager by virtue of section 61 of the Banking Act 2009 (special resolution regime: compensation).

(3)Notional net expenditure is—

(a)the total amount of expenses that would have been incurred under the compensation scheme in respect of the institution if the stabilisation power had not been exercised and the institution had been unable to satisfy claims against it, minus

(b)the total amount that would have been likely, at the time when the power was exercised, to be recovered by the scheme manager in respect of the institution in those circumstances.

(4)Actual net expenditure is—

(a)the total amount of expenses (other than special resolution regime payments) actually incurred by the scheme manager in respect of the institution, minus

(b)the total amount actually recovered by the scheme manager in respect of the institution.

(5)In subsection (3)(a) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including interest) that would have been incurred as mentioned in subsection (3)(a) at or before that time; and

(b)the total amount that would have been likely to have been recovered as mentioned in subsection (3)(b) at or before that time.

(6)In subsection (4)(a) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including special resolution regime payments and interest) actually incurred by the scheme manager in respect of the institution at or before that time; and

(b)the total amount actually recovered by the scheme manager in respect of the institution at or before that time.

(7)In paragraph (b) of subsections (3) to (6) references to amounts recovered (or likely to have been recovered) by the scheme manager do not include any levy received (or likely to have been received) by it.

214DContributions under section 214B: supplementary

(1)This section supplements sections 214B and 214C.

(2)The scheme manager must determine—

(a)the amounts of expenses (other than interest) that would have been incurred as mentioned in section 214C(3)(a); and

(b)the time or times at which those amounts would have been likely to have been incurred.

(3)The Treasury, or a person designated by the Treasury, must in accordance with regulations appoint a person (“the valuer”) to determine—

(a)the amounts that would have been likely, at the time when the stabilisation power was exercised, to be recovered as mentioned in section 214C(3)(b); and

(b)the time or times at which those amounts would have been likely to be recovered.

The person appointed under this subsection may be the person appointed as valuer under section 54 of the Banking Act 2009 in respect of the exercise of the stabilisation power.

(4)Regulations may enable the Treasury to specify principles to be applied by—

(a)the scheme manager when exercising functions under subsection (2); or

(b)the valuer when exercising functions under subsection (3).

(5)The regulations may in particular enable the Treasury to require the scheme manager or valuer—

(a)to use, or not to use, specified methods;

(b)to take specified matters into account in a specified manner; or

(c)not to take specified matters into account.

(6)Regulations—

(a)must provide for independent verification of expenses within section 214B(2);

(b)may provide for the independent verification of other matters; and

(c)may contain provision about the appointment and payment of an auditor.

(7)Regulations—

(a)must contain provision enabling the valuer to reconsider a decision;

(b)must provide a right of appeal to a court or tribunal against any decision of the valuer;

(c)may provide for payment of the valuer; and

(d)may apply (with or without modifications) or make provision corresponding to—

(i)any provision of sections 54 to 56 of the Banking Act 2009; or

(ii)any provision made, or that could be made, by virtue of any of those sections.

(8)Regulations may make provision for payments under section 214B(2) to be made—

(a)before any verification required by the regulations is undertaken, and

(b)before the limit imposed by section 214C is calculated,

subject to any necessary later adjustment.

(9)If they do so they must provide that the amount of any payment required by virtue of subsection (8) must not be such as to give rise to an expectation that an amount will be required to be repaid to the scheme manager (once any necessary verification has been undertaken and the limit imposed by section 214C has been calculated).

(10)Regulations may—

(a)make provision supplementing section 214B or 214C or this section;

(b)make further provision about the method by which amounts to be paid under section 214B(2) are to be determined;

(c)make provision about timing;

(d)make provision about procedures to be followed;

(e)provide for discretionary functions to be exercised by a specified body or by persons of a specified class; and

(f)make provision about the resolution of disputes (which may include provision conferring jurisdiction on a court or tribunal).

(11)Regulations” means regulations made by the Treasury.

(12)Any payment made by the Treasury by virtue of this section is to be met out of money provided by Parliament.

(13)The compensation scheme may make provision about payments under section 214B(2) and levies in connection with such payments (except provision inconsistent with any provision made by or under section 214B or 214C or this section).

(2)Sections 214B to 214D of the Financial Services and Markets Act 2000 (as substituted by subsection (1)) apply to any case where a stabilisation power was exercised before the commencement of this section as if the references in sections 214B(4) and 214C(5) and (6) of that Act to any time were to any time on or after 19 November 2009.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources