Draft Order laid before Parliament under sections 47(5) and 48(6) of the Banking Act 2009, for approval by resolution of each House of Parliament.
Draft Statutory Instruments
Banks And Banking
Made
*** 2009
Coming into force
*** 2009
The Treasury make this Order in exercise of the powers conferred by sections 47, 48 and 259(1) of the Banking Act 2009(1).
A draft of this Order has been laid before and approved by a resolution of each House of Parliament in accordance with sections 47(5) and 48(6) of that Act.
1. This Order may be cited as the Banking Act 2009 (Restriction of Partial Property Transfers) (Amendment) Order 2009 and shall come into force on the day after the day on which it is made.
2. The Banking Act 2009 (Restriction of Partial Property Transfers) Order 2009(2) is amended as follows.
3. In article 1(3)—
(a)after the definition of “the Bank” insert—
““Banking Consolidation Directive” means Directive 2006/48/EC of the European Parliament and of the Council relating to the taking up and pursuit of the business of credit institutions(3);”;
(b)in paragraphs (c) and (d) of the definition of “excluded rights”—
(i)delete “solely”; and
(ii)after “instruments” insert “or an activity referred to in Annex I to the Banking Consolidation Directive”;
(c)at the end of paragraph (d) of the definition of “excluded rights” delete “or”;
(d)after paragraph (e) of the definition of “excluded rights” insert—
“or
which relate to transferable securities (other than transferable securities referred to or described in a set-off arrangement, netting arrangement or title transfer financial collateral arrangement referred to in article 3(1));”;
(e)in the definition of “financial instrument”—
(i)the words from “any instrument” to the end become paragraph (a);
(ii)for the words from “Directive” to “instruments” substitute “the Markets in Financial Instruments Directive”;
(iii)at the end insert—
“(b)any option, future, swap, forward, contract for differences or other derivative contract not falling within paragraph (a); and
(c)any combination of any of the foregoing;”;
(f)after the definition of “financial instrument” insert—
““Markets in Financial Instruments Directive” means Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments(4);”;
(g)in the definition of “relevant authority” substitute “(a)” and “(b)” for “(f)” and “(g)” respectively;
(h)in the definition of “relevant financial instrument”—
(i)substitute “(a)”, “(b)”, “(c)” and “(d)” for “(h)”, “(i)”, “(j)” and “(k)” respectively;
(ii)after “loan;” delete “or”;
(iii)at the end insert—
“or
any contract for the sale, purchase or delivery of—
transferable securities;
the currency of the United Kingdom or any other country, territory or monetary union;
palladium, platinum, gold, silver or any other precious metal; or
any other commodity; ”;
(i)in the definition of “retail deposit” substitute “(a)” and “(b)” for “(l)” and “(m)” respectively;
(j)after the definition of “title transfer financial collateral arrangements” insert—
“;
“transferable securities” has the meaning given by Article 4(18) of the Markets in Financial Instruments Directive”.
4. In article 3(6) for the words from “shall” to “subordinated debt” in the second place where they occur substitute “and the references to transferable securities in paragraph (f) of the definition of “excluded rights” shall be treated as if they were respectively a reference to subordinated debt or transferable securities”.
5. In article 5—
(a)in paragraph (1) after “(2),” insert “(2A),”;
(b)after paragraph (2) insert—
“(2A) A partial property transfer to which this Order applies may not transfer the benefit of the security unless the liability which is secured is also transferred.”;
(c)in paragraph (5) after “(2),” insert “(2A),”; and
(d)in paragraph (6) after “(2)” insert “, (2A)” in each place where it occurs.
6. After article 7 insert—
7A. A partial property transfer to which this Order applies which makes provision under section 34(7)(a) of the Act may remove or alter the terms of the trust (howsoever arising) only to the extent necessary or expedient for the purpose of transferring from the banking institution to the transferee—
(a)the legal or beneficial interest of the banking institution in the property held on trust;
(b)any powers, rights or obligations of the banking institution in respect of the property held on trust.”
7. In article 8(2)(c) after “a” insert “relevant”.
[Name]
[Name]
Two of the Lords Commissioners of Her Majesty’s Treasury
Date
(This note is not part of the Order)
This Order amends the Banking Act 2009 (Restriction of Partial Property Transfers) Order 2009 (the “Principal Order”).
Article 3 makes a number of changes to the definitions in article 1(3) of the Principal Order.
Articles 3(b), (e) and (h) narrow the scope of paragraphs (c) and (d) of the definition of “excluded rights”. Article 3(b) widens the scope of the activities in respect of which rights and liabilities may be protected under Article 3(1) of the Principal Order. Articles 3(e) and (h) respectively extend the definition of “financial instrument” and “relevant financial instrument”.
Article 3(d) adds a further item to the definition of “excluded rights”, namely rights in respect of transferable securities to the extent that they are not referred to or described in a set-off arrangement, netting arrangement or title transfer financial collateral arrangement.
Article 5 amends article 5 of the Principal Order to provide expressly that the benefit of security may not be transferred without the liability it secures.
Article 6 restricts the provision that can be made in a property instrument under section 34(7)(a) of the Banking Act 2009 in relation to property held on trust.
An Impact Assessment has not been prepared for this Order as one was prepared for the Principal Order(5).
OJ L177 30.6.2006 p.1.
OJ L145 30.4.2004 p.1.
The Impact Assessment is attached to the Explanatory Memorandum for the Principal Order, which is available at the following address: http://www.opsi.gov.uk/si/si2009/em/uksiem_20090322_en.pdf.