Banking (Special Provisions) Act 2008

Transfer of property etc.

6 Transfer of property, rights and liabilities

(1) The Treasury may by order make provision for or in connection with, or in consequence of, the transfer of property, rights and liabilities of an authorised UK deposit-taker to either (or each) of the following—

(a) a company wholly owned by the Bank of England or the Treasury;

(b) a body corporate not within paragraph (a).

(2) An order under this section may define the property, rights and liabilities to be transferred in one or more of the following ways—

(a) by specifying or describing the property, rights and liabilities in question;

(b) by referring to all the property, rights and liabilities comprised in the whole or a specified part of the deposit-taker’s business;

(c) by identifying the manner in which the property, rights and liabilities to be transferred are to be determined.

(3) Schedule 2 specifies particular kinds of provisions that may be included in an order under this section.

(4) Where an order providing for the transfer of any property, rights or liabilities 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 2) even though the order does not itself provide for the transfer of any property, rights or liabilities.

(5) Where an order under this section or section 3 (“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 property, rights or liabilities provided for by the order is to the person to whom any transfer was made by or under the initial order.

(6) A second or subsequent order made under this section in relation to an authorised UK deposit-taker may make provision for any of the property, rights or liabilities transferred by or under a previous order under this section to be transferred back to the deposit-taker.

(7) The provisions of this section and Schedule 2 apply for the purposes of subsection (6) with any necessary modifications.

(8) 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 property, rights or liabilities transferred by or under such an order are held by a company within subsection (1)(a) is to be regarded as provision made in consequence of the transfer.

7 Compensation etc. for property etc. transferred

(1) The Treasury must by order make provision—

(a) in relation to an order under section 6 providing for the transfer of property, rights or liabilities to a company within subsection (1)(a) of that section, for determining the amount of any compensation payable by the Treasury to the authorised UK deposit-taker concerned;

(b) in relation to an order under section 6 providing for the transfer of property, rights or liabilities to any other body, for determining the amount of any consideration payable by the transferee to the authorised UK deposit-taker concerned.

(2) An order under this section may also make provision for extending provisions of the order, in any specified circumstances, to persons otherwise affected by any provision made in an order under section 6.

(3) In determining the amount of any compensation payable by the Treasury by virtue of any provision in an order under this section, it must be assumed—

(a) that all financial assistance provided by the Bank of England or the Treasury to the deposit-taker in question has been withdrawn (whether by the making of a demand for repayment or otherwise), and

(b) that no financial assistance would in future be provided by the Bank of England or the Treasury to the deposit-taker in question (apart from ordinary market assistance offered by the Bank of England subject to its usual terms).

(4) For the purposes of subsection (3)—

(a) the references to the provision of financial assistance by the Treasury to the deposit-taker include any case where the Chancellor of the Exchequer announces 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 are put in place, whether or not following such an announcement);

(b) “ordinary market assistance” means assistance provided as part of the Bank’s standing facilities in the sterling money markets or as part of the Bank’s open market operations in those markets.

(5) It is immaterial whether the announcement mentioned in subsection (4)(a) is made before or after the passing of this Act.

(6) An order under this section must be made within the period of 3 months beginning with the day on which the order under section 6 is made.

(7) But nothing in subsection (6) prevents the making, at any time after the end of that period, of a second or subsequent order under this section in relation to the order under section 6.