Banking Act 2009

Introduction U.K.

1 Overview U.K.

(1) The purpose of the special resolution regime for banks is to address the situation where all or part of the business of a bank has encountered, or is likely to encounter, financial difficulties.

(2) The special resolution regime consists of—

(a) the three stabilisation options,

(b) the bank insolvency procedure (provided by Part 2), and

(c) the bank administration procedure (provided by Part 3).

(3) The three “stabilisation options” are—

(a) transfer to a private sector purchaser (section 11),

(b) transfer to a bridge bank (section 12), and

(c) transfer to temporary public ownership (section 13).

(4) Each of the three stabilisation options is achieved through the exercise of one or more of the “stabilisation powers”, which are—

(a) the share transfer powers (sections 15, 16, 26 to 31 and 85), and

(b) the property transfer powers (sections 33 and 42 to 46).

(5) Each of the following has a role in the operation of the special resolution regime—

(a) the Bank of England,

(b) the Treasury,

[F1 (c) the Prudential Regulation Authority, and

(d) the Financial Conduct Authority.]

(6) The Table describes the provisions of this Part.

Sections	Topic
Sections 1 to 3	Introduction
Sections 4 to 6	Objectives and code
Sections 7 to 10	Exercise of powers: general
Sections 11 to 13	The stabilisation options
Sections 14 to 32	Transfer of securities
Sections 33 to [F2 48A]	Transfer of property
Sections 49 to 62	Compensation
Sections 63 to 75	Incidental functions
Sections 76 to 81	Treasury
Sections 82 and 83	Holding companies
[F3 Section 83A]	[F3 Banks not regulated by the PRA]
Sections 84 to 89	Building societies, &c.

Textual Amendments

F1 S. 1(5)(c)(d) substituted for s. 1(5)(c) (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 2(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F2 Word in s. 1(6) substituted (8.4.2010) by Financial Services Act 2010 (c. 28), s. 26(1)(l), Sch. 2 para. 40

F3 Words in s. 1(6) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 2(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I1 S. 1 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 1

2 Interpretation: “bank” U.K.

(1) In this Part “bank” means a UK institution which has permission under [F4 Part 4A] of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22).

(2) But “bank” does not include—

(a) a building society (within the meaning of section 119 of the Building Societies Act 1986),

(b) a credit union within the meaning of section 31 of the Credit Unions Act 1979 [F5 or a credit union within the meaning of Article 2(2) of the Credit Unions (Northern Ireland) Order 1985], or

(c) any other class of institution excluded by an order made by the Treasury.

(3) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.

(4) Where a stabilisation power is exercised in respect of a bank, it does not cease to be a bank for the purposes of this Part if it later loses the permission referred to in subsection (1).

(5) An order under subsection (2)(c)—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(6) Section 84 applies this Part to building societies with modifications.

(7) Section 89 allows the application of this Part to credit unions.

Textual Amendments

F4 Words in s. 2 substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 3 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F5 Words in s. 2(2)(b) inserted (31.3.2012) by The Financial Services and Markets Act 2000 (Permissions, Transitional Provisions and Consequential Amendments) (Northern Ireland Credit Unions) Order 2011 (S.I. 2011/2832), arts. 2(c), 12(2)

Commencement Information

I2 S. 2 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 1

I3 S. 2 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 1

3 Interpretation: other expressions U.K.

In this Part—

• [F6 “the PRA” means the Prudential Regulation Authority,

• “the FCA” means the Financial Conduct Authority, and]

• “financial assistance” has the meaning given by section 257.

Textual Amendments

F6 Words in s. 3 substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 4 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I4 S. 3 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 1