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The Investment Bank Special Administration (Scotland) Rules 2011

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PART 10Application of section 216 of the 1986 Act

Preliminary

157.  The Rules in this Part—

(a)relate to the leave required under section 216 of the 1986 Act (restriction on re-use of company names) for a person to act as mentioned in section 216(3) of that Act in relation to an investment bank with a prohibited name; and

(b)prescribe the cases excepted from that provision, that is to say, those in which a person to whom the section applies may so act without that leave.

Application for leave under section 216(3) of the 1986 Act

158.  When considering an application for leave under section 216(3) of the 1986 Act, the court may call on the administrator or any former administrator of the investment bank for a report of the circumstances in which that investment bank became insolvent, and the extent (if any) of the applicant’s apparent responsibility for its doing so.

First excepted case

159.—(1) This rule applies where—

(a)a person (“P”) was within the period mentioned in section 216(1) of the 1986 Act a director, or shadow director, of an investment bank that has gone into special administration by virtue of Ground A in regulation 6(1) being satisfied; and

(b)P acts in all or any of the ways specified in section 216(3) of that Act in connection with, or for the purposes of, the carrying on (or proposed carrying on) of the whole or substantially the whole of the business of the investment bank where that business (or substantially the whole of it) is (or is to be) acquired from the investment bank under arrangements—

(i)made by the administrator,

(ii)made before the investment bank entered into special administration by an office-holder acting in relation to it as supervisor of a voluntary arrangement under Part 1 of the 1986 Act,

(iii)made before the investment bank entered into special administration (bank administration) or special administration (bank insolvency) by a person appointed in accordance with rule 17 or 30, or

(iv)made before the investment bank entered into special administration (bank administration) by the Bank of England under a power in Part 1 of the 2009 Act (special resolution regime).

(2) P will not be taken to have contravened section 216 of the 1986 Act if prior to P’s acting in the circumstances set out in paragraph (1) a notice is, in accordance with the requirements of paragraph (3)—

(a)given by P to every creditor of the investment bank whose name and address—

(i)is known by P, or

(ii)is ascertainable by P on the making of such enquiries as are reasonable in the circumstances; and

(b)published in the Edinburgh Gazette.

(3) The notice referred to in paragraph (2)—

(a)may be given and published before the completion of the arrangements referred to in paragraph (1)(b) but must be given and published no later than 28 days after that completion; and

(b)must state—

(i)the name and registered number of the investment bank,

(ii)P’s name,

(iii)that it is P’s intention to act in all or any of the ways specified in section 216(3) of the 1986 Act in connection with, or for the purposes of, the carrying on of the whole or substantially the whole of the business of the investment bank, and

(iv)the prohibited name.

(4) Notice may in particular be given under this rule—

(a)prior to the investment bank entering special administration where the business (or substantially the whole of the business) is, or is to be, acquired by another company under arrangements made by any of the persons mentioned in paragraph (1)(b) (whether or not at the time of the giving of the notice P is a director of that other company); or

(b)at a time where P is a director of another company where—

(i)the other company has acquired, or is to acquire, the whole, or substantially the whole, of the business of the investment bank under arrangements made by the administrator, and

(ii)it is proposed that after the giving of the notice a prohibited name should be adopted by the other company.

(5) Where the investment bank has gone into special administration (bank administration), the reference in this rule to the business of the investment bank may be considered as a reference to only the deposit-taking business of the investment bank.

Second excepted case

160.—(1) Where a person (“P”) to whom section 216 of the 1986 Act applies as having been a director or shadow director of the investment bank applies for leave of the court under that section not later than 7 days from the date on which the investment bank went into special administration, P may, during the period specified in paragraph (2), act in any of the ways mentioned in section 216(3), notwithstanding that P has not the leave of the court under that section.

(2) The period referred to in paragraph (1) begins with the day on which the investment bank goes into special administration and ends either on the day falling 6 weeks after that date or on the day on which the court disposes of the application for leave under section 216, whichever of those days occurs first.

Third excepted case

161.  The court’s leave under section 216(3) of the 1986 Act is not required where the investment bank there referred to, though known by a prohibited name within the meaning of the section—

(a)has been known by that name for the whole of the period of 12 months ending with the day before the investment bank went into special administration, and

(b)has not at any time in those 12 months been dormant within the meaning of section 1169(1), (2) and (3)(a) of the 2006 Act.

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