Search Legislation

The Investment Bank Special Administration Regulations 2011

What Version

 Help about what version
  • Latest available (Revised)
  • Original (As made)

Status:

This is the original version (as it was originally made). This item of legislation is currently only available in its original format.

Application of Part 3 of the Act and the Insolvency Act

This sectionnoteType=Explanatory Memorandum has no associated

6.  (1)  The provisions of Part 3 of the Act (bank administration) set out in the Table apply in relation to a special administration (bank administration) with the following modifications—

(a)the modifications set out in sub-paragraph (2); and

(b)any other modification specified in the Table.

(2) The modifications are that a reference to—

(a)a bank is to a deposit-taking bank;

(b)bank administration is to special administration (bank administration);

(c)a bank administration order is to a special administration (bank administration) order;

(d)the bank administrator is to the administrator;

(e)Objective 1, or Objective 1 in section 137 or 138, is to Objective A in paragraph 3;

(f)the Objectives in section 137 is to Objective A and the special administration objectives;

(g)an Objective 1 Achievement Notice is to an Objective A Achievement Notice;

(h)an Objective 1 Interim Achievement Notice is to an Objective A Interim Achievement Notice (see section 150 of the Act as applied by the Table);

(i)“provisional liquidator” means a person appointed under section 135 of the Insolvency Act, as applied by this Schedule; and

(j)rules made under section 411 of the Insolvency Act 1986 is to insolvency rules.

(3) Where section 145 of the Act applies a provision of the Insolvency Act with a modification, that provision applies in relation to special administration (bank administration) with that modification unless otherwise stated in the Table.

Table of applied provisions

Provision of Part 3 of the ActSubjectModification or comment
Section 138Objective 1: supporting private sector purchaser or bridge bank
Section 139(2)Objective A: duration
(a)

The reference to section 145 is to that section as applied by this paragraph.

(b)

The reference to “notice under subsection (1) above” is to notice under paragraph 3(2).

Section 141(2) to (4)Bank administration order
Section 142Application
Section 143Grounds for applying
Section 144Grounds for makingIn making a special administration (bank administration) order, the court must also be satisfied that the company is an investment bank.
Section 145

General powers etc.

(a)

In subsection (1), the administrator may not rely on subsection (1) for the purpose of recovering property transferred by a property transfer instrument.

(b)

Subsection (3)(c), (5) and (6) are not applied.

Section 145Table 1: Applied Provisions: Insolvency Act 1986, Schedule B1(1)

In Table 1 after subsection (6)—

(a)

Paragraph 41 is not applied.

(b)

In paragraph 46 —

(i)

in sub-paragraph (3)(a), in addition to obtaining the list of creditors, the administrator shall obtain as complete a list as possible of the clients of the investment bank,

(ii)

in sub-paragraph (3)(b), the administrator shall send a notice of their appointment to each client of whose claim and address the administrator is aware and to the FSA.

(c)

In paragraph 47, in sub-paragraph (2), the statement must also include particulars (to the extent prescribed) of the client assets held by the investment bank.

(d)

Paragraphs 49 to 54 are not applied: see paragraphs 7 to 14 of this Schedule.

(e)

Paragraph 55 is only applied where the Bank of England has given the Objective A Achievement Notice and—

(i)

sub-paragraph (1)(a) is not applied,

(ii)

in sub-paragraph (1)(b), the meeting referred to is one held under paragraph 12 of this Schedule,

(iii)

in making an order under sub-paragraph (2) the court must have regard to the special administration objectives, and

(iv)

sub-paragraph (2)(d) is not applied.

(f)

In paragraph 56—

(i)

before the Bank of England has given an Objective A Achievement Notice, the administrator may comply with a request under sub-paragraph (1)(a) only if satisfied that it will not prejudice the achievement of Objective A, and

(ii)

the FSA must be invited to any meeting under this paragraph.

(g)

In paragraph 57—

(i)

a creditors’ committee can only be established by a creditors’ meeting of which creditors and clients have been both given notice,

(ii)

before the Bank of England has given an Objective A Achievement Notice, the creditors’ committee, when exercising functions, must comply with any directions given to it by the Bank of England,

(iii)

the FSA may appoint a person to attend a meeting of the creditors’ committee and make representations as to any matter for decision,

(iv)

the FSCS shall be appointed as a member of the creditors’ committee unless it indicates to the administrator that it does not wish to be appointed, and

(v)

insolvency rules shall ensure that the make up of the creditors’ committee is a reflection of all parties with an interest in the achievement of the special administration objectives.

(h)

In paragraph 60 (and Schedule 1) the exercise of powers is subject to the need to prioritise Objective A.

(i)

In paragraph 62, the administrator may also call a meeting of clients or contributories.

(j)

In paragraph 68—

(i)

sub-paragraph (1) includes proposals where a court order has been obtained dispensing with the need for approval in accordance with paragraph 8 or 13 of this Schedule 2, and

(ii)

the references to paragraphs 53 and 54 are to paragraphs 7 to 13 of this Schedule.

(k)

In paragraph 73—

(i)

the reference to the administrator’s proposals under paragraph 49 is to the statement of proposals under paragraph 7 of this Schedule, and

(ii)

sub-paragraph (2)(d) is not applied.

(l)

In paragraph 74—

(i)

the FSA may also make an application under sub-paragraph (1) on the grounds that —

(aa)

the administrator is acting or has acted so as unfairly to harm the interests of some or all of the members, creditors or clients, or

(bb)

the administrator is proposing to act in a way which would unfairly harm the interests of some or all of the members, creditors or clients,

(ii)

a client may also make an application under sub-paragraphs (1) and (2), but, until the Bank of England has given an Objective A Achievement Notice, an order may be made on the application of a client only if the court is satisfied that it would not prejudice pursuit of Objective A,

(iii)

where the FSA has given a direction under regulation 16, an order may not be made on an application (by persons other than the Bank of England or the FSA) under this paragraph before the direction is withdrawn if it would impede or prevent compliance with the direction, and

(iv)

any of the following persons may make an application under this paragraph on the grounds that the administrator is not taking any action in response to a request from that person under regulation 13(2) and that the person is of the opinion that the action requested would not lead to a material reduction in the value of the property of the investment bank—

(i)

the Bank of England,

(ii)

the Treasury,

(iii)

the FSA, or

(iv)

a market infrastructure body.

(m)

A client and the FSA are included in the list of those persons who may make an application under paragraph 75(2).

(n)

Paragraph 79 is not applied: see paragraphs 15 and 16 of this Schedule.

(o)

In paragraph 91, after the Bank of England has given an Objective A Achievement Notice, the FSA may make an application to appoint an administrator but the restrictions in sub-paragraph (2) apply.

(p)

Paragraph 96 is not applied.

(q)

In paragraph 98, sub-paragraph (2)(b) is not applied.

(r)

In paragraph 99—

(i)

in sub-paragraph (3), the former administrator’s remuneration and expenses incurred in respect of the pursuit of Objective 1 will be charged on and payable out of client assets, and

(ii)

in sub-paragraph (4)(b), the reference to any charge arising under sub-paragraph (3) does not include a charge on client assets.

(s)

In paragraph 101, the reference to paragraphs 87 to 99 is to paragraphs 87 to 91, 98 and 99.

(t)

In paragraph 103(2), after the Bank of England has given the Objective A Achievement Notice, in sub-paragraph (2)(a), an application to the court under sub-paragraph (1) shall be made by a person listed in regulation 5(1).

(u)

In paragraph 106, sub-paragraphs (2)(a), (2)(b) and (2)(l) to (n) are not applied.

(v)

In paragraph 107, in considering an application the court must have regard to Objective A and the special administration objectives.

(w)

In paragraph 108—

(i)

the references in sub-paragraph (1) are to paragraphs 7 to 13 of this Schedule, and

(ii)

sub-paragraph (3) is not applied.

(x)

In paragraph 111, the definition of “administrator” and sub-paragraph (1A)(b) and (c) are not applied, and the reference in sub-paragraph (1) to paragraph 50 is to paragraph 10 of this Schedule.

Section 145

Table 2: Applied Provisions: other provisions of the Insolvency Act

In Table 2 after subsection (6)—

(a)

In section 135—

(i)

the reference in (e) to section 138(2)(a) is to that section as applied by this paragraph, and

(ii)

the reference in (f) to Objective 2 is to the special administration objectives.

(b)

In section 234—

(i)

subsection (1) is not applied, and

(ii)

“office holder” means the administrator.

(c)

In section 235—

(i)

subsections (1) and (4)(b) to (d) are not applied, and

(ii)

“office holder” means the administrator.

(d)

In section 236—

(i)

subsection (1) is not applied, and

(ii)

“office holder” means the administrator.

(e)

In the application of section 240 to sections 238 and 239—

(i)

in subsection (2)(a), the reference to being unable to pay its debts has the meaning given by regulation 2, and

(ii)

subsections (1)(d) and (3)(b) to (e) are not applied.

(f)

In section 245—

(i)

in subsection (4)(a) the reference to being unable to pay its debts has the meaning given by regulation 2, and

(ii)

subsections (3)(d) and (5)(b) to (d) are not applied.

(g)

In section 246—

(i)

subsection (1) is not applied, and

(ii)

“office holder” means the administrator.

(h)

In section 387, subsections (2)(b), (2A), (3) and (4) to (6) are not applied.

(i)

In section 423, subsection (4) is not applied.

(j)

In section 432, in subsection (4) ignore all the provisions of the Insolvency Act listed there except for sections 206 to 211.

(k)

In section 433, subsection (4) is not applied.

Section 146Status of administrator
Section 147Administrator’s proposalsSection 147 is not applied.
Section 148Sharing information
Section 149Multiple transfers - general application
Section 150Bridge bank to private sector purchaser

In subsection (5), the reference to section 139 is to paragraph 3(2) above.

Section 151Property transfer from bridge bank
Section 157Other processesThe definition of an insolvency power includes regulation 5 (application for a special administration order).

(4) Where a provision of the Insolvency Act is set out in Table 2 in regulation 15(6), but is not applied by section 145 of the Act, that provision also applies to special administration (bank administration) with the modifications specified in that regulation and in sub-paragraph (2).

(1)

The Table in section 145 was amended by section 21 of the Financial Services Act 2010 (c. 28).

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

Opening Options

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

Close

Explanatory Memorandum

Explanatory Memorandum sets out a brief statement of the purpose of a Statutory Instrument and provides information about its policy objective and policy implications. They aim to make the Statutory Instrument accessible to readers who are not legally qualified accompany any Statutory Instrument or Draft Statutory Instrument laid before Parliament from June 2004 onwards.

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 enactedversion 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

Impact Assessments

Impact Assessments generally accompany all UK Government interventions of a regulatory nature that affect the private sector, civil society organisations and public services. They apply regardless of whether the regulation originates from a domestic or international source and can accompany primary (Acts etc) and secondary legislation (SIs). An Impact Assessment allows those with an interest in the policy area to understand:

  • Why the government is proposing to intervene;
  • The main options the government is considering, and which one is preferred;
  • How and to what extent new policies may impact on them; and,
  • The estimated costs and benefits of proposed measures.
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 made 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