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The Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015

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Statutory Instruments

2015 No. 428 (C. 25)

Financial Services And Markets

The Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015

Made

27th February 2015

Laid before Parliament

3rd March 2015

Coming into force

26th March 2015

The Treasury make the following Order in exercise of the powers conferred by sections 145 and 148(5) of the Financial Services (Banking Reform) Act 2013(1).

Citation and commencement

1.  This Order may be cited as the Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015, and comes into force on 26th March 2015.

Appointed day for the coming into force of paragraph 4 of Schedule 9

2.  26th March 2015 is the day appointed for the coming into force of paragraph 4 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (building societies: ability to create floating charges).

Consequential amendments of the Building Societies (Financial Assistance) Order 2010

3.  The Building Societies (Financial Assistance) Order 2010(2) is amended as follows—

(a)omit article 7 (floating charges); and

(b)in article 11 (application of other companies insolvency legislation to building societies)—

(i)in paragraph (5) for “12, 13, 18 and 20” substitute “12 and 13”; and

(ii)in paragraph (8) for “34, 35, 40 and 42” substitute “34 and 35”.

Floating charges (Scotland): application of Part 18 of the Companies Act 1985

4.  Chapters 1 and 3 of Part 18 of the Companies Act 1985(3) (floating charges: Scotland) apply to a building society as they apply to an incorporated company (whether a company within the meaning of that Act or not), but with the modifications set out in Schedule 1.

Floating charges (Scotland): application of the Bankruptcy and Diligence etc. (Scotland) Act 2007

5.—(1) On the day on which section 46 (repeals, savings and transitional arrangements) of the Bankruptcy and Diligence etc. (Scotland) Act 2007(4) (“the 2007 Act”) comes into force—

(a)article 4 of, and Schedule 1 to, this Order cease to have effect to the same extent as Chapters 1 and 3 of Part 18 of the Companies Act 1985 cease to have effect by virtue of section 46 of the 2007 Act; and

(b)paragraph (2) has effect.

(2) Part 2 of the 2007 Act(5) applies to a building society as it applies to an incorporated company, but—

(a)with the modifications set out in Schedule 2; and

(b)in consequence of those modifications, without the modifications in regulation 5 of the Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010(6) (registration of charges: Scotland).

Mark Lancaster

David Evennett

Two of the Lords Commissioners of Her Majesty’s Treasury

27th February 2015

Article 4

SCHEDULE 1Modifications of Part 18 of the Companies Act 1985

1.  The modifications of Chapters 1 and 3 of Part 18 of the Companies Act 1985 referred to in article 4 are as follows.

2.  References to a company or incorporated company include a reference to a building society.

3.  Section 462(7) (power of incorporated company to create floating charge) has effect as if in subsection (5)—

(a)the reference to the Companies Act 1985 were a reference to such provisions of that Act as apply (by virtue of this Order) to a building society; and

(b)the words “and Part III of the Insolvency Act 1986” were omitted.

4.  Section 463(8) (effect of floating charge on winding up) has effect as if—

(a)in subsection (1) for the words “section 247(2) of the Insolvency Act 1986” there were substituted “subsection (1A)”;

(b)after subsection (1) there were inserted—

(1A) For the purposes of this Chapter a building society goes into liquidation if—

(a)it goes into liquidation within the meaning of section 247(2) of the Insolvency Act 1986(9); or

(b)the court makes a building society insolvency order in relation to it under section 94 of the Banking Act 2009(10) (as applied by section 90C of the Building Societies Act 1986(11)) at a time when it has not already gone into liquidation by passing a special resolution for voluntary winding up under section 88 of the Building Societies Act 1986(12).; and

(c)in subsection (3) the words from “derogates” to “or” were omitted.

5.  Section 464(13) (ranking of floating charges) has effect as if—

(a)for paragraphs (b) and (c) of subsection (4) there were substituted—

(b)one floating charge has priority of ranking over another if it was created first.;

(b)subsection (5), and the reference to that subsection in subsection (3), were omitted; and

(c)in subsection (6) the words “Part XII and to” were omitted.

6.  Section 466(14) (alteration of floating charges) has effect as if—

(a)subsections (4) to (4F)(15) were omitted; and

(b)in subsection (6) the words “subsection (4) of” were omitted.

7.  Section 486(16) (interpretation for Part 18 generally) has effect as if in subsection (1)—

(a)in the definition of “ancillary document” paragraph (a) were omitted; and

(b)the definition of “company” were omitted.

Article 5(2)

SCHEDULE 2Modifications of Part 2 of the Bankruptcy and Diligence etc. (Scotland) Act 2007

1.  The modifications of Part 2 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 referred to in article 5(2) are as follows.

2.  References to a company include a reference to a building society.

3.  Section 38 (creation of floating charges) has effect as if for subsections (3) and (3A) there were substituted—

(3) A floating charge is created only when the document granting the floating charge is executed by the building society granting the charge..

4.  Section 39 (advance notice of floating charges) does not apply to building societies.

5.  Section 41 (ranking clauses) has effect as if subsection (5) were omitted.

6.  Section 42 (assignation of floating charges) has effect as if—

(a)in subsection (1) the words “the registration in the Register of Floating Charges of” were omitted; and

(b)subsection (4) were omitted.

7.  Section 43 (alteration of floating charges) has effect as if subsections (3)(b) and (4A) were omitted.

8.  Section 44 (discharge of floating charges) has effect as if—

(a)in subsection (1) the words “the registration in the Register of Floating Charges of” were omitted; and

(b)subsection (4) were omitted.

9.  Section 45 (effect of floating charges on winding up) has effect as if—

(a)subsections (2), (6)(a) and (8) were omitted; and

(b)for subsection (7) there were substituted—

(7) For the purposes of this section a building society goes into liquidation if—

(a)it goes into liquidation within the meaning of section 247(2) of the Insolvency Act 1986; or

(b)the court makes a building society insolvency order in relation to it under section 94 of the Banking Act 2009 (as applied by section 90C of the Building Societies Act 1986) at a time when it has not already gone into liquidation by passing a special resolution for voluntary winding up under section 88 of the Building Societies Act 1986)..

10.  Section 47 (interpretation) has effect as if the definition of “company” were omitted.

EXPLANATORY NOTE

(This note is not part of the Order)

This Order brings into force paragraph 4 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (c. 33) (“the Act”) on 26th March 2015. Paragraph 4 repeals section 9B of the Building Societies Act 1986 (c. 53). This will allow building societies to create floating charges. This is the eighth commencement order to be made under the Act.

Article 3 makes consequential amendments of the Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188).

Article 4 and Schedule 1 apply Part 18 of the Companies Act 1985 (c. 6) to building societies with modifications. Part 18 concerns the creation of floating charges in Scotland and their effect, ranking and alteration.

Article 5(1) provides that article 4 will cease to have effect when Part 18 of the Companies Act 1985 is repealed by section 46 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (“the 2007 Act”). Article 5(2) and Schedule 2 will then have effect to apply Part 2 of the 2007 Act to building societies with modifications. Part 2 of the 2007 Act makes provision for the creation of floating charges in Scotland and their effect, ranking, assignation, alteration and discharge.

An impact assessment of the effect of this Order on the costs of business and the voluntary sector has been prepared and is available on HM Treasury’s website (www.gov.uk/treasury) or from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is annexed to the Explanatory Memorandum for this Order.

NOTE AS TO EARLIER COMMENCEMENT ORDERS

(This note is not part of the Order)

ProvisionDate of CommencementS.I. No.
Section 4 (partially)1st March 20142014/377
Section 61st March 20142014/377
Section 1331st December 20142014/3160
Sections 14 and 151st March 20142014/377
Section 161st April 20142014/377
Section 17 (partially)1st March 20142014/377
Section 17 (so far as not already in force)31st December 20142014/3160
Section 18 (partially)25th July 20142014/1819
Section 1925th July 20142014/1819
Section 20 (partially)25th July 20142014/1819
Sections 27 and 2825th July 20142014/1819
Sections 29 to 31 (partially)25th July 20142014/1819
Section 3325th July 20142014/1819
Section 35 (partially)25th July 20142014/1819
Sections 39 to 581st March 20142014/377
Sections 68 to 1101st March 20142014/377
Section 591st April 20142014/823
Section 60(1), (2), (3) and (7)1st April 20142014/823
Section 60 (so far as not already in force)1st April 20152014/2458
Section 61 (partially)1st November 20142014/2458
Section 61 (so far as not already in force)1st April 20152014/2458
Section 621st April 20152014/2458
Sections 63 to 661st April 20142014/823
Section 67(2) (partially)1st November 20142014/2458
Section 67(3), (4) and (5)1st April 20142014/823
Section 67 (so far as not already in force)1st April 20152014/2458
Section 121(1) (partially)1st March 20142014/377
Section 121(3) (partially)1st March 20142014/377
Section 129 (partially)1st November 20142014/2458
Section 129 (so far as not already in force)1st April 20152014/2458
Section 1301st March 20142014/377
Section 1321st March 20142014/377
Section 133(1) (so far as it inserts section 192JB of the Financial Services and Markets Act 2000)31st December 20142014/3160
Section 133(2)(a)31st December 20142014/3160
Section 1341st March 20142014/377
Section 1351st March 20142014/377
Section 1361st March 20142014/377
Section 1371st March 20142014/377
Section 13921st March 20142014/772
Section 140(1) to (3)21st March 20142014/772
Section 140(4) to (6)21st March 20142014/785
Section 141 (partially)1st March 20142014/377
Section 141 (so far as not already in force)1st April 20142014/377
Schedule 11st March 20142014/377
Schedule 2, paragraph 4 (so far as it inserts section 48P of the Banking Act 2009)1st March 20142014/377
Schedule 2, paragraph 6(8) (so far as it inserts sections 60A and 60B of the Banking Act 2009)1st March 20142014/377
Schedule 2 (so far as not already in force)31st December 20142014/3160
Schedule 3, paragraph 2 (partially)25th July 20142014/1819
Schedule 3, paragraphs 7, 8, 9, 16(b)(i), 17(b)(i), 19(2)(b)(i) and 19(3)(b)(i)25th July 20142014/1819
Schedules 4 and 51st March 20142014/377
Schedule 8, paragraphs 3 and 9 (both partially)1st November 20142014/2458
Schedule 8, paragraphs 4, 5 and 71st November 20142014/2458
Schedule 8 (so far as not already in force)1st April 20152014/2458
Schedule 10, paragraphs 1, 2 and 4 to 91st March 20142014/377
Schedule 10, paragraph 31st April 20142014/377
Schedule 10, paragraph 10 (partially)1st March 20142014/377
Schedule 10, paragraph 10 (so far as not already in force)1st June 20142014/377
(3)

1985 c. 6. Part 18 is repealed, from a day to be appointed, by the Bankruptcy and Diligence (Scotland) Act 2007 (asp 3), section 46(1). Section 46(2) and (3) provides that nothing in Part 2, except sections 40 and 41 so far as they concern the ranking of floating charges subsisting immediately before the coming into force of section 46 (“subsisting charges”), affects the validity or operation of subsisting charges, so that the provisions of Chapters 1 and 3 of Part 18 of the Companies Act 1985 are to be treated as having effect for the purposes of subsisting charges despite the repeal of those Chapters.

(5)

Part 2 has been amended, before being brought into force, by the Banking Act 2009 (c. 1), section 253; and by S.I. 2009/1941 and 2010/2993.

(7)

Section 462 was amended by the Companies Act 1989 (c. 40), section 130(7) and Schedule 17, paragraph 8; by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40), section 74, Schedule 8, paragraph 33(6) and Schedule 9; by the Requirements of Writing (Scotland) Act 1995 (c. 7), section 14(2) and Schedule 5; and by the Insolvency Act 1986 (c. 45), section 439(1) and Schedule 13.

(8)

Section 463 was amended by the Companies Act 1989, section 140(1); and by the Insolvency Act 1986, sections 438 and 439(1) and Schedules 12 and 13.

(10)

2009 c. 1.

(11)

1986 c. 53. Section 90C was inserted by S.I. 2009/805.

(12)

Section 88 was amended by S.I. 2001/2617 and 2013/496.

(13)

Section 464 was amended by the Companies Act 1989, section 140(2) to (7); and by the Insolvency Act 1986, section 439(1) and Schedule 13.

(14)

Section 466 was amended by the Companies Act 1989, sections 130(7), 140(8) and 212, Schedule 17, paragraph 9 and Schedule 24; and by S.I. 2013/600.

(15)

Subsections (4A) to (4F) of section 466 were inserted, and subsection (5) was repealed, by S.I. 2013/600.

(16)

Section 486 was amended by the Insolvency Act 1986, section 438 and Schedule 12.

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