Banking Act 2009

234 Regulations: details U.K.

(1) Investment bank insolvency regulations may provide for a procedure to be instituted—

(a) by a court, or

(b) by the action of one or more specified classes of person.

(2) Investment bank insolvency regulations may—

(a) confer functions on persons appointed in accordance with the regulations (which may, in particular, (i) be similar to the functions of a liquidator or administrator under the Insolvency Act 1986, or (ii) involve acting as a trustee of client assets), and

(b) specify objectives to be pursued by a person appointed in accordance with the regulations.

(3) Investment bank insolvency regulations may make the application of a provision depend—

(a) on whether an investment bank is, or is likely to become, unable to pay its debts,

(b) on whether the winding up of an investment bank would be fair, or

(c) partly on those and partly on other considerations.

(4) Investment bank insolvency regulations may make provision about the relationship between a procedure established by the regulations and—

(a) liquidation or administration under the Insolvency Act 1986,

(b) bank insolvency or bank administration under Part 2 or 3 of this Act, and

(c) provision made by or under any other enactment in connection with insolvency.

(5) Regulations by virtue of subsection (4) may, in particular—

(a) include provision for temporary or permanent moratoria;

(b) amend an enactment.

(6) Investment bank insolvency regulations may include provision—

(a) establishing a mechanism for determining which assets are client assets (subject to section 232);

(b) establishing a mechanism for determining that assets are to be, or not to be, treated as client assets (subject to section 232);

(c) about the treatment of client assets;

(d) about the treatment of unsettled transactions (and related collateral);

(e) for the transfer to another financial institution of assets or transactions;

(f) for the creation or enforcement of rights (including rights that take preference over creditors' rights) in respect of client assets or other assets;

(g) indemnifying a person who is exercising or purporting to exercise functions under or by virtue of the regulations;

(h) for recovery of assets transferred in error.

(7) Provision may be included under subsection (6)(f) only to the extent that the Treasury think it necessary having regard to the desirability of protecting both—

(a) client assets, and

(b) creditors' rights.

(8) Investment bank insolvency regulations may confer functions on—

(a) a court or tribunal,

[F1 (b) the Prudential Regulation Authority,

(ba) the Financial Conduct Authority,]

(c) the Financial Services Compensation Scheme (established under Part 15 of the Financial Services and Markets Act 2000),

(d) the scheme manager of that Scheme, and

(e) any other specified person.

(9) Investment bank insolvency regulations may include provision about institutions that are or were group undertakings (within the meaning of section 1161(5) of the Companies Act 2006) of an investment bank.

(10) Investment bank insolvency regulations may replicate or apply, with or without modifications, a power to make procedural rules.

(11) Investment bank insolvency regulations may include provision for assigning or apportioning responsibility for the cost of the application of a procedure established or modified by the regulations.

Textual Amendments

F1 S. 234(8)(b)(ba) substituted for s. 234(8)(b) (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 56 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C1 Ss. 233-236 applied (with modifications) by S.I. 2017/752, reg. 23A, Sch. 3A paras. 2-5 (as inserted (8.12.2020) by The Payment Services and Electronic Money (Amendment) Regulations 2020 (S.I. 2020/1275), regs. 1(2), 6, 7)

C2 Ss. 233-236 applied (with modifications) by S.I. 2011/99, reg. 24A, Sch. 2ZA paras. 2-5 (as inserted (8.12.2020) by The Payment Services and Electronic Money (Amendment) Regulations 2020 (S.I. 2020/1275), regs. 1(2), 3, 4)

Commencement Information

I1 S. 234 in force at 17.2.2009 for specified purposes by S.I. 2009/296, arts. 2, 3, Sch. para. 6

I2 S. 234 in force at 21.2.2009 in so far as not already in force by S.I. 2009/296, arts. 2, 3, Sch. para. 6