Financial Services (Banking Reform) Act 2013

Introductory

111 Financial market infrastructure administration

This Part—

(a) provides for a procedure to be known as FMI administration, and

(b) restricts the powers of persons other than the Bank of England in relation to the insolvency of infrastructure companies.

112 Interpretation: infrastructure companies

(1) In this Part “infrastructure company” has the meaning given by this section.

(2) “Infrastructure company” means a company which is—

(a) the operator of a recognised inter-bank payment system, other than an operator excluded by subsection (3),

(b) approved under regulations under section 785 of the Companies Act 2006 (provision enabling procedures for evidencing and transferring title) as the operator of a securities settlement system, or

(c) a company designated by the Treasury under subsection (4).

(3) But a company is not an infrastructure company if it is a recognised central counterparty, as defined by section 285 of FSMA 2000.

(4) The Treasury may by order designate a company for the purposes of subsection (2)(c) if—

(a) the company provides services to a person falling within subsection (2)(a) or (b), and

(b) the Treasury are satisfied that an interruption in the provision of those services would have a serious adverse effect on the effective operation of the recognised inter-bank payment system or securities settlement system in question.

(5) An order under subsection (4) must specify the recognised inter-bank payment system or securities settlement system in connection with which the company is designated.

(6) Before designating a company under subsection (4), the Treasury must consult—

(a) the company to be designated,

(b) the person within subsection (2)(a) or (b) to whom the company provides services,

(c) the Bank of England,

(d) if the company is a PRA-authorised person, the PRA and the FCA, and

(e) if the company is an authorised person other than a PRA-authorised person, the FCA.

113 Interpretation: other expressions

(1) In this Part—

• “company” means a company registered under the Companies Act 2006;

• “operator”, in relation to a recognised inter-bank payment system, is to be read in accordance with section 183 of the Banking Act 2009;

• “recognised inter-bank payment system” means an inter-bank payment system, as defined by section 182 of the Banking Act 2009, in respect of which a recognition order under section 184 of that Act is in force;

• “the relevant system” means—

  (a)

  in relation to an infrastructure company falling within subsection (2)(a) of section 112, the recognised inter-bank payment system,

  (b)

  in relation to an infrastructure company falling within subsection (2)(b) of that section, the securities settlement system,

  (c)

  in relation to a company designated under subsection (4) of that section, the recognised inter-bank payment system or securities settlement system falling within paragraph (b) of that subsection;

• “securities settlement system” means a computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters.

(2) Expressions used in the definition of “securities settlement system” in subsection (1) are to be read in accordance with section 783 of the Companies Act 2006.