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The Bank Administration Rules (Northern Ireland) 2009

Type Ni-Statutory-Rule

Publication 2009-02-18

State In force

Jurisdiction Northern Ireland

Department Government Printer for Northern Ireland

Source legislation.gov.uk

Reform history JSON API PDF

Made: 18th February 2009

To be laid before Parliament

Coming into operation: 25th February 2009

The Lord Chancellor has not consulted the Committee existing for the purposes of Article 360 of the Order: this is the first exercise of the power in Article 359 of that Order, as amended by section 160 of the 2009 Act, and is therefore excluded from the requirement to consult by section 160(6) of the 2009 Act.

PART 1 — Introduction

Citation

1

These Rules may be cited as the Bank Administration Rules (Northern Ireland) 2009.

Commencement

2

These Rules come into operation on 25th February 2009.

Extent

3

These Rules extend to Northern Ireland only.

Interpretation

4

The following expressions used in these Rules take their meaning from the Banking Act 2009 —

“bank” (s. 2),

“bank administration” (s. 141(4)(a)),

“bank administration order” (s. 141(1)),

“bank administrator” (s. 141(1)),

“Bank of England” (s. 256B(1)),

“the court” (the High Court – s. 166(1)),

“Objective 1” (support for commercial purchaser or bridge bank – ss. 137 & 138),

“Objective 1 Achievement Notice” (s. 139(4)),

“Objective 2” (normal administration – ss. 137 & 140),

“residual bank” (s. 136(2)), and

“resolution fund order” (s. 49(3)).

5

In these Rules—

(a) “the FSCS” means the Financial Services Compensation Scheme (established under Part 15 of the Financial Services and Markets Act 2000[^f00003]) or, where appropriate, the scheme manager of that scheme;

(aa) “the appropriate regulator” in relation to a bank means—

(i) if the bank is a PRA-authorised person (within the meaning of the Financial Services and Markets Act 2000), the Prudential Regulation Authority and the Financial Conduct Authority;

(ii) in any other case, the Financial Conduct Authority;

(b) “the Objective 1 Stage” means the period during which a bank administration order is in force before the Bank of England gives an Objective 1 Achievement Notice; and

(c) “the Objective 2 Stage” means the period during which a bank administration order is in force after the Bank of England gives an Objective 1 Achievement Notice;

(d) A reference to personal service is a reference to personal service in accordance with Order 65 of the Supreme Court Rules (service of documents); and

(e) A reference to a witness statement (including a reference implied by the application of an enactment) is a reference to a witness statement verified by a statement of truth.

Overview

6

The purpose of these Rules is to prescribe a procedure for the appointment of a bank administrator, and the operation of bank administration, under Part 3 of the 2009 Act in Northern Ireland.

Forms

7

(1) This Rule applies where a provision of these Rules—

(a) applies a provision of the Insolvency Rules (Northern Ireland) 1991 (“the 1991 Rules”)[^f00004] which requires the use of a prescribed form, or

(b) makes provision similar to that made by a provision of those Rules which requires the use of a prescribed form.

(2) The form prescribed for the purposes of those Rules is to be used with any modification that the person using the form thinks desirable to reflect the nature of bank administration (whether or not the modification is set out in a Practice Form issued by the Treasury for that purpose).

PART 2 — Application for Bank Administration Order

Introduction

8

This Part makes specific provision for a number of aspects of applications for bank administration orders; Part 5 applies a number of provisions of the 1991 Rules to applications for bank administration orders (with specified modifications).

Content of application

9

An application by the Bank of England for a bank administration order in respect of a bank must specify—

(a) the full name of the bank,

(b) any other trading names,

(d) an e-mail address for the bank,

(e) the address of the Bank of England, and

(f) the identity of the person (or persons) nominated for appointment as bank administrator.

10

If the bank has notified the Bank of England of an address for service which is, because of special circumstances, to be used in place of the registered office, that address shall be specified under Rule 9(c).

Statement of proposed bank administrator

11

An application must be accompanied by a statement by the proposed bank administrator—

(a) specifying the name and address of the person (or of each person) proposed to be appointed;

(b) giving that person’s (or each person’s) consent to act;

(d) giving details of any prior professional relationship that the person (or any of them) has had with the bank.

Bank of England witness statement

12

An application for a bank administration order in respect of a bank must be accompanied by a witness statement sworn on behalf of the Bank of England—

(a) certifying that the conditions for applying for a bank administration order, set out in section 143 of the 2009 Act, are met in respect of the bank;

(b) stating the bank’s current financial position to the best of the Bank of England’s knowledge and belief (including actual, contingent and prospective assets and liabilities);

(d) specifying whether any security confers power to appoint an administrator under paragraph 15 of Schedule B1 to the Order (holder of qualifying floating charge) or an administrative receiver (and whether an administrative receiver has been appointed);

(e) specifying any insolvency proceedings which have been instituted in respect of the bank (including any process notified to the Financial Conduct Authority or the Prudential Regulation Authority under section 120 of the 2009 Act);

(f) giving details of the property transfer instrument which the Bank of England has made or intends to make in respect of the bank;

(g) where the property transfer instrument has not yet been made, explaining what effect it is likely to have on the bank’s financial position;

(h) specifying how functions are to be apportioned where more than one person is to be appointed as bank administrator (stating, in particular, whether functions are to be exercisable jointly or concurrently); and

(i) including any other material which the Bank of England thinks may help the court to decide whether to make the bank administration order.

Filing

13

The application, and its accompanying documents, must be filed with the court, together with enough copies of the application and accompanying documents for service under Rule 15.

14

Each filed copy—

(a) shall have the seal of the court applied to it;

(b) shall be endorsed with the date and time of filing;

(d) shall be issued to the Bank of England.

Service

15

The Bank of England shall serve the application—

(a) on the bank;

(b) on the person (or each of the persons) nominated for appointment as bank administrator;

(c) on any person whom the Bank of England knows to be entitled to appoint an administrator under paragraph 15 of Schedule B1 to the Order or an administrative receiver;

(d) on any person who has given notice to the Financial Conduct Authority or the Prudential Regulation Authority in respect of the bank under section 120 of the 2009 Act (bank insolvency: notice of preliminary steps of other insolvency procedures); and

(e) if the property transfer instrument was made or is to be made under section 11(2)(b) of the 2009 Act (transfer to commercial purchaser), on each transferee.

16

Service under rule 15 shall be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 14.

17

Service must be effected as soon as is reasonably practicable, having regard in particular to the need to give the bank’s representatives a reasonable opportunity to attend the hearing.

18

(1) Service must be effected—

(a) by personal service to an address that the person has notified to the Bank of England as an address for service;

(b) by personal service to the person’s registered office (where no address for service has been notified);

(c) by personal service to the person’s usual or last known principal place of business in Northern Ireland (where there is no registered office and no address for service has been notified); or

(d) in such other manner and at such a place as the court may direct.

(2) If the Bank of England knows of an email address that is habitually used for business purposes by a person on whom service is required, the Bank must (in addition to service by hand) as soon as is reasonably practicable send by email an electronic copy of a sealed and endorsed copy of the application and its accompanying documents.

19

(1) Service of the application shall be verified by a witness statement specifying the date on which, and the manner in which, service was effected.

(2) The witness statement, with a sealed copy of the application attached to it, shall be filed with the court—

(a) as soon as is reasonably practicable, and

(b) in any event, before the hearing of the application.

Other notification

20

As soon as is reasonably practicable after filing the application the Bank of England must notify—

(a) any enforcement officer or other officer whom the Bank of England knows to be charged with effecting an execution or other legal process against the bank or its property;

(b) any person whom the Bank of England knows to have distrained against the bank or its property; and

Venue

21

(1) The court shall fix the venue for the hearing when the application is filed.

(2) In fixing the venue the court shall have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable; and

(b) the need for the bank’s representatives to be able to reach the venue in time for the hearing.

Hearing

22

At the hearing of the application, any of the following may appear or be represented—

(a) the Bank of England,

(b) the appropriate regulator,

(d) a director of the bank,

(e) the person (or a person) nominated for appointment as bank administrator,

(f) any person who has given notice to the Financial Conduct Authority or the Prudential Regulation Authority in respect of the bank under section 120 of the 2009 Act (bank insolvency: notice of preliminary steps of other insolvency procedures), and

(g) with the permission of the court, any other person who appears to have an interest.

The order

23

A bank administration order must be in Form 2.04B as specified in Rule 2.012(2) of the 1991 Rules.

Notice of order

24

If the court makes a bank administration order, it shall send four or, if the bank is a PRA-authorised person (within the meaning of the Financial Services and Markets Act 2000), five sealed copies to the Bank of England.

25

The Bank of England shall as soon as is reasonably practicable send—

(a) one sealed copy to the bank administrator;

(b) one sealed copy to the appropriate regulator; and

Costs

26

If the court makes a bank administration order, the following are payable as an expense of the bank administration—

(a) the Bank of England’s costs of making the application; and

(b) any other costs allowed by the court.

PART 3 — Process of Bank Administration

Introduction

27

This Part makes specific provision for a number of aspects of bank administration; Part 5 applies a number of provisions of the 1991 Rules to bank administration (with specified modifications).

Bank administrator’s proposals: Objective 1 Stage

28

(1) This Rule makes provision about the statement of proposals which the bank administrator is required to make in the Objective 1 Stage under section 147 of the 2009 Act.

(2) In addition to the information required by section 147 the statement must include—

(a) details of the court where the proceedings are and the court reference number;

(b) the full name, any other trading names, the registered address and registered number of the bank;

(d) in the case of joint bank administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the bank and details of any shareholdings in the bank they have;

(f) an account of the circumstances giving rise to the application for the appointment of the bank administrator;

(g) if a statement of the bank’s affairs has been submitted, a copy or summary of it with the bank administrator’s comments, if any;

(h) if an order limiting the disclosure of the statement of affairs has been made under Rule 2.033 of the 1991 Rules (as applied by Rule 58), a statement of that fact, as well as—

(i) details of who provided the statement of affairs,

(ii) the date of the order for limited disclosure,

(iii) the details or a summary of the details that are not subject to that order,

(i) if a full statement of affairs is not provided, the names, addresses and debts of the creditors including details of any security held (or, in the case of depositors, a single statement of their aggregate debt);

(j) if no statement of affairs has been submitted, details of the financial position of the bank at the latest practicable date (which shall, unless the court otherwise orders, be a date not earlier than that on which the bank entered bank administration), a list of the bank’s creditors including their names, addresses and details of their debts, including any security held, and an explanation as to why there is no statement of affairs;

(k) the basis upon which it is proposed that the bank administrator’s remuneration should be fixed under Rule 2.107 of the 1991 Rules (as applied by Rule 58);

(l) how the bank administrator proposes to pursue Objective 1;

(m) whether the bank administrator proposes to pursue Objective 2(a) or Objective 2(b);

(n) if the bank administrator proposes to pursue Objective 2(a), how it is envisaged the purpose of the bank administration will be achieved in the Objective 2 Stage;

(o) if the bank administrator proposes to pursue Objective 2(b)—

(i) how it is envisaged the purpose of the bank administration will be achieved in the Objective 2 Stage, and

(ii) how it is proposed that the bank administration shall end (winding-up or voluntary arrangement, in accordance with section 154 of the 2009 Act);

(p) the manner in which the affairs and business of the bank have been managed and financed since the date of the bank administrator’s appointment (including the reasons for and terms of any disposal of assets);

(q) the manner in which the affairs and business of the bank will be managed and financed if the bank administrator’s proposals are approved.

(3) The statement—

(a) may exclude information, the disclosure of which could seriously prejudice the commercial interests of the bank; and

(b) shall include a statement of any exclusion.

Bank administrator’s proposals: Objective 2 Stage

29

(1) This Rule makes provision about the statement of proposals which the bank administrator is required to make under paragraph 50 of Schedule B1 to the Order as it applies during the Objective 2 Stage (in accordance with Table 1 in section 145(6) of the 2009 Act).

(2) The statement must include—

(a) details of the court where the proceedings are and the court reference number;

(b) the full name, any other trading names, the registered address and registered number of the bank;

(d) in the case of joint bank administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the bank and details of any shareholdings in the bank they have;

(f) an account of the circumstances giving rise to the application for the appointment of the bank administrator;

(g) if a statement of the bank’s affairs has been submitted, a copy or summary of it with the bank administrator’s comments, if any;

(h) if an order limiting the disclosure of the statement of affairs has been made under Rule 2.033 of the 1991 Rules (as applied by Rule 58), a statement of that fact, as well as—

(i) details of who provided the statement of affairs,

(ii) the date of the order for limited disclosure,

(iii) the details or a summary of the details that are not subject to that order;

(i) if a full statement of affairs is not provided, the names, addresses and debts of the creditors including details of any security held (or, in the case of depositors, a single statement of their aggregate debt);

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