Legalize / United Kingdom / Public General Act

Banking Act 2009

Type Public General Act

Publication 2009-02-12

Last updated 2026-01-19

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) amounts required for the repayment of loans from public funds or for other payments in respect of public financial assistance;

(b) some or all of the administrative or other expenses incurred in connection with the provisions of this Part.

(2A) In subsection (2), “public financial assistance” includes any amount in respect of which the Bank of England may require a recapitalisation payment under section 214E of the Financial Services and Markets Act 2000.

(3) A resolution fund order may include provision for—

(a) an independent valuer to make a determination under the order (in which case sections 54(2) to (5), 55 and 56 shall apply);

(b) valuation principles to be applied in making a determination (in which case section 57(2) shall apply).

(4) A resolution fund order may confer a discretionary function on—

(a) a Minister of the Crown,

(b) the Treasury,

(d) any other specified person.

(5) A resolution fund order may include provision for the determination of disputes about the application of its provisions (whether by conferring jurisdiction on a court or tribunal or otherwise).

(6) A resolution fund order may require the Bank of England in managing a resolution company to aim to maximise the proceeds available for distribution in accordance with the order; and an order which includes a requirement must—

(a) specify its extent, and

(b) include provision about how the Bank is to comply with it.

(7) A resolution fund order may require the Treasury to ensure that a bank in temporary public ownership in accordance with section 13(2) is managed with the aim of maximising the proceeds available for distribution in accordance with the order; and an order which includes a requirement must—

(a) specify its extent, and

(b) include provision about how the Treasury is to comply with it.

(8) A requirement under subsection (6) or (7) is to be complied with only in so far as is compatible with—

(a) pursuit of the special resolution objectives, and

(b) compliance with the code of practice under section 5.

Third party compensation: discretionary provision

59

(1) A power or duty in this Part to make a third party compensation order is a power or duty to make provision establishing a scheme for paying compensation to persons other than a transferor.

(2) A third party compensation order may—

(a) form part of a compensation scheme order or resolution fund order, or

(b) be a separate order.

(3) A third party compensation order may include provision for—

(a) an independent valuer (in which case sections 54 to 56 shall apply);

(b) valuation principles (in which case section 57(2) to (5) shall apply).

Third party compensation: mandatory provision

60

(1) The Treasury may make regulations about third party compensation arrangements in the case of partial property transfers.

(2) In making regulations the Treasury shall, in particular, have regard to the desirability of ensuring that if a residual bank enters insolvency after transfer, pre-transfer shareholders or creditors do not receive less favourable treatment than they would have received had it entered insolvency immediately before transfer.

(3) In subsection (2)—

(a) “residual bank” means a bank that is a transferor under a property transfer instrument,

(b) “pre-transfer shareholder or creditor” means a person who—

(i) holds securities issued by, or is a creditor of, a residual bank immediately before a property transfer instrument takes effect, and

(ii) satisfies conditions specified by the regulations, and

(c) the reference to insolvency includes a reference to (i) liquidation, (ii) bank insolvency, (iii) administration, (iv) bank administration, (v) receivership, (vi) a composition with creditors, and (vii) a scheme of arrangement.

(4) The regulations may—

(a) require a compensation scheme order or a resolution fund order to include a third party compensation order;

(b) require a third party compensation order to include provision of a specified kind or to specified effect;

(c) make provision which is to be treated as forming part of a third party compensation order (whether (i) generally, (ii) only if applied, (iii) unless disapplied, or (iv) subject to express modification).

(5) Regulations may provide for whether compensation is to be paid, and if so what amount is to be paid, to be determined by reference to any factors or combination of factors; in particular, the regulations may provide for entitlement—

(a) to depend in part upon the amounts which are or may be payable under a resolution fund order;

(b) to be contingent upon the occurrence or non-occurrence of specified events;

(c) to be determined wholly or partly by an independent valuer (within the meaning of sections 54 to 56) appointed in accordance with a compensation scheme order or resolution fund order.

(6) Regulations may make provision about payment including, in particular, provision for payments—

(a) on account subject to terms and conditions;

(b) by instalment.

(7) Regulations—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Sources of compensation

61

(1) This section applies to—

(a) compensation scheme orders,

(b) resolution fund orders,

(ca) bail-in compensation orders,

(d) regulations under section 60, and

(e) regulations under section 60A.

(2) An order or regulations may provide for compensation or other payments to be made by—

(a) the Treasury,

(b) the Financial Services Compensation Scheme, subject to section 214C of the Financial Services and Markets Act 2000 (limit on amount of special resolution regime payments), or

Procedure

62

(1) This section applies to—

(a) compensation scheme orders,

(b) resolution fund orders, ...

(ba) bail-in compensation orders, and

(2) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Incidental functions

General continuity obligation: property transfers

63

(1) In this section and section 64—

(a) “residual bank” means a bank all or part of whose business has been transferred in accordance with section 11(2)(b), 12(2) , 12ZA(3) , 41A(2) or 44D(2) ,

(b) “group company” means anything which is, or was immediately before the transfer, a group undertaking in relation to a residual bank,

(d) “the transferred business” means the part of the bank's business that has been transferred, and

(e) “transferee” means a commercial purchaser or resolution company to whom all or part of the transferred business has been transferred.

(1A) In this section a reference to insolvency includes a reference to (i) liquidation, (ii) bank insolvency, (iii) administration, (iv) bank administration, (v) receivership, (vi) composition with creditors and (vii) a scheme of arrangement.

(2) The residual bank and each group company must provide such services and facilities as are required to enable a transferee to operate the transferred business, or part of it, effectively.

(3) The duty under subsection (2) (the “continuity obligation”) may be enforced as if created by contract between the residual bank or group company and the transferee.

(3A) The continuity obligation continues to apply despite the residual bank or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.

(4) The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration.

(4A) But if the services and facilities provided in pursuance of the continuity obligation were provided to the bank whose business has been transferred, under an agreement with that bank, before the property transfer instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and subsection (4) does not apply).

(5) The continuity obligation is not limited to the provision of services or facilities directly to a transferee.

(6) The Bank of England may, with the consent of the Treasury, by notice to the residual bank or a group company state that in the Bank's opinion—

(a) specified activities are required to be undertaken in accordance with the continuity obligation;

(b) activities are required be undertaken in accordance with the continuity obligation on specified terms.

(7) A notice under subsection (6) shall be determinative of the nature and extent of the continuity obligation as from the time when the notice is given.

Special continuity obligations: property transfers

64

(1) Expressions in this section have the same meaning as in section 63.

(2) The Bank of England may—

(a) cancel a contract or other arrangement between the residual bank and a third party (whether or not rights or obligations under it have been transferred to a transferee);

(b) modify the terms of a contract or other arrangement between the residual bank and a third party (whether or not rights or obligations under it have been transferred to a transferee);

(c) add or substitute a transferee as a party to a contract or other arrangement between the residual bank and a third party;

(d) confer and impose rights and obligations on a group company and a transferee, which shall have effect as if created by contract between them;

(e) confer and impose rights and obligations on the residual bank and a transferee which shall have effect as if created by contract between them.

(3) In modifying or setting terms under subsection (2) the Bank of England shall aim, so far as is reasonably practicable, to preserve or include—

(a) provision for reasonable consideration, and

(b) any other provision that would be expected in arrangements concluded between parties dealing at arm's length.

(4) The power under subsection (2) must be exercised by way of provision in a property transfer instrument (or supplemental instrument).

(5) The power in subsection (2)(d) and (e) may be exercised only—

(a) in so far as the Bank of England thinks it necessary to do so to ensure the provision of such services and facilities as are required to enable the transferee to operate the transferred business, or part of it, effectively, and

(b) with the consent of the Treasury.

(6) An obligation imposed on the residual bank or a group company under subsection (2)(d) or (e) continues to apply despite the residual bank or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.

(7) For the purposes of subsection (2), “third party” includes a group company.

Continuity obligations: onward property transfers

65

(1) In this section—

(a) “onward transfer” means a transfer of property, rights or liabilities (whether or not under a power in this Part) from—

(i) a person who is a transferee under a property transfer instrument under section 12(2) or 12ZA(3) (an “original transferee”), or

(ii) a bank, securities issued by which were earlier transferred by a share transfer instrument under section 12(2) or a share transfer order under section 13(2), and

(b) the person to whom the onward transfer is made is referred to as an “onward transferee”.

(2) The continuity authority may—

(a) provide for an obligation under section 63 to apply in respect of an onward transferee;

(b) extend section 64 so as to permit action to be taken under section 64(2) for the purpose of enabling an onward transferee to operate transferred business, or part of it, effectively.

(3) “The continuity authority” means—

(a) the Bank of England, where subsection (1)(a)(i) applies, and

(b) the Treasury, where subsection (1)(a)(ii) applies.

(4) Subsection (2) may be relied on to impose obligations on—

(a) an original transferee (where the original transfer was a property transfer),

(b) a residual bank within the meaning of section 63 (where the original transfer was a property transfer),

(d) anything which is or was a group undertaking (within the meaning of section 1161(5) of the Companies Act 2006) of anything within paragraphs (a) to (c), or

(e) any combination.

(5) Subsection (2) may be used to impose obligations—

(a) in addition to obligations under or by virtue of section 63 or 64, or

(b) replacing obligations under or by virtue of either of those sections to a specified extent.

(6) A power under subsection (2) is exerciseable by giving a notice to each person—

(a) on whom a continuity obligation is to be imposed under the power, or

(b) who is expected to benefit from a continuity obligation under the power.

(7) Sections 63(3) to (7) and 64(3) and (4) apply to an obligation as applied under subsection (2)—

(a) construing “transferred business” as the business transferred by means of the onward transfer, and

(b) with any other necessary modification.

(8) The Bank of England may act under or by virtue of subsection (2) only with the consent of the Treasury.

66

(1) In this section and section 67—

(a) “transferred bank” means a bank all or part of the ownership of which has been transferred in accordance with section 11(2)(a), 12(2)(a) or 13(2), or which falls within subsection (1A),

(b) “former group company” means anything which was a group undertaking in relation to the transferred bank immediately before the transfer (whether or not it is also a group undertaking in relation to the transferred bank immediately after the transfer),

(d) “the continuity authority” means—

(i) the Bank of England, where ownership was transferred in accordance with section 11(2)(a), 12(2)(a), or in a case falling within subsection (1A), and

(ii) the Treasury, where ownership was transferred in accordance with section 13(2).

(1ZA) In this section a reference to insolvency includes a reference to (i) liquidation, (ii) bank insolvency, (iii) administration, (iv) bank administration, (v) receivership, (vi) composition with creditors and (vii) a scheme of arrangement.

(1A) A bank falls within this subsection if a mandatory reduction instrument or resolution instrument (or supplemental resolution instrument) has changed the ownership of the bank (wholly or partly) by providing for the transfer, cancellation or conversion from one form or class to another of securities issued by the bank (and the reference in subsection (1)(b) to “the transfer” includes such a cancellation or conversion).

(2) Each former group company must provide such services and facilities as are required to enable the transferred bank to operate effectively.

(3) The duty under subsection (2) (the “continuity obligation”) may be enforced as if created by contract between the transferred bank and the former group company.

(3A) The continuity obligation continues to apply despite the former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.

(4) The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration.

(4A) But if the services and facilities provided in pursuance of the continuity obligation were provided to the transferred bank, under an agreement with that bank, before the share transfer instrument or order or the resolution instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and subsection (4) does not apply).

(5) The continuity obligation is not limited to the provision of services or facilities directly to the transferred bank.

(6) The continuity authority may by notice to a former group company state that in the authority's opinion—

(a) specified activities are required to be undertaken in accordance with the continuity obligation;

(b) activities are required be undertaken in accordance with the continuity obligation on specified terms.

(7) A notice under subsection (6) shall be determinative of the nature and extent of the continuity obligation as from the time when the notice is given.

(8) The Bank of England may act under or by virtue of subsection (6) only with the consent of the Treasury.

67

(1) Expressions in this section have the same meaning as in section 66.

(2) The continuity authority may—

(a) cancel a contract or other arrangement between the transferred bank and a third party;

(b) modify the terms of a contract or other arrangement between the transferred bank and a third party;

(c) confer and impose rights and obligations on a former group company and the transferred bank, which shall have effect as if created by contract between them.

(3) In modifying or setting terms under subsection (2) the continuity authority shall aim, so far as is reasonably practicable, to preserve or include—

(a) provision for reasonable consideration, and

(b) any other provision that would be expected in arrangements concluded between parties dealing at arm's length.

(4) The power under subsection (2) must be exercised by way of provision in a share transfer instrument or order or resolution instrument (or supplemental instrument or order).

(5) The power in subsection (2)(c) may be exercised—

(a) only in so far as the continuity authority thinks it necessary to do so to ensure the provision of such services and facilities as are required to enable the transferred bank to operate effectively, and

(b) by the Bank of England only with the consent of the Treasury.

(6) An obligation imposed on the transferred bank or a former group company under subsection (2)(b) or (c) continues to apply despite the transferred bank or former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(2) of the Insolvency (Northern Ireland) Order 1989.

68

(1) In this section “onward transfer” means a transfer (whether or not under a power in this Part) of securities issued by a bank where—

(a) securities issued by the bank were earlier transferred by a share transfer instrument under section 12(2), a resolution instrument under section 12A(2) or supplemental resolution instrument under section 48U(2) or a share transfer order under section 13(2), or

(b) the bank was the transferee under a property transfer instrument under section 12(2).

(2) The continuity authority may—

(a) provide for an obligation under section 66 to apply in respect of the bank after the onward transfer;

(b) extend section 67 so as to permit action to be taken under section 67(2) to enable the bank to operate effectively after the onward transfer.

(3) In this section “continuity authority” has the same meaning as in sections 66 and 67.

(4) Subsection (2) may be relied on to impose obligations on—

(a) the bank,

(b) anything which is or was a group undertaking (within the meaning of section 1161(5) of the Companies Act 2006) of the bank,

(d) any combination.

(5) Subsection (2) may be used to impose obligations—

(a) in addition to obligations under or by virtue of section 66 or 67, or

(b) replacing obligations under or by virtue of either of those sections to a specified extent.

(6) A power under subsection (2) is exerciseable by giving a notice to each person—

(a) on whom a continuity obligation is to be imposed under the power, or

(b) who is expected to benefit from a continuity obligation under the power.

(7) Sections 66(3) to (7) and 67(3) and (4) apply to an obligation as applied under subsection (2) with any necessary modification.

(8) The Bank of England may act under or by virtue of subsection (2) only with the consent of the Treasury.

Continuity obligations: consideration and terms

69

(1) The Treasury may by order specify matters which are to be or not to be considered in determining—

(a) what amounts to reasonable consideration for the purpose of sections 63 to 68;

(b) what provisions to include in accordance with section 64(3)(b) or 67(3)(b).

(2) An order—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) A continuity authority may give guarantees or indemnities in respect of consideration for services or facilities provided or to be provided in pursuance of a continuity obligation.

(4) In this section “continuity authority”—

(a) in relation to sections 63 and 64, means the Bank of England, and

(b) in relation to sections 65 to 68, has the same meaning as in those sections.

Continuity obligations: termination

70

(1) The continuity authority may by notice terminate an obligation arising under section 63 or 66.

(2) The power under subsection (1) is exerciseable by giving a notice to each person—

(a) on whom the obligation is imposed, or

(b) who has benefited or might have expected to benefit from the obligation.

(3) In this section “continuity authority”—

(a) in relation to section 63, means the Bank of England, and

(b) in relation to section 66, has the same meaning as in that section.

(4) A reference in subsection (1) to obligations under a section includes a reference to obligations under that section as applied under section 65 or 68.

Pensions

71

(1) This section applies to—

(za) mandatory reduction instruments,

(a) share transfer orders,

(b) share transfer instruments, ...

(d) resolution instruments.

(2) An order or instrument may make provision—

(a) about the consequences of a transfer for a pension scheme;

(b) about property, rights and liabilities of any pension scheme of the bank.

(3) In particular, an order or instrument may—

(a) modify any rights and liabilities;

(b) apportion rights and liabilities;

(4) Provision by virtue of this section may (but need not) amend the terms of a pension scheme.

(5) A share or property transfer instrument may make provision in reliance on this section only with the consent of the Treasury.

(6) In this section—

(a) “pension scheme” includes any arrangement for the payment of pensions, allowances and gratuities, and

(b) a reference to a pension scheme of a bank is a reference to a scheme in respect of which the bank, or a group company of the bank, is or was an employer.

(7) In subsection (6)(b) the reference to a group company of the bank is a reference to anything that is or was a group undertaking in relation to the bank within the meaning given by section 1161(5) of the Companies Act 2006.

Enforcement

72

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disputes

73

(1) This section applies to—

(za) mandatory reduction instruments,

(a) share transfer orders,

(b) share transfer instruments, ...

(d) resolution instruments, and

(e) third-country instruments.

(2) An order or instrument may include provision for disputes to be determined in a specified manner.

(3) Provision by virtue of subsection (2) may, in particular—

(a) confer jurisdiction on a court or tribunal;

(b) confer discretion on a specified person.

Tax

74

(1) The Treasury may by regulations make provision about the fiscal consequences of the exercise of the power to make a mandatory reduction instrument or a stabilisation power.

(2) Regulations may relate to—

(a) capital gains tax;

(b) corporation tax;

(d) inheritance tax;

(e) stamp duty;

(f) stamp duty land tax;

(g) stamp duty reserve tax.

(3) Regulations may apply to—

(a) anything done in connection with an instrument or order;

(b) things transferred or otherwise affected by virtue of an instrument or order;

(d) persons otherwise affected by an instrument or order.

(4) Regulations may—

(a) modify or disapply an enactment;

(b) provide for an action to have or not have specified consequences;

(c) provide for specified classes of property (including securities), rights or liabilities to be treated, or not treated, in a specified way;

(d) withdraw or restrict a relief;

(e) extend, restrict or otherwise modify a charge to tax;

(f) provide for matters to be determined by the Treasury in accordance with provision made by or in accordance with the regulations.

(5) Regulations may make provision for the fiscal consequences of the exercise of the power to make a mandatory reduction instrument or a stabilisation power in respect of things done—

(a) during the period of three months before the date on which the power to make the mandatory reduction instrument or (as the case may be) the stabilisation power is exercised, or

(b) on or after that date.

(5A) Where the mandatory reduction provision required by section 6B is made in two or more mandatory reduction instruments, in subsection (5)(a) above the reference to the date on which the power to make the mandatory reduction instrument is exercised is, in relation to any of those instruments, a reference to the date on which the power is exercised to make the first of those instruments.

(6) In relation to the exercise of a supplemental or onward instrument or order under section 26, 27, 28, 30, 42, 43, 45, 48U or 48V, in subsection (5)(a) above “the stabilisation power” is a reference to the first stabilisation power in connection with which the supplemental or onward instrument or order is made.

(7) The Treasury may by order amend subsection (2) so as to—

(a) add an entry, or

(b) remove an entry.

(8) Regulations or an order under this section—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.

Power to change law

75

(1) The Treasury may by order amend the law for the purpose of enabling the powers under this Part to be used effectively, having regard to the special resolution objectives.

(2) An order may be made—

(a) for the general purpose of the exercise of powers under this Part,

(b) to facilitate a particular proposed or possible use of a power, or

(3) An order under subsection (2)(c) may make provision which has retrospective effect in so far as the Treasury consider it necessary or desirable for giving effect to the particular exercise of a power under this Act in connection with which the order is made (but in relying on this subsection the Treasury shall have regard to the fact that it is in the public interest to avoid retrospective legislation).

(4) In subsection (1) “amend the law” means—

(a) disapply or modify the effect of a provision of an enactment (other than a provision made by or under this Act),

(b) disapply or modify the effect of a rule of law not set out in legislation, or

(5) Provision under this section may relate to this Part as it applies—

(a) to banks,

(b) to building societies,

(ca) to investment firms,

(cb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(cc) to third-country institutions,

(cd) to UK branches, or

(d) to any combination.

(6) Specific powers under this Part are without prejudice to the generality of this section.

(7) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(8) But if the Treasury think it necessary to make an order without complying with subsection (7)(b)—

(a) the order may be made,

(b) the order shall lapse unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made,

(c) the lapse of an order under paragraph (b) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and

(d) the lapse of an order under paragraph (b) does not prevent the making of a new order (in new terms).

(9) For the purposes of this section—

“third-country institution” has the same meaning as in section 48Z;

“UK branch” means a branch located in the United Kingdom of a third-country institution authorised for the purposes of the Financial Services and Markets Act 2000 by the PRA or the FCA.

Treasury

International obligation notice: general

76

(1) The Bank of England may not exercise the power to make a resolution administrator appointment instrument or a mandatory reduction instrument or a stabilisation power in respect of a bank if the Treasury notify the Bank that the exercise would be likely to contravene an international obligation of the United Kingdom.

(2) A notice under subsection (1)—

(a) must be in writing, and

(b) may be withdrawn (generally, partially or conditionally).

(3) If the Treasury give a notice under subsection (1) the Bank of England must consider other exercises of the power to make a resolution administrator appointment instrument or a mandatory reduction instrument or the stabilisation powers with a view to—

(a) pursuing the special resolution objectives, and

(b) avoiding the objections on which the Treasury's notice was based.

(4) The Treasury may by notice to the Bank of England disapply subsection (3) in respect of a bank; and a notice may be revoked by further notice.

(5) “Resolution administrator appointment instrument” means an instrument under section 62B(2)(a).

International obligation notice: bridge bank

77

(1) This section applies where the Bank of England has transferred all or part of a bank's business to a resolution company.

(2) The Bank of England must comply with any notice of the Treasury requiring the Bank, for the purpose of ensuring compliance by the United Kingdom with its international obligations—

(a) to take specified action under this Part in respect of the resolution company, or

(b) not to take specified action under this Part in respect of the resolution company.

(3) A notice under subsection (1)—

(a) must be in writing, and

(b) may be withdrawn (generally, partially or conditionally).

(4) A notice may include requirements about timing.

Public funds: general

78

(1) The Bank of England may not exercise the power to make a mandatory reduction instrument or a stabilisation power in respect of a bank without the Treasury's consent if the exercise would be likely to have implications for public funds.

(2) In subsection (1)—

(a) “public funds” means the Consolidated Fund and any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury, and

(b) action has implications for public funds if it would or might involve or lead to a need for the application of public funds.

(3) The Treasury may by order specify considerations which are to be, or not to be, taken into account in determining whether action has implications for public funds for the purpose of subsection (1).

(4) If the Treasury refuse consent under subsection (1), the Bank of England must consider other exercises of the power to make a mandatory reduction instrument or the stabilisation powers with a view to—

(a) pursuing the special resolution objectives, and

(b) avoiding the objections on which the Treasury's refusal was based.

(5) The Treasury may by notice to the Bank of England disapply subsection (4) in respect of a bank; and a notice may be revoked by further notice.

(6) An order under subsection (3)—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of the House of Commons.

Public funds: bridge bank

79

(1) This section applies where the Bank of England has transferred all or part of a bank's business to a resolution company.

(2) The Bank of England may not take action in respect of the resolution company without the Treasury's consent if the action would be likely to have implications for public funds.

(3) Section 78(2) and (3) have effect for the purposes of this section.

Bridge bank: report

80

(1) Where the Bank of England transfers all or part of a bank's business to a resolution company, the Bank must report to the Chancellor of the Exchequer about the activities of the resolution company.

(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer to the resolution company.

(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.

(4) The Chancellor of the Exchequer must lay a copy of each report under subsection (2) or (3) before Parliament.

(5) The Bank must comply with any request of the Treasury for a report dealing with specified matters in relation to a resolution company.

(6) A request under subsection (5) may include provision about—

(a) the content of the report;

(b) timing.

Temporary public ownership: report

81

(1) Where the Treasury make one or more share transfer orders under section 13(2) in respect of a bank, the Treasury must lay before Parliament a report about the activities of the bank.

(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first share transfer order.

(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.

(4) The obligation to produce reports continues to apply in respect of each year until the first during which no securities issued by the bank are owned by—

(a) a company wholly owned by the Treasury, or

(b) a nominee of the Treasury.

Groups

Temporary public ownership

82

(1) The Treasury may take a parent undertaking of a bank (the “holding company”) into temporary public ownership, in accordance with section 13(2), if the following conditions are met.

(2) Condition 1 is that the PRA is satisfied that the general conditions for the exercise of a stabilisation power set out in section 7 are met in respect of the bank.

(3) Condition 2 is that the Treasury are satisfied that it is necessary to take action in respect of the holding company for the purpose specified in Condition A or B of section 9.

(4) Condition 3 is that the holding company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.

(5) Before determining whether Condition 2 is met the Treasury must consult—

(a) the PRA,

(aa) the FCA, and

(b) the Bank of England.

(6) Expressions used in this section have the same meaning as in the Companies Act 2006.

Supplemental

83

(1) In the following provisions references to banks include references to holding companies—

(a) section 10(1),

(aa) section 12ZA(2)(c),

(b) section 13(3),

(d) section 75(5)(a).

(2) Where the Treasury take a bank's holding company into temporary public ownership in reliance on section 82—

(a) section 20(2) applies to (i) directors of the holding company, (ii) directors of the bank, and (iii) directors of a bank in the same group,

(b) section 25(2) applies as if references to a bank were references to a holding company,

(d) a share transfer may be made in respect of securities which were issued by the bank or by another bank which is or was in the same group; and a transfer—

(i) shall be made by onward share transfer order under section 28 or by reverse share transfer order under section 29 (in addition to any that may be made under those sections as applied by paragraph (c) above),

(ii) may be made under section 28 only in respect of securities held by (or for the benefit of) the holding company or a subsidiary undertaking of the holding company,

(iii) is not subject to section 28(4), and

(iv) is not subject to the restriction in section 29(3) that the securities issued by the bank were transferred under the original order (as defined in section 29(1)).

(e) section 45 applies as if—

(i) the reference to a bank in subsection (1) were a reference to a holding company, and

(ii) a reference to the bank in subsection (3) were a reference to the holding company, the bank and any other bank which is or was in the same group,

(f) sections 65 to 68 apply, with—

(i) references to the bank or the transferred bank taken as references to the bank, the holding company and any other bank which is or was in the same group, and

(ii) references to securities of the bank taken as including references to securities of the holding company (so that, in particular, sections 65(1)(a)(ii) and 68(1)(a) include references to the earlier transfer of securities issued by the holding company),

(g) other provisions of this Act about share transfer orders apply with any necessary modifications,

(h) section 214B of the Financial Services and Markets Act 2000 applies (contribution to costs of special resolution regime...), and

(i) the reference in section 214B(1)(b) to the bank, and later references in the section, are treated as including references to any other bank which is also a subsidiary undertaking of the holding company (but not to the holding company itself).

(3) A reference in this Act or another enactment to a share transfer order in respect of securities issued by a bank includes (so far as the context permits) a reference to a share transfer order in respect of securities issued by a holding company.

(4) In so far as sections 47 and 60 apply in relation to orders treated as property transfer instruments by virtue of section 45(5)(b) or 46(5)(b) (including those sections as applied by virtue of subsection (2) above) the reference in section 47(1) to the property of a bank includes a reference to the property of a holding company and of any other bank which is or was in the same group.

(5) Expressions used in this section have the same meaning as in the Companies Act 2006.

(6) A reference to two banks being in the same group is a reference to their being group undertakings in respect of each other.

Building societies, &c.

Application of Part 1: general

84

This Part applies to building societies (within the meaning of section 119 of the Building Societies Act 1986) as it applies to banks, subject to—

(a) the provisions of the Table, and

(b) sections 84ZA to 84D (which relate to the second and fourth stabilisation options ).

Section	Topic	Modification or note
. . .	. . .	. . .
13	Temporary public ownership	The procedure provided by section 85 has effect in place of share transfer orders.
14 to 32	Transfer of securities	The procedure provided by section 85 has effect in place of share transfer orders; and—sections 28 and 30 do not apply, andsection 27 applies following an order under section 85 as following a share transfer order.
33	Property transfer instrument: nature	A property transfer instrument in respect of a building society may—cancel shares in the building society;confer rights and impose liabilities in place of cancelled shares (whether by way of actual or deemed shares in a transferee building society or by way of other rights and liabilities in relation to a transferee bank).
33 and 36	Property transfer instrument: continuity	A property transfer instrument in respect of a bank which provides for transfer to a building society may confer rights and impose liabilities by way of actual or deemed shares in the building society.
34	Property transfer instrument: effect	A property transfer instrument may, in particular, have effect without causing sections 93 to 102D of the Building Societies Act 1986 (mergers and transfers) to apply.
42	Supplemental property transfer instrument	A supplemental property transfer instrument in respect of a building society may—cancel shares in the building society;confer rights and impose liabilities in place of cancelled shares (whether by way of actual or deemed shares in a transferee building society or by way of other rights and liabilities in relation to a transferee bank).
45	Temporary public ownership: property transfer	aSection 45 applies following an order under section 85 as following a share transfer order.bA property transfer order in respect of a building society may cancel shares in the building society.
49 to 62	Compensation	aA reference to a share transfer order includes a reference to an order under section 85.bA resolution fund order may not be made under section 51(2)(b).cIf and in so far as an order under section 85 provides for the issue of new deferred shares, section 51(2) shall not apply but the Treasury may make a third party compensation order.
63 to 75	Incidental functions	A reference to a share transfer order includes a reference to an order under section 85.

Temporary public ownership

85

(1) For the purpose of exercising the fifth stabilisation option in respect of a building society the Treasury may make one or more orders for the purposes of—

(a) arranging for deferred shares of a building society to be publicly owned,

(b) cancelling private membership rights in the building society,

(d) eventually either winding up or dissolving the building society.

(2) For the purpose specified in subsection (1)(a) an order may—

(a) arrange for the transfer of existing deferred shares;

(b) provide for new deferred shares.

(3) For the purpose of arranging for the transfer of existing deferred shares an order may—

(a) provide for deferred shares to be transferred;

(b) make other provision for the purposes of, or in connection with, the transfer of deferred shares (whether or not the transfer has been or is to be effected by the order, by another order under this section or otherwise);

(4) For the purpose of providing for new deferred shares an order may—

(a) issue or allow the Treasury to issue new deferred shares on behalf of the building society;

(b) specify or allow the Treasury to specify the terms and effect of new deferred shares;

(5) For the purpose specified in subsection (1)(b) an order may—

(a) cancel or permit the cancellation of shares (whether or not deferred) in the building society;

(b) confer rights and impose liabilities, or allow them to be conferred and imposed, in place of cancelled shares;

(c) prevent the issue or acquisition of shares in or other rights in respect of the building society otherwise than in accordance with the order.

(6) For the purpose specified in subsection (1)(c) an order may make any provision which the Treasury think desirable to facilitate the business of the building society after the making of provision in accordance with subsections (3) to (5).

(7) An order in respect of a building society may—

(a) make provision expressly or impliedly disapplying or modifying the memorandum or rules of the building society;

(b) disapply or modify an enactment about, or in its application to, building societies.

(8) The following sections apply to orders under this section as to share transfer orders: sections 17, 18, 20, 21, ... , 23, 25, 48Z, 71, 73 and 83Z2.

Distribution of assets on dissolution or winding up

86

(1) The Treasury may by order make provision about the distribution of surplus assets of a building society which—

(a) is the subject of a property transfer instrument or order, and

(b) is later wound up or dissolved by consent.

(2) An order under section 85 may include provision about the distribution of surplus assets of the building society if it is later wound up or dissolved by consent.

(3) “Surplus” means remaining after the satisfaction of liabilities to creditors and shareholders.

(4) An order under or by virtue of this section—

(a) may include any provision of a kind that may be made by order under section 90B of the Building Societies Act 1986 (power to alter priorities on dissolution or winding up),

(b) may be made whether or not the power under that section has been exercised, and

Interpretation

87

(1) Expressions used in this group of sections and in the Building Societies Act 1986 have the same meaning in this group of sections as in that Act.

(2) An order under section 119(1) of that Act defining “deferred shares”—

(a) may make special provision for the meaning of that expression in the application of this group of sections, and

(b) shall otherwise apply to this group of sections as to that Act.

Consequential provision

88

(1) The Treasury may by order make provision, in addition to the provisions of this group of sections, in consequence of the application of this Part to building societies.

(2) An order may, in particular, amend or modify the effect of an enactment (including a fiscal enactment) passed before the commencement of this Part.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Credit unions

89

(1) The Treasury may by order provide for the application of this Part to credit unions (within the meaning of section 31 of the Credit Unions Act 1979) subject to modifications set out in the order.

(2) An order may disapply, modify or apply (with or without modifications) any enactment which relates, or in so far as it relates, to credit unions.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) Provision made under or by virtue of this Part may make special provision in relation to the application of this Part to credit unions.

(5) In the application of this section to Northern Ireland the reference to section 31 of the Credit Unions Act 1979 is to be treated as a reference to Article 2 of the Credit Unions (Northern Ireland) Order 1985.

Part 2 — Bank Insolvency

Introduction

Overview

90

(1) This Part provides for a procedure to be known as bank insolvency.

(2) The main features of bank insolvency are that—

(a) a bank enters the process by court order,

(b) the order appoints a bank liquidator,

(c) the bank liquidator aims to arrange for the bank's eligible depositors to have their accounts transferred or to receive their compensation from the FSCS,

(d) the bank liquidator then winds up the bank, and

(e) for those purposes, the bank liquidator has powers and duties of liquidators, as applied and modified by the provisions of this Part.

(3) The Table describes the provisions of this Part.

Sections	Topic
Sections 90 to 93	Introduction
Sections 94 to 98	Bank insolvency order
Sections 99 to 105	Process of bank liquidation
Sections 106 to 112	Tenure of bank liquidator
Sections 113 to 116	Termination of process, &c.
Sections 117 to 122	Other processes
Sections 123 to 135	Miscellaneous

Interpretation: “bank”

91

(1) In this Part “bank” means a UK institution which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22).

(2) But “bank” does not include—

(a) a building society within the meaning of section 119 of the Building Societies Act 1986,

(b) a credit union within the meaning of section 31 of the Credit Unions Act 1979, or

(3) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.

(4) An order under subsection (2)(c)—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(5) Section 130 makes provision for the application of this Part to building societies.

(6) Section 131 makes provision for the application of this Part to credit unions.

Interpretation: “the court”

92

In this Part “the court” means—

(a) in England and Wales, the High Court,

(b) in Scotland, the Court of Session, and

Interpretation: other expressions

93

(1) In this Part—

(a) “the PRA” means the Prudential Regulation Authority, and

(b) “the FCA” means the Financial Conduct Authority.

(2) In this Part a reference to “the FSCS” is a reference to—

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

(b) where appropriate, the scheme manager of that Scheme.

(3) In this Part “eligible depositors” means depositors who are eligible for compensation under the FSCS.

(4) For the purposes of a reference in this Part to inability to pay debts—

(a) a bank that is in default on an obligation to pay a sum due and payable under an agreement, is to be treated as unable to pay its debts, and

(b) section 123 of the Insolvency Act 1986 (inability to pay debts) also applies; and

for the purposes of paragraph (a) “agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the bank.

(5) Expressions used in this Part and in the Insolvency Act 1986 have the same meaning as in that Act.

(6) Expressions used in this Part and in the Companies Act 2006 have the same meaning as in that Act.

(7) A reference in this Part to action includes a reference to inaction.

(8) The expression “fair” is used in this Part as a shorter modern equivalent of the expression “just and equitable” (and is not therefore intended to exclude the application of any judicial or other practice relating to the construction and application of that expression).

Bank insolvency order

The order

94

(1) A bank insolvency order is an order appointing a person as the bank liquidator of a bank.

(2) A person is eligible for appointment as a bank liquidator if qualified to act as an insolvency practitioner in relation to the bank.

(3) An appointment may be made only if the person has consented to act.

(4) A bank insolvency order takes effect in accordance with section 98; and—

(a) the process of a bank insolvency order having effect may be described as “bank insolvency” in relation to the bank, and

(b) while the order has effect the bank may be described as being “in bank insolvency”.

Application

95

(1) An application for a bank insolvency order may be made to the court by—

(a) the Bank of England,

(b) the PRA, or

(2) An application must nominate a person to be appointed as the bank liquidator.

(3) The bank must be given notice of an application, in accordance with rules under section 411 of the Insolvency Act 1986 (as applied by section 125 below).

Grounds for applying

96

(1) In this section—

(a) Ground A is that a bank is unable, or likely to become unable, to pay its debts,

(b) Ground B is that the winding up of a bank would be in the public interest, and

(2) The Bank of England may apply for a bank insolvency order only if—

(a) ... the PRA is satisfied that Condition 1 in section 7 is met, and

(b) the Bank of England is satisfied—

(ai) that Condition 2 in section 7 is met,

(i) that the bank has eligible depositors, and

(ii) that Ground A or C applies.

(3) The PRA may apply for a bank insolvency order only if—

(a) the Bank of England is satisfied that Condition 2 in section 7 is met, and

(b) the PRA is satisfied—

(i) that Condition 1 in section 7 is met,

(ii) that the bank has eligible depositors, and

(iii) that Ground A or C applies.

(4) The Secretary of State may apply for a bank insolvency order only if satisfied—

(a) that the bank has eligible depositors, and

(b) that Ground B applies.

(5) The sources of information on the basis of which the Secretary of State may be satisfied of the matters specified in subsection (4) include those listed in section 124A(1) of the Insolvency Act 1986 (petition for winding up on grounds of public interest).

Grounds for making

97

(1) The court may make a bank insolvency order on the application of the Bank of England or the PRA if satisfied—

(a) that the bank has eligible depositors, and

(b) that Ground A or C of section 96 applies.

(2) The court may make a bank insolvency order on the application of the Secretary of State if satisfied—

(a) that the bank has eligible depositors, and

(b) that Grounds B and C of section 96 apply.

(3) On an application for a bank insolvency order the court may—

(a) grant the application in accordance with subsection (1) or (2),

(b) adjourn the application (generally or to a specified date), or

Commencement

98

(1) A bank insolvency order shall be treated as having taken effect in accordance with this section.

(2) In the case where—

(a) notice has been given to the PRA under section 120 of an application for an administration order or a petition for a winding up order, and

(b) the PRA or the Bank of England applies for a bank insolvency order in the period of 2 weeks specified in Condition 3 in that section,

the bank insolvency order is treated as having taken effect when the application or petition was made or presented.

(3) In any other case, the bank insolvency order is treated as having taken effect when the application for the order was made.

(4) Unless the court directs otherwise on proof of fraud or mistake, proceedings taken in the bank insolvency, during the period for which it is treated as having had effect, are treated as having been taken validly.

Process of bank liquidation

Objectives

99

(1) A bank liquidator has two objectives.

(2) Objective 1 is to work with the FSCS so as to ensure that as soon as is reasonably practicable each eligible depositor—

(a) has the relevant account transferred to another financial institution, or

(b) receives payment from (or on behalf of) the FSCS.

(3) Objective 2 is to wind up the affairs of the bank so as to achieve the best result for the bank's creditors as a whole.

(4) Objective 1 takes precedence over Objective 2 (but the bank liquidator is obliged to begin working towards both objectives immediately upon appointment).

Liquidation committee

100

(1) Following a bank insolvency order a liquidation committee must be established, for the purpose of ensuring that the bank liquidator properly exercises the functions under this Part.

(2) The liquidation committee is to consist initially of—

(a) two individuals nominated by the Bank of England,

(b) one individual nominated by the PRA,

(d) one individual nominated by the FSCS.

(3) The bank liquidator must report to the liquidation committee about any matter—

(a) on request, or

(b) which the bank liquidator thinks is likely to be of interest to the liquidation committee.

(4) In particular, the bank liquidator—

(a) must keep the liquidation committee informed of progress towards Objective 1 in section 99, and

(b) must notify the liquidation committee when in the bank liquidator's opinion Objective 1 in section 99 has been achieved entirely or so far as is reasonably practicable.

(5) As soon as is reasonably practicable after receiving notice under subsection (4)(b) the liquidation committee must either—

(a) resolve that Objective 1 in section 99 has been achieved entirely or so far as is reasonably practicable (a “full payment resolution”), or

(b) apply to the court under section 168(5) of the Insolvency Act 1986 (as applied by section 103 below).

(6) Where a liquidation committee passes a full payment resolution—

(a) the bank liquidator must summon a meeting of creditors,

(b) the meeting may elect 2 or 4 individuals as new members of the liquidation committee,

(d) the FSCS may resign from the liquidation committee (in which case 3 or 5 new members may be elected under paragraph (b)), and

(e) if no individuals are elected under paragraph (b), or the resulting committee would have fewer than 3 members or an even number of members, the liquidation committee ceases to exist at the end of the meeting.

(7) Subject to provisions of this section, rules under section 411 of the Insolvency Act 1986 (as amended by section 125 below) may make provision about—

(a) the establishment of liquidation committees,

(b) the membership of liquidation committees,

(d) the proceedings of liquidation committees.

Liquidation committee: supplemental

101

(1) A meeting of the liquidation committee may be summoned—

(a) by any of the members, or

(b) by the bank liquidator.

(2) While the liquidation committee consists of the initial members (or their nominated replacements) a meeting is quorate only if all the members are present.

(3) A person aggrieved by any action of the liquidation committee before it has passed a full payment resolution may apply to the court, which may make any order (including an order for the repayment of money).

(4) The court may (whether on an application under subsection (3), on the application of a bank liquidator or otherwise) make an order that the liquidation committee is to be treated as having passed a full payment resolution.

(5) If a liquidation committee fails to comply with section 100(5) the bank liquidator must apply to the court—

(a) for an order under subsection (4) above, or

(b) for directions under or by virtue of section 168(3) or 169(2) of the Insolvency Act 1986 as applied by section 103 below.

(6) A nominating body under section 100(2) may replace its nominee at any time.

(7) After the removal of the nominated members under section 100(6)(c) the PRA, the FCA and the Bank of England—

(a) may attend meetings of the liquidation committee,

(b) are entitled to copies of documents relating to the liquidation committee's business,

(d) may participate in legal proceedings relating to the bank insolvency.

(8) Where a liquidation committee ceases to exist by virtue of section 100(6)(e)—

(a) it may be re-formed by a creditors' meeting summoned by the bank liquidator for the purpose, and

(b) the bank liquidator must summon a meeting for the purpose if requested to do so by one-tenth in value of the bank's creditors.

(9) Where a liquidation committee ceases to exist by virtue of section 100(6)(e) and has not been re-formed under subsection (8) above or under section 141(2) or 142(2) of the Insolvency Act 1986 (as applied by section 103 below)—

(a) ignore a reference in this Part to the liquidation committee,

(b) for section 113(2) to (4) substitute requirements for the bank liquidator, before making a proposal—

(i) to produce a final report,

(ii) to send copies in accordance with section 113(2)(b),

(iii) to make it available in accordance with section 113(2)(c), and

(iv) to be satisfied as specified in section 113(4)(b),

(d) for section 115(1) to (5) substitute a power for the bank liquidator to apply to the Secretary of State or Accountant of Court for release and requirements that before making an application the bank liquidator must—

(i) produce a final report,

(ii) send copies in accordance with section 115(2)(b),

(iii) make it available in accordance with section 115(2)(c), and

(iv) notify the court and the registrar of companies of the intention to vacate office and to apply for release.

Objective 1: (a) or (b)?

102

(1) As soon as is reasonably practicable, a liquidation committee must recommend the bank liquidator to pursue—

(a) Objective 1(a) in section 99,

(b) Objective 1(b) in section 99, or

(2) In making a recommendation the liquidation committee must consider—

(a) the desirability of achieving Objective 1 as quickly as possible, and

(b) Objective 2 in section 99.

(3) If the liquidation committee thinks that the bank liquidator is failing to comply with their recommendation, they must apply to the court for directions under section 168(5) of the Insolvency Act 1986 (as applied by section 103 below).

(4) Where the liquidation committee has not made a recommendation the bank liquidator may apply to the court under section 101(3); and the court may, in particular, make a direction in lieu of a recommendation if the liquidation committee fail to make one within a period set by the court.

General powers, duties and effect

103

(1) A bank liquidator may do anything necessary or expedient for the pursuit of the Objectives in section 99.

(2) The following provisions of this section provide for—

(a) general powers and duties of bank liquidators (by application of provisions about liquidators), and

(b) the general process and effects of bank insolvency (by application of provisions about winding up).

(3) The provisions set out in the Table apply in relation to bank insolvency as in relation to winding up, with—

(a) the modifications set out in subsection (4),

(b) any other modification specified in the Table, and

(4) The modifications are that—

(a) a reference to the liquidator is a reference to the bank liquidator,

(b) a reference to winding up is a reference to bank insolvency,

(d) a reference to being wound up under Part IV or V of the Insolvency Act 1986 is a reference to being made the subject of a bank insolvency order,

(e) a reference to the commencement of winding up is a reference to the commencement of bank insolvency,

(f) a reference to going into liquidation is a reference to entering bank insolvency,

(g) a reference to a winding-up order is a reference to a bank insolvency order, and

(h) except where otherwise specified in the Table, a reference to a company is a reference to the bank.

(5) Powers conferred by this Act, by the Insolvency Act 1986 (as applied) and the Companies Acts are in addition to, and not in restriction of, any existing powers of instituting proceedings against a contributory or debtor of a bank, or the estate of any contributory or debtor, for the recovery of any call or other sum.

(6) A reference in an enactment or other document to anything done under a provision applied by this Part includes a reference to the provision as applied.

(7) In the Table “Schedule 9 to the 2015 Act” means Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (further amendments relating to the abolition of requirements to hold meetings: company insolvency).

Provision of Insolvency Act 1986	Subject	Modification or comment
Section 127	Avoidance of property dispositions	Ignore section 127(2).
Section 128	Avoidance of attachment, &c.
Section 130	Consequences of winding-up order	Ignore section 130(4).
Section 131	Company's statement of affairs	aTreat references to the official receiver as references to the bank liquidator.bA creditor or contributory of the bank is entitled to receive a copy of a statement under section 131 on request to the bank liquidator.
Section 135	Provisional appointment	aTreat the reference to the presentation of a winding-up petition as a reference to the making of an application for a bank insolvency order.bSubsection (2) applies in relation to England and Wales and Scotland (and subsection (3) does not apply).cIgnore the reference to the official receiver.dOnly a person who is qualified to act as an insolvency practitioner in relation to the bank and who consents to act may be appointed.eA provisional bank liquidator may not pay dividends to creditors.fThe appointment of a provisional bank liquidator lapses on the appointment of a bank liquidator.
Section 141	Liquidation Committee (England and Wales)	Ignore the amendment made by paragraph 36 of Schedule 9 to the 2015 Act. The application of section 141 is subject to—sections 100, 101 and 109 of this Act,rules under section 411 (as applied by section 125 of this Act) which may, in particular, adapt section 141 to reflect (i) the fact that the bank liquidator is appointed by the court and (ii) the possibility of calling creditors' meetings under other provisions, andthe omission of references to the official receiver.
Section 142	Liquidation Committee (Scotland)	Ignore the amendments made by paragraph 37 of Schedule 9 to the 2015 Act. The application of section 142 is subject to—sections 100, 101 and 109 of this Act,rules under section 411 (as applied by section 125 of this Act) which may, in particular, adapt section 142 to reflect (i) the fact that the bank liquidator is appointed by the court and (ii) the possibility of calling creditors' meetings under other provisions, andthe omission of references to the official receiver.
Section 143	General functions of liquidator	aSection 143(1) is subject to Objective 1 in section 99 above.bIgnore section 143(2).
Section 144	Custody of property
Section 145	Vesting of property
Section 146	Duty to summon final meeting	Section 146 is not applied–but section 115 below makes similar provision.
Section 147	Power to stay or sist proceedings	An application may be made only by—the bank liquidator,the PRA,the Bank of England,the FSCS, ora creditor or contributory (but only if the liquidation committee has passed a full payment resolution).
Section 148	List of contributories and application of assets	By virtue of the Insolvency Rules the functions under this section are largely delegated to the liquidator–rules by virtue of section 125 may achieve a similar delegation to the bank liquidator.
Section 149	Debts due from contributories
Section 150	Power to make calls
Section 152	Order on contributory: evidence
Section 153	Exclusion of creditors
Section 154	Adjustment of rights of contributories
Section 155	Inspection of books by creditors	In making or considering whether to make an order under section 155 the court shall have regard to Objective 1 in section 99 above.
Section 156	Payment of expenses of winding up
Section 157	Attendance at company meetings (Scotland)
Section 158	Power to arrest absconding contributory
Section 159	Powers to be cumulative	Section 159 is not applied–but subsection (5) above makes similar provision.
Section 160	Delegation of powers to liquidator (England and Wales)	Ignore the amendment made by paragraph 39 of Schedule 9 to the 2015 Act.
Section 161	Orders for calls on contributories (Scotland)
Section 162	Appeals from orders (Scotland)	An appeal may be brought only if the liquidation committee has passed a full payment resolution.
Section 167 and Schedule 4	General powers of liquidator	An application to the court may not be made under section 167(3) unless the liquidation committee has passed a full payment resolution (although a creditor or contributory may apply to the court with respect to any action (or inaction) of the liquidation committee, under section 101(3) above).In exercising or considering whether to exercise a power under Schedule 4 the bank liquidator shall have regard to Objective 1 in section 99.A reference to the liquidation committee is to the liquidation committee established by section 100.The power in paragraph 4 of Schedule 4 includes the power to submit matters to arbitration.Some additional general powers are conferred by section 104 below.
Section 168	Supplementary powers of liquidator	zaIgnore the amendment made by paragraph 41 of Schedule 9 to the 2015 Act.aA direction or request under section 168(2) has no effect unless the liquidation committee has passed a full payment resolution.bSection 168(5) also applies in the case of the imposition of bank insolvency by order of the Court of Session.cAn application to the court may not be made under section 168(5) unless the liquidation committee has passed a full payment resolution (except as provided in section 100 or 102 above).
Section 169	Supplementary powers (Scotland)	a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .bPowers of the bank liquidator by virtue of section 169(2) are subject to Objective 1 in section 99 above.
Section 170	Liquidator's duty to make returns	The liquidation committee is added to the list of persons able to apply under section 170(2).
Section 172	Removal of liquidator	Section 172 is not applied to a bank liquidator–but section 108 makes similar provision.
		Section 172(1), (2) and (5) are applied to a provisional bank liquidator.
Section 174	Release of liquidator	Section 174 is not applied–but section 115 makes similar provision.
Section 175	Preferential debts
Section 176	Preferential charge on goods restrained
Section 176AZA	Non-preferential debts of financial institutions
Section 176ZA	Expenses of winding up
Section 176ZB	Application of proceeds of office-holder claims
Section 176A	Share of assets for unsecured creditors
Section 177	Appointment of special manager
Section 178	Power to disclaim onerous property
Section 179	Disclaimer of leaseholds
Section 180	Land subject to rentcharge
Section 181	Disclaimer: powers of court
Section 182	Leaseholds
Section 183	Effect of execution or attachment (England and Wales)
Section 184	Execution of writs (England and Wales)
Section 185	Effect of diligence (Scotland)	In the application of section 24(1) and (2) of the Bankruptcy (Scotland) Act 2016 the reference to an order of the court awarding winding up is a reference to the making of the bank insolvency order.
Section 186	Rescission of contracts by court
Section 187	Transfer of assets to employees
Section 188	Publicity
Section 189	Interest on debts
Section 190	Exemption from stamp duty
Section 191	Company's books as evidence
Section 192	Information about pending liquidations
Section 193	Unclaimed dividends (Scotland)
Section 194	Resolutions passed at adjourned meetings	Section 194 applies as it applied before its repeal by paragraph 46 of Schedule 9 to the 2015 Act.
Section 195	Meetings to ascertain wishes of creditors or contributories	aIgnore the amendments made by paragraph 47 of Schedule 9 to the 2015 Act.b The power to have regard to the wishes of creditors and contributories is subject to Objective 1 in section 99.
Section 196	Judicial notice of court documents
Section 197	Commission for receiving evidence
Section 198	Court order for examination of persons (Scotland)
Section 199	Costs of application for leave to proceed (Scotland)
Section 200	Affidavits
Section 206	Fraud in anticipation of winding up
Section 207	Transactions in fraud of creditors
Section 208	Misconduct in course of winding up	Ignore the amendment made by paragraph 52 of Schedule 9 to the 2015 Act.
Section 209	Falsification of company's books
Section 210	Material omissions
Section 211	False representations to creditors
Section 212	Summary remedy against directors, &c.
Section 213	Fraudulent trading
Section 214	Wrongful trading	(a) Treat the reference in subsection (2)(b) to entering insolvent administration as a reference to entering bank administration under Part 3 of this Act at a time when the bank’s assets are insufficient for the payment of its debts and other liabilities and the expenses of the administration.(b) Ignore subsection (6A).
Section 215	Sections 213 & 214: procedure
Section 216	Restriction on re-use of company names
Section 217	Personal liability for debts
Section 218	Prosecution of officers and members of company	aIgnore subsections (4) and (6).bIn subsection (3), treat the second reference to the official receiver as a reference to the Secretary of State.cIn subsection (5) treat the reference to subsection (4) as a reference to subsection (3).
Section 219	Obligations under section 218
Section 231	Appointment of 2 or more persons
Section 232	Validity of acts
Section 233	Utilities
Section 234	Getting in company's property
Section 235	Co-operation with liquidator	Ignore references to the official receiver
Section 236	Inquiry into company's dealings	Ignore references to the official receiver
Section 237	Section 236: enforcement by court
Section 238	Transactions at undervalue (England and Wales)	Anything done by the bank in connection with the exercise of a stabilisation power under Part 1 of this Act is not a transaction at an undervalue for the purposes of section 238.
Section 239	Preferences (England and Wales)	Action taken by the bank in connection with the exercise of a stabilisation power under Part 1 of this Act does not amount to giving a preference for the purpose of section 239.
Section 240	Sections 238 & 239: relevant time
Section 241	Orders under sections 238 & 239	Having notice of the relevant proceedings means having notice of—an application by the Bank of England, the PRA or the Secretary of State for a bank insolvency order, ornotice under section 120 below.
Section 242	Gratuitous alienations (Scotland)	Anything done by the bank in connection with the exercise of a stabilisation power under Part 1 of this Act is not a gratuitous alienation for the purpose of section 242 or any other rule of law.
Section 243	Unfair preferences (Scotland)	Action taken by the bank in connection with the exercise of a stabilisation power under Part 1 of this Act does not amount to an unfair preference for the purpose of section 243 or any other rule of law.
Section 244	Extortionate credit transactions
Section 245	Avoidance of floating charges
Section 246	Unenforceability of liens
Section 246ZD	Power to assign certain causes of action
Sections 386 & 387, and Schedule 6 (and Schedule 4 to the Pension Schemes Act 1993)	Preferential debts
Section 387A	Financial institutions and their non-preferential debts
Section 389	Offence of acting without being qualified	Treat references to acting as an insolvency practitioner as references to acting as a bank liquidator.
Sections 390 to 391T	Authorisation and regulation of insolvency practitioners	(a) In section 390 treat references to acting as an insolvency practitioner as references to acting as a bank liquidator.(b) Read subsection (2) of that section (as so modified) as if after “authorised” there were inserted “to act as an insolvency practitioner”.(c) An order under section 391 has effect in relation to any provision applied for the purposes of bank insolvency.(d) In sections 390A, 390B(1) and (3), 391O(1)(b) and 391R(3)(b), in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in subsection (4)(h) of this section.(e) In sections 391Q(2)(b) and 391S(3)(e) the reference to a company has effect without the modification in subsection (4)(h) of this section.
Sections 423–425	Transactions defrauding creditors	Anything done by the bank in connection with the exercise of a stabilisation power under Part 1 of this Act is not a transaction at an undervalue for the purposes of section 423.
Sections 430 to 432and Schedule 10	Offences
Section 433	Statements: admissibility	For section 433(1)(a) and (b) substitute a reference to a statement prepared for the purposes of a provision of this Part.

Additional general powers

104

(1) A bank liquidator has the following powers.

(2) Power to effect and maintain insurances in respect of the business and property of the bank.

(3) Power to do all such things (including the carrying out of works) as may be necessary for the realisation of the property of the bank.

(4) Power to make any payment which is necessary or incidental to the performance of the bank liquidator's functions.

Status of bank liquidator

105

A bank liquidator is an officer of the court.

Tenure of bank liquidator

Term of appointment

106

A bank liquidator appointed by bank insolvency order remains in office until vacating office—

(a) by resigning under section 107,

(b) on removal under section 108 or 109,

(d) on the appointment of a replacement in accordance with section 112,

(e) in accordance with sections 113 to 115, or

(f) on death.

Resignation

107

(1) A bank liquidator may resign by notice to the court.

(2) Rules under section 411 of the Insolvency Act 1986 (as applied by section 125 below) may restrict a bank liquidator's power to resign.

(3) Resignation shall take effect in accordance with those rules (which shall include provision about release).

Removal by court

108

(1) A bank liquidator may be removed by order of the court on the application of—

(a) the liquidation committee,

(b) the PRA, or

(2) Before making an application the PRA must consult ... the FCA.

(3) Before making an application the Bank of England must consult ...the FCA.

(4) A bank liquidator removed by order has release with effect from a time determined by—

(a) the Secretary of State, or

(b) in the case of a bank liquidator in Scotland, the Accountant of Court.

Removal by creditors

109

(1) A bank liquidator may be removed by resolution of a meeting of creditors held pursuant to section 195 of the Insolvency Act 1986 (as applied by section 103 above) provided that the following conditions are met.

(2) Condition 1 is that the liquidation committee has passed a full payment resolution.

(3) Condition 2 is that the notice given to creditors of the meeting includes notice of intention to move a resolution removing the bank liquidator.

(4) Condition 3 is that the Bank of England, the PRA and the FCA—

(a) receive notice of the meeting, and

(b) are given an opportunity to make representations to it.

(5) A bank liquidator who is removed under this section has release with effect—

(a) from the time when the court is informed of the removal, or

(b) if the meeting removing the bank liquidator resolves to disapply paragraph (a), from a time determined by—

(i) the Secretary of State, or

(ii) in the case of a bank liquidator in Scotland, the Accountant of Court.

Disqualification

110

(1) If a bank liquidator ceases to be qualified to act as an insolvency practitioner in relation to the bank, the appointment lapses.

(2) A bank liquidator whose appointment lapses under subsection (1) has release with effect from a time determined by—

(a) the Secretary of State, or

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Banking Act 2009

Third party compensation: discretionary provision

59

Third party compensation: mandatory provision

60

Sources of compensation

61

Procedure

62

Incidental functions

General continuity obligation: property transfers

63

Special continuity obligations: property transfers

64

Continuity obligations: onward property transfers

65

General continuity obligation: share transfers

66

Special continuity obligations: share transfers

67

Continuity obligations: onward share transfers

68

Continuity obligations: consideration and terms

69

Continuity obligations: termination

70

Pensions

71

Enforcement

72

Disputes

73

Tax

74

Power to change law

75

Treasury

International obligation notice: general

76

International obligation notice: bridge bank

77

Public funds: general

78

Public funds: bridge bank

79

Bridge bank: report

80

Temporary public ownership: report

81

Groups

Temporary public ownership

82

Supplemental

83

Building societies, &c.

Application of Part 1: general

84

Temporary public ownership

85

Distribution of assets on dissolution or winding up

86

Interpretation

87

Consequential provision

88

Credit unions

89

Part 2 — Bank Insolvency

Introduction

Overview

90

Interpretation: “bank”

91

Interpretation: “the court”

92

Interpretation: other expressions

93

Bank insolvency order

The order

94