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Paragraph 3

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

(1)

None of the following terms shall be a term to be taken to be a disqualifying term pursuant to paragraph 1(b) above—

(a)

a provision which requires notification of any other person of a proposal to take any of those steps;

(b)

a provision which requires the consent of the lender (or, where the lender comprises more than one person, of all or some of them), or of a person acting on behalf of the lender, to a transfer of engagements of the borrower where that transfer is not a transfer of all its engagements;

(c)

a provision, in the case where the interests of the lender are represented by a trustee, which requires a borrower which proposes to transfer its business to a company to satisfy that trustee that the transferee of the business will be or (as the case may be) remain an authorised institution or (if that trustee is not so satisfied) to obtain the consent of the lender (or, where the lender comprises more than one person, of all or some of them) to the transfer;

(d)

a provision which, in connection with a transfer of the business of the borrower to a company, requires or permits issue terms to be varied or supplemented where and only where—

(i)

that variation or supplement is not one which would or might cause any of the supplementary financial resources to which those issue terms relate and which comprise supplementary capital to be excluded from the financial resources considered appropriate by the Bank of England for the purposes of paragraph 4(2) of Schedule 3 (minimum criteria for authorisation) of the Banking Act 1987, and

(ii)

the circumstances in which that variation or supplement may take place are restricted by one of the qualifying restrictions set out in subparagraph (2) below.

(2)

For the purposes of subpararaph (1)(d) above the qualifying restrictions are—

(a)

a restriction to the effect that the variation or supplement of the issue terms referred to in that subparagraph is limited to dealing with matters arising out of the procedure by which the transfer takes place and the constitution of the transferee;

(b)

a restriction that the issue terms may be varied or supplemented to an extent beyond the limits specified in paragraph (a) only if the Bank of England consents to that variation or supplement.