# The Scottish and Northern Ireland Banknote Regulations 2009, Regulation 21: Note exchange programme


(1) The Bank of England must make arrangements in relation to an insolvent bank to ensure that—
(a) noteholders may exchange the banknotes giving rise to their claims for an equal value of banknotes, coins or funds of such other bank as the Bank of England may specify; and
(b) the insolvent bank’s backing assets are applied for the purpose of satisfying noteholders’ claims.
(2) The reference to another bank in paragraph (1)(a) includes a reference to the Bank of England.
(3) The Bank of England shall have the right, for the purpose of such arrangements, to—
(a) take immediate control of the insolvent bank’s backing assets;
(b) exchange backing assets for other assets, and require the insolvent bank to hold those other assets as backing assets;
(c) transfer the backing assets to noteholders in satisfaction of their claims;
(d) satisfy the claims of noteholders with banknotes, coins or other funds belonging to the Bank of England and obtain reimbursement from the backing assets.

---
Source: https://www.legislation.gov.uk/ukdsi/2009/9780111486306/regulation/21 (the official version)
Page: https://openlegislation.uk/draft-scottish-and-northern-ireland-banknote-regulations-2009/regulation-21
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.