Explanatory note

This Order makes provision about compensation arrangements in respect of the transfer of shares in Silicon Valley Bank UK Limited to HSBC UK Bank plc by virtue of the Silicon Valley Bank UK Limited Mandatory Reduction and Share Transfer Instrument 2023 (the “Transfer Instrument”).

The Transfer Instrument was made by the Bank of England on 13th March 2023 under the special resolution regime in the Banking Act 2009 (c. 1) (the “Act”). In making the Transfer Instrument, the Bank of England exercised the “private sector purchaser” stabilisation option, which enables the transfer of shares to a commercial purchaser (section 11 of the Act).

Where this stabilisation option has been exercised by the Bank of England, the Treasury is required to make provision for a compensation scheme (section 50(2) of the Act). Article 2 of this Order makes provision for a compensation scheme under which the amount of compensation payable is determined as nil.

A full impact assessment has not been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen.