Paragraph 3

United Kingdom

(1)

This paragraph applies where either—

(a)

paragraph 1 above applies and the F1TreasuryF2are entitled to serve a notice of objection under the relevant section; or

(b)

paragraph 2 above applies;

and in this paragraph expressions which are also used in paragraph 1 or 2 above have the same meanings as in that paragraph.

(2)

If, in a case falling within sub-paragraph (1)(a) above, the TreasuryF3consider that, if certain conditions were complied with—

(a)

by the person serving the notice under subsection (1)(a) of the relevant section; or

(b)

where the notice is under section 60(1)(a) above, by the person proposed to be appointed as managing director or chief executive,

the criteria of sound and prudent management would continue to be or, as the case may be, would be fulfilled in respect of the company, F4the Treasury may, instead of serving a notice of objection under the relevant section, serve a notice requiring the conditions in question to be complied with by that person (“the person concerned”).

A notice under this sub-paragraph shall be served—

(a)

on the person concerned, and

(b)

where that person is proposed to be appointed as managing director or chief executive, on the company.

(3)

If, in a case falling within sub-paragraph (1)(b) above, the TreasuryF5consider that,if certain conditions were complied with—

(a)

by the person in breach; or

(b)

where the contravention is of section 60(1)(a) above, by the person appointed as managing director or chief executive,

the criteria of sound and prudent management would continue to be or, as the case may be, would be fulfilled in respect of the company, F6the Treasury may, instead of serving a notice of objection under paragraph 2 above, serve a notice requiring the conditions in question to be complied with by that person (“the person concerned”).

A notice under this sub-paragraph shall be served—

(a)

on the person concerned, and

(b)

where that person has been appointed as managing director or chief executive, on the company.

(4)

Before serving a notice under sub-paragraph (2) or (3) above, the Treasury shall serve on the person concerned and, where that person is proposed to be or has been appointed as managing director or chief executive, on the company a preliminary written notice stating—

(a)

that the TreasuryF7are considering serving a notice under that sub-paragraph;

(b)

the conditions which would be required by such a notice to be complied with by the person concerned;

(c)

the criteria of sound and prudent management which F8the Treasury consider would not be fulfilled in respect of the company if they served neither such a notice nor a notice of objection under subsection (1)(a) of the relevant section or, as the case may be, paragraph 2 above; and

(d)

that the person on whom the preliminary notice is served may, within the period of one month from the date of service of that notice—

(i)

make written representations to the Treasury; and

(ii)

if that person so requests, oral representations to an officer of the F9Treasury appointed for the purpose by the Treasury.

(5)

Where representations are made in accordance with this paragraph the Treasury shall take them into consideration before serving a notice under sub-paragraph (2) or (3) above.

(6)

The Treasury shall not be obliged to disclose—

(a)

to the person concerned; or

(b)

where that person is proposed to be or has been appointed as managing director or chief executive, to the company,

any particulars of the ground on which F10they are considering the service of a notice under sub-paragraph (2) or (3) above or a notice of objection under the relevant section or, as the case may be, paragraph 2 above.