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The Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015

S.I. 2015/428 · Made 27 February 2015 · Extends to United Kingdom

Up to date with all changes known to legislation.gov.uk, revised to 28 June 2016.

Financial Services And Markets

Made 27th February 2015

Laid before Parliament 3rd March 2015

Coming into force 26th March 2015

The Treasury make the following Order in exercise of the powers conferred by sections 145 and 148(5) of the Financial Services (Banking Reform) Act 2013f1.

Annotations to the whole text

Footnotes

f1

2013 c. 33.

Contents

  1. 1Citation and commencement
  2. 2Appointed day for the coming into force of paragraph 4 of Schedule 9
  3. 3Consequential amendments of the Building Societies (Financial Assistance) Order 2010
  4. 4Floating charges (Scotland): application of Part 18 of the Companies Act 1985
  5. 5Floating charges (Scotland): application of the Bankruptcy and Diligence etc. (Scotland) Act 2007
  6. Signature
  7. Schedule 1: Modifications of Part 18 of the Companies Act 1985
  8. 1Paragraph 1
  9. 2Paragraph 2
  10. 3Paragraph 3
  11. 4Paragraph 4
  12. 5Paragraph 5
  13. 6Paragraph 6
  14. 7Paragraph 7
  15. Schedule 2: Modifications of Part 2 of the Bankruptcy and Diligence etc. (Scotland) Act 2007
  16. 1Paragraph 1
  17. 2Paragraph 2
  18. 3Paragraph 3
  19. 4Paragraph 4
  20. 5Paragraph 5
  21. 6Paragraph 6
  22. 7Paragraph 7
  23. 8Paragraph 8
  24. 9Paragraph 9
  25. 10Paragraph 10
  26. Explanatory note

1Citation and commencementI1

This Order may be cited as the Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015, and comes into force on 26th March 2015.

2Appointed day for the coming into force of paragraph 4 of Schedule 9I1

26th March 2015 is the day appointed for the coming into force of paragraph 4 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (building societies: ability to create floating charges).

3Consequential amendments of the Building Societies (Financial Assistance) Order 2010I1

The Building Societies (Financial Assistance) Order 2010f1 is amended as follows—

(a)

omit article 7 (floating charges); and

(b)

in article 11 (application of other companies insolvency legislation to building societies)—

(i)

in paragraph (5) for “12, 13, 18 and 20” substitute “12 and 13”; and

(ii)

in paragraph (8) for “34, 35, 40 and 42” substitute “34 and 35”.

4Floating charges (Scotland): application of Part 18 of the Companies Act 1985I1

Chapters 1 and 3 of Part 18 of the Companies Act 1985f1 (floating charges: Scotland) apply to a building society as they apply to an incorporated company (whether a company within the meaning of that Act or not), but with the modifications set out in Schedule 1.

5Floating charges (Scotland): application of the Bankruptcy and Diligence etc. (Scotland) Act 2007I1

(1)

On the day on which section 46 (repeals, savings and transitional arrangements) of the Bankruptcy and Diligence etc. (Scotland) Act 2007f1 (“the 2007 Act”) comes into force—

(a)

article 4 of, and Schedule 1 to, this Order cease to have effect to the same extent as Chapters 1 and 3 of Part 18 of the Companies Act 1985 cease to have effect by virtue of section 46 of the 2007 Act; and

(b)

paragraph (2) has effect.

(2)

Part 2 of the 2007 Actf2 applies to a building society as it applies to an incorporated company, but—

(a)

with the modifications set out in Schedule 2; and

(b)

in consequence of those modifications, without the modifications in regulation 5 of the Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010f3 (registration of charges: Scotland).

Signature

Mark Lancaster

David Evennett

Two of the Lords Commissioners of Her Majesty’s Treasury

27th February 2015

1I1

The modifications of Chapters 1 and 3 of Part 18 of the Companies Act 1985 referred to in article 4 are as follows.

2I1

References to a company or incorporated company include a reference to a building society.

3I1

Section 462f1 (power of incorporated company to create floating charge) has effect as if in subsection (5)—

(a)

the reference to the Companies Act 1985 were a reference to such provisions of that Act as apply (by virtue of this Order) to a building society; F1...

(b)

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

4I1

Section 463f1 (effect of floating charge on winding up) has effect as if—

(a)

in subsection (1) for the words “section 247(2) of the Insolvency Act 1986” there were substituted “subsection (1A)”;

(b)

after subsection (1) there were inserted—

“(1A)

For the purposes of this Chapter a building society goes into liquidation if—

(a)

it goes into liquidation within the meaning of section 247(2) of the Insolvency Act 1986f2; or

(b)

the court makes a building society insolvency order in relation to it under section 94 of the Banking Act 2009f3 (as applied by section 90C of the Building Societies Act 1986f4) at a time when it has not already gone into liquidation by passing a special resolution for voluntary winding up under section 88 of the Building Societies Act 1986f5.”; F1...

(c)

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

5I1

Section 464f1 (ranking of floating charges) has effect as if—

(a)

for paragraphs (b) and (c) of subsection (4) there were substituted—

“(b)

one floating charge has priority of ranking over another if it was created first.”;

(b)

subsection (5), and the reference to that subsection in subsection (3), were omitted; and

(c)

in subsection (6) the words “Part XII and to” were omitted.

6I1

Section 466f1 (alteration of floating charges) has effect as if—

(a)

subsections (4) to (4F)f2 were omitted; and

(b)

in subsection (6) the words “subsection (4) of” were omitted.

7I1

Section 486f1 (interpretation for Part 18 generally) has effect as if in subsection (1)—

(a)

in the definition of “ancillary document” paragraph (a) were omitted; and

(b)

the definition of “company” were omitted.

1I1

The modifications of Part 2 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 referred to in article 5(2) are as follows.

2I1

References to a company include a reference to a building society.

3I1

Section 38 (creation of floating charges) has effect as if for subsections (3) and (3A) there were substituted—

“(3)

A floating charge is created only when the document granting the floating charge is executed by the building society granting the charge.”.

4I1

Section 39 (advance notice of floating charges) does not apply to building societies.

5I1

Section 41 (ranking clauses) has effect as if subsection (5) were omitted.

6I1

Section 42 (assignation of floating charges) has effect as if—

(a)

in subsection (1) the words “the registration in the Register of Floating Charges of” were omitted; and

(b)

subsection (4) were omitted.

7I1

Section 43 (alteration of floating charges) has effect as if subsections (3)(b) and (4A) were omitted.

8I1

Section 44 (discharge of floating charges) has effect as if—

(a)

in subsection (1) the words “the registration in the Register of Floating Charges of” were omitted; and

(b)

subsection (4) were omitted.

9I1

Section 45 (effect of floating charges on winding up) has effect as if—

(a)

subsections (2) F1... and (8) were omitted; and

(b)

for subsection (7) there were substituted—

“(7)

For the purposes of this section a building society goes into liquidation if—

(a)

it goes into liquidation within the meaning of section 247(2) of the Insolvency Act 1986; or

(b)

the court makes a building society insolvency order in relation to it under section 94 of the Banking Act 2009 (as applied by section 90C of the Building Societies Act 1986) at a time when it has not already gone into liquidation by passing a special resolution for voluntary winding up under section 88 of the Building Societies Act 1986).”.

10I1

Section 47 (interpretation) has effect as if the definition of “company” were omitted.

Explanatory note

(This note is not part of the Order)

This Order brings into force paragraph 4 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (c. 33) (“the Act”) on 26th March 2015. Paragraph 4 repeals section 9B of the Building Societies Act 1986 (c. 53). This will allow building societies to create floating charges. This is the eighth commencement order to be made under the Act.

Article 3 makes consequential amendments of the Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188).

Article 4 and Schedule 1 apply Part 18 of the Companies Act 1985 (c. 6) to building societies with modifications. Part 18 concerns the creation of floating charges in Scotland and their effect, ranking and alteration.

Article 5(1) provides that article 4 will cease to have effect when Part 18 of the Companies Act 1985 is repealed by section 46 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (“the 2007 Act”). Article 5(2) and Schedule 2 will then have effect to apply Part 2 of the 2007 Act to building societies with modifications. Part 2 of the 2007 Act makes provision for the creation of floating charges in Scotland and their effect, ranking, assignation, alteration and discharge.

An impact assessment of the effect of this Order on the costs of business and the voluntary sector has been prepared and is available on HM Treasury’s website (www.gov.uk/treasury) or from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is annexed to the Explanatory Memorandum for this Order.