Banking Act 2009
 

Banking Act 2009

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Crown Copyright Acknowledged
CONTENTS

Banking Act 2009

2009 CHAPTER 1

Part 1

Special Resolution Regime

Introduction

1. Overview

2. Interpretation: “bank”

3. Interpretation: other expressions

Objectives and code

4. Special resolution objectives

5. Code of practice

6. Code of practice: procedure

Exercise of powers: general

7. General conditions

8. Specific conditions: private sector purchaser and bridge bank

9. Specific conditions: temporary public ownership

10. Banking Liaison Panel

The stabilisation options

11. Private sector purchaser

12. Bridge bank

13. Temporary public ownership

Transfer of securities

14. Interpretation: “securities”

15. Share transfer instrument

16. Share transfer order

17. Effect

18. Continuity

19. Conversion and delisting

20. Directors

21. Ancillary instruments: production, registration, &c.

22. Termination rights, &c.

23. Incidental provision

24. Procedure: instruments

25. Procedure: orders

26. Supplemental instruments

27. Supplemental orders

28. Onward transfer

29. Reverse share transfer

30. Bridge bank: share transfers

31. Bridge bank: reverse share transfer

32. Interpretation: general

Transfer of property

33. Property transfer instrument

34. Effect

35. Transferable property

36. Continuity

37. Licences

38. Termination rights, &c.

39. Foreign property

40. Incidental provision

41. Procedure

42. Supplemental instruments

43. Onward transfer

44. Reverse property transfer

45. Temporary public ownership: property transfer

46. Temporary public ownership: reverse property transfer

47. Restriction of partial transfers

48. Power to protect certain interests

Compensation

49. Orders

50. Sale to private sector purchaser

51. Transfer to temporary public ownership

52. Transfer to bridge bank

53. Onward and reverse transfers

54. Independent valuer

55. Independent valuer: supplemental

56. Independent valuer: money

57. Valuation principles

58. Resolution fund

59. Third party compensation: discretionary provision

60. Third party compensation: mandatory provision

61. Sources of compensation

62. Procedure

Incidental functions

63. General continuity obligation: property transfers

64. Special continuity obligations: property transfers

65. Continuity obligations: onward property transfers

66. General continuity obligation: share transfers

67. Special continuity obligations: share transfers

68. Continuity obligations: onward share transfers

69. Continuity obligations: consideration and terms

70. Continuity obligations: termination

71. Pensions

72. Enforcement

73. Disputes

74. Tax

75. Power to change law

Treasury

76. International obligation notice: general

77. International obligation notice: bridge bank

78. Public funds: general

79. Public funds: bridge bank

80. Bridge bank: report

81. Temporary public ownership: report

Holding companies

82. Temporary public ownership

83. Supplemental

Building societies, &c.

84. Application of Part 1: general

85. Temporary public ownership

86. Distribution of assets on dissolution or winding up

87. Interpretation

88. Consequential provision

89. Credit unions

Part 2

Bank Insolvency

Introduction

90. Overview

91. Interpretation: “bank”

92. Interpretation: “the court”

93. Interpretation: other expressions

Bank insolvency order

94. The order

95. Application

96. Grounds for applying

97. Grounds for making

98. Commencement

Process of bank liquidation

99. Objectives

100. Liquidation committee

101. Liquidation committee: supplemental

102. Objective 1: (a) or (b)?

103. General powers, duties and effect

104. Additional general powers

105. Status of bank liquidator

Tenure of bank liquidator

106. Term of appointment

107. Resignation

108. Removal by court

109. Removal by creditors

110. Disqualification

111. Release

112. Replacement

Termination of process, &c.

113. Company voluntary arrangement

114. Administration

115. Dissolution

116. Dissolution: supplemental

Other processes

117. Bank insolvency as alternative order

118. Voluntary winding-up

119. Exclusion of other procedures

120. Notice to FSA of preliminary steps

121. Disqualification of directors

122. Application of insolvency law

Miscellaneous

123. Role of FSCS

124. Transfer of accounts

125. Rules

126. Fees

127. Insolvency Services Account

128. Evidence

129. Co-operation between courts

130. Building societies

131. Credit unions

132. Partnerships

133. Scottish partnerships

134. Northern Ireland

135. Consequential provision

Part 3

Bank Administration

Introduction

136. Overview

137. Objectives

138. Objective 1: supporting private sector purchaser or bridge bank

139. Objective 1: duration

140. Objective 2: “normal” administration

Process

141. Bank administration order

142. Application

143. Grounds for applying

144. Grounds for making

145. General powers, duties and effect

146. Status of bank administrator

147. Administrator’s proposals

148. Sharing information

Multiple transfers

149. General application of this Part

150. Bridge bank to private purchaser

151. Property transfer from bridge bank

152. Property transfer from temporary public ownership

Termination

153. Successful rescue

154. Winding-up or voluntary arrangement

Miscellaneous

155. Disqualification of directors

156. Application of other law

157. Other processes

158. Building societies

159. Credit unions

160. Rules

161. Fees

162. Evidence

163. Partnerships

164. Scottish partnerships

165. Co-operation between courts

166. Interpretation: general

167. Northern Ireland

168. Consequential provision

Part 4

Financial Services Compensation Scheme

169. Overview

170. Contingency funding

171. Special resolution regime

172. Investing in National Loans Fund

173. Borrowing from National Loans Fund

174. Procedure for claims

175. Rights in insolvency

176. Information

177. Payments in error

178. Regulations

179. Delegation of functions

180. Functions under this Act

Part 5

Inter-Bank Payment Systems

Introduction

181. Overview

182. Interpretation: “inter-bank payment system”

183. Interpretation: other expressions

Recognised systems

184. Recognition order

185. Recognition criteria

186. Procedure

187. De-recognition

Regulation

188. Principles

189. Codes of practice

190. System rules

191. Directions

192. Role of FSA

Enforcement

193. Inspection

194. Inspection: warrant

195. Independent report

196. Compliance failure

197. Publication

198. Penalty

199. Closure

200. Management disqualification

201. Warning

202. Appeal

Miscellaneous

203. Fees

204. Information

205. Pretending to be recognised

206. Saving for informal oversight

Part 6

Banknotes: Scotland and Northern Ireland

Introduction

207. Overview

Key terms

208. “Banknote”

209. “Issue”

210. “Authorised bank”

211. “Commencement”

Authorisation to issue

212. Repeal of old authorising enactments

213. Saving for existing issuers

214. Consequential repeals and amendments

Regulations and rules

215. Banknote regulations

216. Banknote rules

Specific issues

217. Backing assets

218. Information

219. Ceasing the business of issuing notes

220. Insolvency, &c.

Enforcement

221. Offence: unlawful issue

222. Financial penalty

223. Termination of right to issue

224. Application to court

Bank of England

225. Organisation

226. Discretionary functions

227. Exemption

Part 7

Miscellaneous

Treasury support for banks

228. Consolidated Fund

229. National Loans Fund

230. “Financial institution”

231. Reports

Investment banks

232. Definition

233. Insolvency regulations

234. Regulations: details

235. Regulations: procedure

236. Review

Banking (Special Provisions) Act 2008

237. Compensation: valuer

Bank of England

238. UK financial stability

239. Number of directors

240. Meetings

241. Chair of court

242. Quorum

243. Tenure

244. Immunity

245. Weekly return

246. Information

247. Bank of England Act 1946

Financial Services Authority

248. Variation of permission

249. Functions

250. Information

Central banks

251. Financial assistance to building societies

252. Registration of charges

253. Registration of charges: Scotland

Funds attached rule (Scotland)

254. Abolition for cheques

Financial collateral arrangements

255. Regulations

256. Supplemental

Part 8

General

257. “Financial assistance”

258. “Enactment”

259. Statutory instruments

260. Money

261. Index of defined terms

262. Repeal

263. Commencement

264. Extent

265. Short title

 

An Act to make provision about banking.

[12th February 2009]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

An Act to make provision about banking.

[12th February 2009]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Part 1

Special Resolution Regime

Introduction

1 Overview

(1) The purpose of the special resolution regime for banks is to address the situation where all or part of the business of a bank has encountered, or is likely to encounter, financial difficulties.

(2) The special resolution regime consists of—

(a) the three stabilisation options,

(b) the bank insolvency procedure (provided by Part 2), and

(c) the bank administration procedure (provided by Part 3).

(3) The three “stabilisation options” are—

(a) transfer to a private sector purchaser (section 11),

(b) transfer to a bridge bank (section 12), and

(c) transfer to temporary public ownership (section 13).

(4) Each of the three stabilisation options is achieved through the exercise of one or more of the “stabilisation powers”, which are—

(a) the share transfer powers (sections 15, 16, 26 to 31 and 85), and

(b) the property transfer powers (sections 33 and 42 to 46).

(5) Each of the following has a role in the operation of the special resolution regime—

(a) the Bank of England,

(b) the Treasury, and

(c) the Financial Services Authority.

(6) The Table describes the provisions of this Part.
_________________________________________

Sections                Topic

Sections 1 to 3      Introduction

Sections 4 to 6      Objectives and code

Sections 7 to 10     Exercise of powers: general

Sections 11 to 13   The stabilisation options

Sections 14 to 32   Transfer of securities

Sections 33 to 48   Transfer of property

Sections 49 to 62   Compensation

Sections 63 to 75   Incidental functions

Sections 76 to 81   Treasury

Sections 82 and 83 Holding companies

Sections 84 to 89   Building societies, &c.
_________________________________________

2 Interpretation: “bank”

(1) In this Part “bank” means a UK institution which has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22).

(2) But “bank” does not include—

(a) a building society (within the meaning of section 119 of the Building Societies Act 1986),

(b) a credit union within the meaning of section 31 of the Credit Unions Act 1979, or

(c) any other class of institution excluded by an order made by the Treasury.

(3) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.

(4) Where a stabilisation power is exercised in respect of a bank, it does not cease to be a bank for the purposes of this Part if it later loses the permission referred to in subsection (1).

(5) An order under subsection (2)(c)—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(6) Section 84 applies this Part to building societies with modifications.

(7) Section 89 allows the application of this Part to credit unions.

3 Interpretation: other expressions

In this Part—

“the FSA” means the Financial Services Authority, and

“financial assistance” has the meaning given by section 257.

Objectives and code

4 Special resolution objectives

(1) This section sets out the special resolution objectives.

(2) The relevant authorities shall have regard to the special resolution objectives in using, or considering the use of—

(a) the stabilisation powers,

(b) the bank insolvency procedure, or

(c) the bank administration procedure.

(3) For the purpose of this section the relevant authorities are—

(a) the Treasury,

(b) the FSA, and

(c) the Bank of England.

(4) Objective 1 is to protect and enhance the stability of the financial systems of the United Kingdom.

(5) Objective 2 is to protect and enhance public confidence in the stability of the banking systems of the United Kingdom.

(6) Objective 3 is to protect depositors.

(7) Objective 4 is to protect public funds.

(8) Objective 5 is to avoid interfering with property rights in contravention of a Convention right (within the meaning of the Human Rights Act 1998).

(9) In subsection (4), the reference to the stability of the financial systems of the United Kingdom includes, in particular, a reference to the continuity of banking services.

(10) The order in which the objectives are listed in this section is not significant; they are to be balanced as appropriate in each case.

5 Code of practice

(1) The Treasury shall issue a code of practice about the use of—

(a) the stabilisation powers,

(b) the bank insolvency procedure, and

(c) the bank administration procedure.

(2) The code may, in particular, provide guidance on—

(a) how the special resolution objectives are to be understood and achieved,

(b) the choice between different options,

(c) the information to be provided in the course of a consultation under this Part,

(d) the giving of advice by one relevant authority to another about whether, when and how the stabilisation powers are to be used,

(e) how to determine whether Condition 2 in section 7 is met,

(f) how to determine whether the test for the use of stabilisation powers in section 8 is satisfied,

(g) sections 63 and 66, and

(h) compensation.

(3) Sections 12 and 13 require the inclusion in the code of certain matters about bridge banks and temporary public ownership.

(4) The relevant authorities shall have regard to the code.

(5) For the purpose of this section the relevant authorities are—

(a) the Treasury,

(b) the FSA, and

(c) the Bank of England.

6 Code of practice: procedure

(1) Before issuing the code of practice the Treasury must consult—

(a) the FSA,

(b) the Bank of England, and

(c) the scheme manager of the Financial Services Compensation Scheme (established under Part 15 of the Financial Services and Markets Act 2000).

(2) As soon as is reasonably practicable after issuing the code of practice the Treasury shall lay a copy before Parliament.

(3) The Treasury may revise and re-issue the code of practice.

(4) Subsections (1) and (2) apply to re-issue as to the first issue.

Exercise of powers: general

7 General conditions

(1) A stabilisation power may be exercised in respect of a bank only if the FSA is satisfied that the following conditions are met.

(2) Condition 1 is that the bank is failing, or is likely to fail, to satisfy the threshold conditions (within the meaning of section 41(1) of the Financial Services and Markets Act 2000 (permission to carry on regulated activities)).

(3) Condition 2 is that having regard to timing and other relevant circumstances it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the bank that will enable the bank to satisfy the threshold conditions.

(4) The FSA shall treat Conditions 1 and 2 as met if satisfied that they would be met but for financial assistance provided by—

(a) the Treasury, or

(b) the Bank of England (disregarding ordinary market assistance offered by the Bank on its usual terms).

(5) Before determining whether or not Condition 2 is met the FSA must consult—

(a) the Bank of England, and

(b) the Treasury.

(6) The special resolution objectives are not relevant to Conditions 1 and 2.

(7) The conditions for applying for and making a bank insolvency order are set out in sections 96 and 97.

(8) The conditions for applying for and making a bank administration order are set out in sections 143 and 144.

8 Specific conditions: private sector purchaser and bridge bank

(1) The Bank of England may exercise a stabilisation power in respect of a bank in accordance with section 11(2) or 12(2) only if satisfied that Condition A is met.

(2) Condition A is that the exercise of the power is necessary, having regard to the public interest in—

(a) the stability of the financial systems of the United Kingdom,

(b) the maintenance of public confidence in the stability of the banking systems of the United Kingdom, or

(c) the protection of depositors.

(3) Before determining whether Condition A is met, and if so how to react, the Bank of England must consult—

(a) the FSA, and

(b) the Treasury.

(4) Where the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom, the Bank may exercise a stabilisation power in respect of the bank in accordance with section 11(2) or 12(2) only if satisfied that Condition B is met (instead of Condition A).

(5) Condition B is that—

(a) the Treasury have recommended the Bank of England to exercise the stabilisation power on the grounds that it is necessary to protect the public interest, and

(b) in the Bank’s opinion, exercise of the stabilisation power is an appropriate way to provide that protection.

(6) The conditions in this section are in addition to the conditions in section 7.

9 Specific conditions: temporary public ownership

(1) The Treasury may exercise a stabilisation power in respect of a bank in accordance with section 13(2) only if satisfied that one of the following conditions is met.

(2) Condition A is that the exercise of the power is necessary to resolve or reduce a serious threat to the stability of the financial systems of the United Kingdom.

(3) Condition B is that exercise of the power is necessary to protect the public interest, where the Treasury have provided financial assistance in respect of the bank for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom.

(4) Before determining whether a condition is met the Treasury must consult—

(a) the FSA, and

(b) the Bank of England.

(5) The conditions in this section are in addition to the conditions in section 7.

10 Banking Liaison Panel

(1) The Treasury shall make arrangements for a panel to advise the Treasury about the effect of the special resolution regime on—

(a) banks,

(b) persons with whom banks do business, and

(c) the financial markets.

(2) In particular, the panel may advise the Treasury about—

(a) the exercise of powers to make statutory instruments under or by virtue of this Part, Part 2 or Part 3 (excluding the stabilisation powers, compensation scheme orders, resolution fund orders, third party compensation orders and orders under section 75(2)(b) and (c)),

(b) the code of practice under section 5, and

(c) anything else referred to the panel by the Treasury.

(3) The Treasury shall ensure that the panel includes—

(a) a member appointed by the Treasury,

(b) a member appointed by the Bank of England,

(c) a member appointed by the FSA,

(d) a member appointed by the scheme manager of the Financial Services Compensation Scheme,

(e) one or more persons who in the Treasury’s opinion represent the interests of banks,

(f) one or more persons who in the Treasury’s opinion have expertise in law relating to the financial systems of the United Kingdom, and

(g) one or more persons who in the Treasury’s opinion have expertise in insolvency law and practice.

The stabilisation options

11 Private sector purchaser

(1) The first stabilisation option is to sell all or part of the business of the bank to a commercial purchaser.

(2) For that purpose the Bank of England may make—

(a) one or more share transfer instruments;

(b) one or more property transfer instruments.

12 Bridge bank

(1) The second stabilisation option is to transfer all or part of the business of the bank to a company which is wholly owned by the Bank of England (a “bridge bank”).

(2) For that purpose the Bank of England may make one or more property transfer instruments.

(3) The code of practice under section 5 must include provision about the management and control of bridge banks including, in particular, provision about—

(a) setting objectives,

(b) the content of the articles of association,

(c) the content of reports under section 80(1),

(d) different arrangements for management and control at different stages, and

(e) eventual disposal.

(4) Where property, rights or liabilities are first transferred by property transfer instrument to a bridge bank and later transferred (whether or not by the exercise of a power under this Part) to another company which is wholly owned by the Bank of England, that other company is an “onward bridge bank”.

(5) An onward bridge bank—

(a) is a bridge bank for the purposes of—

(i) subsection (3),

(ii) section 77,

(iii) section 79, and

(iv) section 80(5), but

(b) is not a bridge bank for the purposes of—

(i) section 30(1),

(ii) section 43(1), or

(iii) section 80(1).

13 Temporary public ownership

(1) The third stabilisation option is to take the bank into temporary public ownership.

(2) For that purpose the Treasury may make one or more share transfer orders in which the transferee is—

(a) a nominee of the Treasury, or

(b) a company wholly owned by the Treasury.

(3) The code of practice under section 5 must include provision about the management of banks taken into temporary public ownership under this section.

Transfer of securities

14 Interpretation: “securities”

(1) In this Part “securities” includes anything falling within any of the following classes.

(2) Class 1: shares and stock.

(3) Class 2: debentures, including—

(a) debenture stock,

(b) loan stock,

(c) bonds,

(d) certificates of deposit, and

(e) any other instrument creating or acknowledging a debt.

(4) Class 3: warrants or other instruments that entitle the holder to acquire anything in Class 1 or 2.

(5) Class 4: rights which—

(a) are granted by a deposit-taker, and

(b) form part of the deposit-taker’s own funds for the purposes of section 1 of Chapter 2 of Title V of Directive 2006/48/EC (on the taking up and pursuit of the business of credit institutions).

15 Share transfer instrument

(1) A share transfer instrument is an instrument which—

(a) provides for securities issued by a specified bank to be transferred;

(b) makes other provision for the purposes of, or in connection with, the transfer of securities issued by a specified bank (whether or not the transfer has been or is to be effected by that instrument, by another share transfer instrument or otherwise).

(2) A share transfer instrument may relate to—

(a) specified securities, or

(b) securities of a specified description.

16 Share transfer order

(1) A share transfer order is an order which—

(a) provides for securities issued by a specified bank to be transferred;

(b) makes other provision for the purposes of, or in connection with, the transfer of securities issued by a specified bank (whether or not the transfer has been or is to be effected by that order, by another share transfer order or otherwise).

(2) A share transfer order may relate to—

(a) specified securities, or

(b) securities of a specified description.

17 Effect

(1) In this section “transfer” means a transfer provided for by a share transfer instrument or order.

(2) A transfer takes effect by virtue of the instrument or order (and in accordance with its provisions as to timing or other ancillary matters).

(3) A transfer takes effect despite any restriction arising by virtue of contract or legislation or in any other way.

(4) In subsection (3) “restriction” includes—

(a) any restriction, inability or incapacity affecting what can and cannot be assigned or transferred (whether generally or by a particular person), and

(b) a requirement for consent (by any name).

(5) A share transfer instrument or order may provide for a transfer to take effect free from any trust, liability or other encumbrance (and may include provision about their extinguishment).

(6) A share transfer instrument or order may extinguish rights to acquire securities falling within Class 1 or 2 in section 14.

18 Continuity

(1) A share transfer instrument or order may provide for a transferee to be treated for any purpose connected with the transfer as the same person as the transferor.

(2) A share transfer instrument or order may provide for agreements made or other things done by or in relation to a transferor to be treated as made or done by or in relation to the transferee.

(3) A share transfer instrument or order may provide for anything (including legal proceedings) that relates to anything transferred and is in the process of being done by or in relation to the transferor immediately before the transfer date, to be continued by or in relation to the transferee.

(4) A share transfer instrument or order may modify references (express or implied) in an instrument or document to a transferor.

(5) A share transfer instrument or order may require or permit—

(a) a transferor to provide a transferee with information and assistance;

(b) a transferee to provide a transferor with information and assistance.

19 Conversion and delisting

(1) A share transfer instrument or order may provide for securities to be converted from one form or class to another.

(2) A share transfer instrument or order may provide for the listing of securities, under section 74 of the Financial Services and Markets Act 2000, to be discontinued.

20 Directors

(1) A share transfer instrument may enable the Bank of England—

(a) to remove a director of a specified bank;

(b) to vary the service contract of a director of a specified bank;

(c) to terminate the service contract of a director of a specified bank;

(d) to appoint a director of a specified bank.

(2) A share transfer order may enable the Treasury—

(a) to remove a director of a specified bank;

(b) to vary the service contract of a director of a specified bank;

(c) to terminate the service contract of a director of a specified bank;

(d) to appoint a director of a specified bank.

(3) Appointments under subsection (1)(d) are to be on terms and conditions agreed with the Bank of England.

(4) Appointments under subsection (2)(d) are to be on terms and conditions agreed with the Treasury.

21 Ancillary instruments: production, registration, &c.

(1) A share transfer instrument or order may permit or require the execution, issue or delivery of an instrument.

(2) A share transfer instrument or order may provide for a transfer to have effect irrespective of—

(a) whether an instrument has been produced, delivered, transferred or otherwise dealt with;

(b) registration.

(3) A share transfer instrument or order may provide for the effect of an instrument executed, issued or delivered in accordance with the instrument or order.

(4) A share transfer instrument or order may modify or annul the effect of an instrument.

(5) A share transfer instrument or order may—

(a) entitle a transferee to be registered in respect of transferred securities;

(b) require a person to effect registration.

22 Termination rights, &c.

(1) In this section “default event provision” means a Type 1 or Type 2 default event provision as defined in subsections (2) and (3).

(2) A Type 1 default event provision is a provision of a contract or other agreement that has the effect that if a specified event occurs or situation arises—

(a) the agreement is terminated, modified or replaced,

(b) rights or duties under the agreement are terminated, modified or replaced,

(c) a right accrues to terminate, modify or replace the agreement,

(d) a right accrues to terminate, modify or replace rights or duties under the agreement,

(e) a sum becomes payable or ceases to be payable,

(f) delivery of anything becomes due or ceases to be due,

(g) a right to claim a payment or delivery accrues, changes or lapses,

(h) any other right accrues, changes or lapses, or

(i) an interest is created, changes or lapses.

(3) A Type 2 default event provision is a provision of a contract or other agreement that has the effect that a provision of the contract or agreement—

(a) takes effect only if a specified event occurs or does not occur,

(b) takes effect only if a specified situation arises or does not arise,

(c) has effect only for so long as a specified event does not occur,

(d) has effect only while a specified situation lasts,

(e) applies differently if a specified event occurs,

(f) applies differently if a specified situation arises, or

(g) applies differently while a specified situation lasts.

(4) For the purposes of subsections (2) and (3) it is the effect of a provision that matters, not how it is described (nor, for example, whether it is presented in a positive or a negative form).

(5) A share transfer instrument or order may provide for subsection (6) or (7) to apply (but need not apply either).

(6) If this subsection applies, the share transfer instrument or order is to be disregarded in determining whether a default event provision applies.

(7) If this subsection applies, the share transfer instrument or order is to be disregarded in determining whether a default event provision applies except in so far as the instrument or order provides otherwise.

(8) In subsections (6) and (7) a reference to the share transfer instrument or order is a reference to—

(a) the making of the instrument or order,

(b) anything that is done by the instrument or order or is to be, or may be, done under or by virtue of the instrument or order, and

(c) any action or decision taken or made under this or another enactment in so far as it resulted in, or was connected to, the making of the instrument or order.

(9) Provision under subsection (5) may apply subsection (6) or (7)—

(a) generally or only for specified purposes, cases or circumstances;

(b) differently for different purposes, cases or circumstances.

(10) A thing is not done by virtue of an instrument or order for the purposes of subsection (8)(b) merely by virtue of being done under a contract or other agreement rights or obligations under which have been transferred by the instrument or order.

 
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