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20 February 2009
In November 2008, the Government published a consultation document: "Special resolution regime: safeguards for partial property transfers". This document was one of an extensive series of consultations which the Government, the Bank of England and the Financial Services Authority conducted on issues relating to financial stability and depositor protection, as part of the passage of the Banking Act 2009. The Act received Royal Assent on 12 February 2009.
The consultation document set out detailed proposals - including draft secondary legislation and a draft code of practice - for safeguards around the exercise of the partial transfer powers, as part of the new special resolution regime (SRR) for failing banks. The objective of these safeguards is to provide adequate legal certainty to the financial markets, while delivering sufficient flexibility for the Authorities to execute partial transfers in the interests of financial stability.
As well as the public consultation on the safeguards, which closed on 9 January 2009, the Government has worked closely with the Bank of England and the FSA in developing its proposals in these areas, and with an expert liaison group on banking, made up of legal, financial and insolvency experts from the banking sector.
The secondary legislation providing safeguards for partial transfers was laid in Parliament on Friday 20 February 2009. The secondary legislation commenced on Saturday 21 February 2009, in tandem with the SRR. The policy represented in this secondary legislation (links below) has moved significantly towards providing increased legal certainty to the market, in line with responses from the consultation and the expert group.
The documents are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
