Source: http://www.legislation.gov.uk/nisr/2009/64/made/data.xht?view=snippet&wrap=true
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The Bank Insolvency Rules (Northern Ireland) 2009 No. 64 xmlns:atom="http://www.w3.org/2005/Atom"
The Lord Chancellor makes the following Rules in exercise of the powers under Article 359 of the Insolvency (Northern Ireland) Order 1989(1).
The Lord Chief Justice of Northern Ireland under Article 359 (1A) of the Insolvency (Northern Ireland) Order 1989 concurs in the making of the Rules in so far as they affect court procedure.
The Lord Chancellor has not consulted the Committee existing for the purposes of Article 360 of the Order: this is the first set of rules made in reliance on section 125 of the Banking Act 2009 (“the 2009 Act”)(2) and the duty to consult does not therefore apply to these rules by virtue of section 125 (8) of that Act.
1. These Rules may be cited as the Bank Insolvency Rules (Northern Ireland) 2009 and come into operation on 25th February 2009.
“the 1991 Rules” means the Insolvency Rules (Northern Ireland)1991(3);
(a)the place which is specified, in the bank’s statement delivered under section 9 of the 2006 Act or, before that section comes into force, Article 21 of the Companies Order(8), as the intended situation of its registered office on incorporation, or
20.—(1) The rule applies after an application for a bank insolvency order has been filed under rule 7 and before that order is made.
“(1A) The Bank of England may also apply to the court for an order of limited disclosure in respect of those depositors of the bank who, at the time of the making of the statement of affairs, still have a claim against the bank in respect of their deposits.”.
31. Apply rule 4.041 of the 1991 Rules. For “official receiver”, substitute “Bank of England”.
32. Apply rule 4.043 of the 1991 Rules. For “official receiver”, substitute “Bank of England”.
33. Apply rule 4.046 of the 1991 Rules. For “official receiver”, substitute “Bank of England”.
(i)which functions (if any) are to be exercised by the persons appointed acting jointly, and
(ii)which functions (if any) are to be exercised by any of all of the persons appointed.
(h)the basis upon it has been proposed under rule 41, or, if the full payment resolution has yet to be passed, rule 18, that the bank liquidator’s remuneration has been fixed;
(i)an estimate of the value of the prescribed part (within the meaning of section 150A of the Order) regardless of whether—
(aa)the bank liquidator proposes to make an application to the court under section 150A(5) of that Order, or
(bb)section 150A(3) applies);
(j)whether, and if so, why, the bank liquidator proposes to make an application to court under section 150A(5) of the Order, and
(k)a summary of—
(ii)the manner in which the affairs and business of the bank not involved in the achievement of Objective 1 have, since the commencement of the bank insolvency, been managed and financed, including, where any assets have been disposed of, the reasons for such disposals and the terms upon which such disposals were made,
(iii)how the affairs and business of the bank will continue to be managed and financed, and
36. Apply rule 4.049 of the 1991 Rules. For “official receiver”, substitute “Bank of England”.
(3) In accordance with section 97(6)(d) of the 2009 Act, the liquidation committee ceases to exist at the end of the meeting if no individuals are elected as mentioned or if the resulting committee would have fewer than 3 members or an even number of members. The maximum number of committee members will be 5.
60. Apply rule 4.083 of the 1991 Rules. Delete paragraph (3).
76. Apply rule 4.099 of the 1991 Rules. In paragraph (1), leave out from “or, if” to the end.
79. Apply rule 4.102 of the 1991 Rules. Delete paragraph (3).
97. Apply rule 4.132A(13) of the 1991 Rules. Delete the reference to Rule 4.131.
110. This rule applies where the bank liquidator was appointed by a meeting of creditors.
it is shown to the court’s satisfaction that the transaction was entered into by the liquidator for the purpose of achieving Objective 1.”.
“(1) Subject to rule 4.162 of the 1991 Rules as applied by rule 117, the liquidation committee shall consist of either 3 or 5 creditors of the company, elected by the meeting of creditors held under rule 41.”
116. Apply rule 4.161 of the 1991 Rules. In paragraph (3), the reference to Article 383 of the Companies Order, shall, after that Article is repealed, be to section 323 of the 2006 Act.(14)
Committee-members' representatives
122. Apply rule 4.167 of the 1991 Rules. In paragraph (2), the reference to Article 383 of the Companies Order, shall, after that Article is repealed, be to section 323 of the 2006 Act.(15)
134. Apply rule 4.180(2) of the 1991 Rules.
185. Apply rule 4.239 of the 1991 Rules. In paragraph (b), the reference to Article 180(3) of the Companies Order should, after that Article is repealed, be to section 451 of the 2006 Act.(18)
191.—(1) Apply rule 7.07(19) of the 1991 Rules.
193. Apply rule 7.08A(20) of the 1991 Rules. Delete from “save that notice” to “State liquidator”.
202. Apply rule 7.19 of the 1991 Rules. Delete paragraph (2).
205. Apply rule 7.22 of the 1991 Rules. In paragraph (1), delete “or 337 (the equivalent in bankruptcy),”.
(b)any person stating in writing that they are a creditor of the bank to which the bank insolvency relates, and
(e)any person who is a contributory of the bank to which the bank insolvency relates, and
212.—(1) — Apply rule 7.30 of the 1991 Rules.
(a)for “company insolvency” and “liquidation”, substitute “bank insolvency”,
(3) In paragraph (2) delete “or creditors'”;
225.—(1) Apply rule 7.44 of the 1991 Rules. In paragraph (1) delete “or the official receiver”.
(a)the person in respect of whom an order is applied for is “the respondent”,
(b)“the applicable Article” is Article 200 of the Order, and
(a)“creditors” means those creditors of the bank of whom the bank liquidator is aware, or who are identified in the bank’s statement of affairs,
246. Apply rule 11.02 of the 1991 Rules. Delete paragraph (1)(b) .
247. Apply rule 11.03 of the 1991 Rules. Delete paragraph (4).
258.—(1) As provided for in paragraph 27 of Schedule 5 to the Order and paragraph 27 of Schedule 6 to the Order(22), either the Department or the Treasury may, subject to the Order and to these Rules, make regulations with respect to any matter provided for in these Rules relating to the carrying out of the functions of a bank liquidator or provisional bank liquidator, including, without prejudice to the generality of the above, provision with respect to the following matters arising in bank insolvency—
(b)the auditing of bank liquidators' accounts;
(f)the manner in which monies coming into the hands of the bank liquidator are to be handled and invested and the payment of interest on sums which, in pursuance of regulations made under this sub-paragraph, have been paid into the Insolvency Account;
(d)contain such incidental, supplemental and transitional provisions as may appear to the Department or the Treasury as necessary or expedient.
(2) Any obligation arising under a confiscation order made under Articles 4 or 5 of the Criminal Justice (Confiscations (Northern Ireland) Order 1990(23) or under Parts 2, 3 or 4 of the Proceeds of Crime Act 2002 is not provable.
269. Apply rule 12.14 of the 1991 Rules.
(2) In paragraph (2) delete “or a creditors' committee”.
These Rules set out the procedure for the bank insolvency process under Part 2 of the Banking Act 2009 (c. 1).
The main features of Bank Insolvency are that, in the event of a deposit-taking bank becoming insolvent, it enables those depositors who are eligible for compensation under the Financial Services Compensation Scheme (FSCS) to either—
(a)receive compensation for their lost deposits as soon as possible after the bank goes into bank insolvency; or
(b)have their account transferred to a different bank.
This is the first objective of the insolvency process.
The procedure can only be initiated by the Bank of England, the Financial Services Authority or the Department by application to the court. The court then makes a bank insolvency order, appointing a bank liquidator. In the initial stages, the bank liquidator is accountable to a liquidation committee formed of the FSA, the Bank of England and the FSCS.
Once the bank liquidator considers that the first objective is achieved, the liquidation committee will pass a resolution to that effect and the bank insolvency will move to the second objective which is to wind up the affairs of the bank so as to achieve the best results for the creditors as a whole.
The Rules are based and follow the same order as the Insolvency Rules (Northern Ireland)1991(24) (“the 1991 Rules”) and certain provisions of the 1991 Rules are applied to these Rules, subject to a number of general and specific modifications.
Part 2 of the Rules sets out the application process for a bank insolvency order.
Part 3 sets out the procedure for appointing a provisional bank liquidator.
Parts 4 to 8 set out the procedure concerning the creditors and contributories.
Part 9 sets out provisions concerning the bank liquidator.
Part 10 sets out provisions concerning the liquidation committee.
Parts 11– 17 set out provisions relating to the bank’s assets and other miscellaneous provisions.
Part 18 sets out court procedure and practice.
Part 19 sets out provisions re proxies and company representation.
Part 20 sets out provisions concerning the examination of persons concerned in bank insolvency.
Part 21 sets out provisions relating to the declaration of dividend,
Parts 22 and 23 set out miscellaneous and general provisions relating to the procedure.
An Impact Assessment of the effect of the Banking Act 2009 is available on HM Treasury’s website (www.hm-treasury.gov.uk).
S.I. 1989/2405(N.I. 19), section 1282 of the Companies Act 2006 (c. 46) inserted a new Article 150ZA into the Insolvency (Northern Ireland) Order 1989 providing for the payment and priority of general expenses of a winding up subject to exceptions prescribed by rules made under Article 359 of the 1989 Order. Article 359 of the Insolvency (Northern Ireland) Order 1989 was amended by the Insolvency (Northern Ireland) 1989 (Amendment) Regulations (Northern Ireland) 2002 S.R. 2002 N. 223).
The reference to FSA Rules are to the FSA’s Compensation Sourcebook (made under section 213 of the Financial Services and Markets Act 2000) (2000 c. 8).
The FSA’s Compensation Sourcebook (made under section 213 of the Financial Services and Markets Act 2000.)
Article 383 is repealed on 1 October 2009
Rule 4228 was amended by the Insolvency (Amendment) Rules (Northern Ireland) 2008 (S.R. 2008/118).
Rules 4228A to E were inserted by the Insolvency (Amendment) Rules (Northern Ireland) 2008 (S.R. 2008/118).
Article 359 of the Order, which introduces Schedule 5, was amended by section 112 of the 2009 Act to extend the powers in the Schedule to rules made under Part 2 of the latter Act