Financial Services and Markets Act 2000, section 106

Banking business transfer schemes

Part VII Control of Business Transfers

(1)A scheme is a banking business transfer scheme if it—

(a)satisfies one of the conditions set out in subsection (2);

(b)is one under which the whole or part of the business to be transferred includes the accepting of deposits; and

(c)is not an excluded scheme [F866or a ring-fencing transfer schemeF866] .

(2)The conditions are that—

(a) the whole or part of the business carried on by a UK authorised person who has permission to accept deposits (“[F847 the transferor concerned F847]”) is to be transferred to another body (“the transferee”);

(b) the whole or part of the business carried on in the United Kingdom by an authorised person who is not a UK authorised person but who has permission to accept deposits (“[F847 the transferor concerned F847]”) is to be transferred to another body which will carry it on in the United Kingdom (“the transferee”).

(3)A scheme is an excluded scheme for the purposes of this section if—

(a)[F847 the transferor concernedF847] is a building society or a credit union; or

[F867 (b)the scheme is a compromise or arrangement to which Part 27 of the Companies Act 2006 (mergers and divisions of public companies) applies.F867]

(4)For the purposes of subsection (2)(a) it is immaterial whether or not the business to be transferred is carried on in the United Kingdom.

(5) “UK authorised person” has the same meaning as in section 105.

(6) M1 “Building society” has the meaning given in the Building Societies Act 1986 .

(7) “Credit union” means a credit union within the meaning of—

(a)M2the Credit Unions Act 1979;

(b)M3the Credit Unions (Northern Ireland) Order 1985.

Read section 106 in the full Act → Definitions (3) Cases (6)

Definitions used in section 106

UK authorised person

“UK authorised person” has the meaning given in section 191G(1) ;

Defined in s.417(1) · see it in the full Act
authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
the transferor concerned

(2) In this Part, “the transferor concerned”—

(a)in the case of an insurance business transfer scheme, is to be read in accordance with section 105(2);

(b)in the case of a banking business transfer scheme, is to be read in accordance with section 106(2);

(c)in the case of a reclaim fund business transfer scheme, means the reclaim fund to whose business the scheme relates.

(d)in the case of a ring-fencing transfer scheme, means the body to whose business the scheme relates.

Defined in s.103A(2) · see it in the full Act

Cases considering section 106 (6)

Sainsbury's Bank Plc, Re

[2025] EWHC 1062 (Ch) · 1 May 2025Interprets

Interprets the jurisdictional conditions for a banking business transfer scheme, including transfer of a deposit-taking business between authorised persons. The conditions were satisfied because the transferred business included acceptance of deposits and the scheme was not excluded (see paras [55]-[56]).

Re AS LHV Pank (UK Branch) & Anor

[2023] EWHC 2100 (Ch) · 15 August 2023Defines

Defines the statutory requirements for a banking business transfer scheme. The proposed scheme satisfied those requirements. (see paras [8]-[9]) The court applied the condition covering transfer of UK business carried on by a non-UK authorised person with permission to accept deposits to a body carrying it on in the UK. That condition was satisfied. (see para [9])

Barclays Bank Plc & Ors, Re

[2019] EWHC 129 (Ch) · 29 January 2019Defines

Interprets the requirement that a banking business transfer scheme include the accepting of deposits. The court found that the scheme qualified because part of Barclays Bank PLC’s business being transferred included deposit-taking business (see paras [27]-[29]). Applies the requirement that business carried on by a UK authorised person with permission to accept deposits be transferred to another body. Barclays Bank PLC satisfied that condition (see paras [27]-[29]). Applies the exclusion of building-society, credit-union, Companies Act and ring-fencing schemes. The proposed scheme was neither an excluded scheme nor a ring-fencing transfer scheme (see paras [27]-[30]).

What each judgment says about section 106 is in the case-law panel in the full Act.

Explanatory note

201.This section enables parties to a transfer of business involving accepting deposits to apply to the court for an order sanctioning the transfer.  Subsection (1) applies the arrangements under this part to transfers of the business of authorised persons domiciled in the United Kingdom with permission to accept deposits, wherever the business is carried on.  It also applies the arrangements where an overseas firm carrying on banking business in the United Kingdom transfers its business to another firm.  However, the arrangements do not apply to transfers from building societies (for which separate arrangements exist under the Building Societies Act 1986) or credit unions or transfers falling within section 427A of the Companies Act.

All the explanatory notes for the Act

Amendments and notes

6 notes from legislation.gov.uk

Amendments

  1. F866Words in s. 106(1)(c) inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 4; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
  2. F847Words in Pt. 7 substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 2; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
  3. F867S. 106(3)(b) substituted (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(1), 3(1), Sch. 1 para. 211(2) (with arts. 6, 11, 12)

Marginal citations

  1. M11986 c. 53.
  2. M21979 c. 34.
  3. M3S.I. 1985/1205 (N.I. 12).