Financial Services and Markets Act 2000, section 106B

Ring-fencing transfer scheme

Part VII Control of Business Transfers

(1)A scheme is a ring-fencing transfer scheme if it—

(a)is one under which the whole or part of the business carried on—

(i)by a dfnUK authorised person, or

(ii)by a qualifying body,

is to be transferred to another body (“the transferee”),

(b)is to be made for one or more of the purposes mentioned in subsection (3), and

(c)is not an excluded scheme or an insurance business transfer scheme.

(2) “Qualifying body” means a body which—

(a)is incorporated in the United Kingdom,

(b)is a member of the group of a dfnUK authorised person, and

(c)is not itself an authorised person.

(3)The purposes are—

(a)enabling a UK authorised person to carry on core activities as a ring-fenced body in compliance with the ring-fencing provisions;

(b)enabling the transferee to carry on core activities as a ring-fenced body in compliance with the ring-fencing provisions;

(c)making provision in connection with the implementation of proposals that would involve a body corporate whose group includes the body corporate to whose business the scheme relates becoming a ring-fenced body while one or more other members of its group are not ring-fenced bodies;

(d)making provision in connection with the implementation of proposals that would involve a body corporate whose group includes the transferee becoming a ring-fenced body while one or more other members of the transferee's group are not ring-fenced bodies.

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

(a)the body to whose business the scheme relates is a building society or credit union, or

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

(5)For the purposes of subsection (1)(a) it is immaterial whether or not the business to be transferred is carried on in the United Kingdom.

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

(7) “Building society” and “credit union” have the same meanings as in section 106.

(8) “The ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G. F869]

Read section 106B in the full Act → Definitions (7) Cases (3)

Definitions used in section 106B

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
group

(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—

(a)a parent undertaking of A;

(b)a subsidiary undertaking of A;

(c)a subsidiary undertaking of a parent undertaking of A;

(d)a parent undertaking of a subsidiary undertaking of A;

(e)an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;

(f)if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or

(g)if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).

Defined in s.421(1) · see it in the full Act
core activities

“core activities” has the meaning given in section 142B;

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

(1) References in this Act to a “core activity” are to be read in accordance with this section.

Defined in s.142B(1) · see it in the full Act
ring-fenced body

(2) But “ring-fenced body” does not include—

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

(b)a dfnUK institution of a class exempted by order made by the Treasury.

Defined in s.142A(2) · see it in the full Act

“ring-fenced body” has the meaning given in section 142A;

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

(1) In this Act “ring-fenced body” means a UK institution which carries on one or more core activities (see section 142B) in relation to which it has a Part 4A permission.

Defined in s.142A(1) · see it in the full Act
body corporate

“body corporate” includes a body corporate constituted under the law of a country or territory outside the United Kingdom;

Defined in s.417(1) · see it in the full Act
ring-fencing rules

“ring-fencing rules” has the meaning given in section 142H;

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

Cases considering section 106B (3)

Santander UK Plc v Abbey National Treasury Services Plc

[2019] EWHC 111 (Ch) · 25 January 2019Defines

The court interpreted the definition of a ring-fencing transfer scheme and concluded that the proposed transfers and purposes satisfied it. (see paras [24]-[29])

Lloyds Bank Plc & Ors R(ring-fencing transfer scheme) (Rev 1)

[2018] EWHC 1034 (Ch) · 3 May 2018

Applied to determine that the Scheme was a ring-fencing transfer scheme made for statutory ring-fencing purposes and to identify the relevant statutory purpose for the adverse-effect assessment. (see paras [18]-[20], [139], [204])

Barclays Bank Plc And Woolwich Plan Managers Ltd, Re

[2018] EWHC 472 (Ch) · 9 March 2018Defines

Defines the statutory purposes for which a ring-fencing transfer scheme may be made. The scheme was sanctioned as enabling compliance with the ring-fencing regime.

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

Amendments and notes

1 notes from legislation.gov.uk

Amendments

  1. F869S. 106B inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 5; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1