Part VII Transfer of Banking Business
Part VII Transfer of Banking Business

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Part VII Transfer of Banking Business
  • Summary
  • Transactions qualifying as a Part VII banking business transfer
  • The role of the regulators
  • Notification requirements
  • The Role of the court
  • Reclaim fund business transfer schemes under Part VII
  • Lack of independent expert report
  • Effect of an order sanctioning Part VII transfer

Summary

As noted in Practice Note: Insurance business transfer schemes, a regime for transferring portfolios of insurance business has existed in the UK since the enactment of the Insurance Companies Act 1982 (ICA 1982).

Since Part VII of the Financial Services and Markets Act 2000 (FSMA 2000) came into force in December 2001, banking businesses in the UK have also been capable of being transferred by court order. A banking business transfer scheme under Part VII of the FSMA 2000 provides a process by which a bank may transfer the whole or part of its business, subject to compliance with prescribed conditions, without obtaining the consent of individual customers.

Transactions qualifying as a Part VII banking business transfer

Proposed transfers of banking business only fall within the scope of FSMA 2000, Pt VII (a Part VII banking business transfer) if the whole or part of the business to be transferred includes the regulated business of accepting deposits and one of the following conditions is satisfied:

  1. the whole or part of the business carried on by a UK authorised person who has permission to accept deposits is to be transferred to another body, or

  2. the whole or part of the business carried on in the UK by an authorised person who is not a UK authorised person but who