Barclays Bank Plc, Re

This is an application by Barclays Bank Plc (“BB”) and Barclays Bank Ireland Plc (“BBI”) for directions in connection with an application pursuant to Part VII of the Financial Services and Markets Act 2000 (“FSMA”) for the sanction of a banking business transfer scheme (the “Scheme”).

It is proposed that pursuant, or ancillary, to the Scheme, two wholly owned subsidiaries within the Barclays group will transfer a part of their business to BBI. Those entities are BB and Barclays Capital Securities Ltd (“BCSL”).

The Scheme forms part of Barclays’ planning for the continuity of service provision to its clients in the European Economic Area (“EEA”) following the withdrawal of the UK from the European Union (“Brexit”).

BB is an English incorporated public limited company. It is authorised in the UK by the PRA and regulated in the UK by the PRA and the FCA to accept deposits and conduct a wide range of other regulated activities. It currently conducts business through branches in the EEA on a freedom of establishment basis and freedom of services basis under the Capital Requirements Directive (2013/36/EU) and the Markets in Financial Instruments Directive (2014/65/EU) (“MiFID2”).

Following the sanction and completion earlier this year of the Barclays ring-fencing scheme pursuant to Part VII of FSMA (sanctioned by the Chancellor on 9 March 2018: [2018] EWHC 472 (Ch)), products and services are offered to Barclays’ larger corporate, wholesale and international banking and wealth management clients, by BB and its subsidiaries which include BCSL and BBI.

BCSL is an English incorporated private limited company. It is not licensed to accept deposits. It is, however, authorised to conduct a variety of investment business in the UK and it currently has permission under MiFID2 to carry out business on the basis of freedom of services in all the member states of the EEA.

While the terms of the UK’s withdrawal from the EU, if any, are presently unknown, this application is premised upon the assumption that, post-Brexit, BB and BCSL will no longer be authorised to conduct business in the EEA. The purpose of the Scheme, therefore, is to transfer the relevant parts of their businesses relating to EEA clients to BBI which, being an Irish incorporated company, will continue to be authorised to conduct business in the EEA post-Brexit.

The only orders that are sought from me on this application are directions as to notification of the proposed Scheme and for the adjournment of the application to a hearing before a judge of the Companies Court in January 2019 for the purposes of sanctioning the Scheme.

Ordinarily, such directions would be sought from an Insolvency and Companies Court Judge. The application has been brought before a judge of the High Court because it raises one particular, and arguably novel, issue going to the court’s jurisdiction to sanction the Scheme. The issue concerns an order, which the applicants propose to seek at the sanction hearing, that the business of BCSL be transferred to BBI pursuant to the provisions of section 112(1)(d) of FSMA. The applicants seek a view from the court as to whether the court will have jurisdiction to make that order, albeit recognising that any such view expressed on this application is without prejudice to any submissions to the contrary by any person claiming to be adversely affected by the Scheme at the sanction hearing.

The procedure for seeking the court’s prospective guidance in relation to a proposed Scheme was held to be well within the inherent jurisdiction of the Court to regulate its own procedure in Re Barclays Bank plc & ors [2017] EWHC 1482 (Ch), at [6].

If I were to conclude that there is no jurisdiction within section 112(1)(d) to effect a transfer of BCSL’s business, then the applicants will need to begin work immediately in seeking to effect agreements with a very large number of clients of BCSL, in order to replicate so far as possible, on a bilateral basis, the effect of the proposed Scheme. It is envisaged that this work will take many months and, even if commenced now, would be unlikely to be completed by 29 March 2019, the date currently envisaged for the UK’s withdrawal from the European Union. If the applicants had to wait for an answer to the jurisdiction issue until January 2019 (at the time the application to sanction the Scheme is heard) then it would be far too late to take such alternative steps. In these circumstances, I am satisfied that it is an appropriate case to give prospective guidance.

Since I am not, at this stage, concerned with whether the conditions in section 111(2) of FSMA have been satisfied or whether, in accordance with section 111(3) of FSMA, in all the circumstances of the case, it would be appropriate to sanction the Scheme, I can address the design of the Scheme very shortly. The business to be transferred pursuant to the Scheme comprises:

Transferring under the Scheme are approximately 1,100 Corporate Banking EEA clients, 4,600 Investment Banking EEA clients, and 730 Private Banking and Overseas Services clients. The total number of transferring clients is, at 5,550, slightly less than the sum of these three business lines, because some clients overlap.

According to the witness statement of Steven John Ewart, the chief financial officer of BB, there is a high degree of interconnectedness between BB’s and BCSL’s investment banking products and services that are provided to clients. In broad terms, there is one overall business, operated out of both BB and BCSL; BCSL does not operate as a standalone business but is being used as an entity through which certain transactions, managed by BB employees, are executed. In particular:

The value of that part of BCSL’s business which it is proposed is transferred to BBI is approximately £2.3 billion of external assets, which is a small fraction of the approximately €190 billion of external assets being transferred to BBI under the Scheme and wider reorganisation.

It is theoretically possible for each separate relationship between a client and BCSL to be novated to BBI but, in addition to the time, complexity and cost of such a process (requiring additional negotiations with 770 clients in respect of approximately 2,300 contracts), there is potential for serious detriment to clients through timing mis-matches (leading to clients’ business being split between the UK and Ireland). Moreover, clients would be subjected to a heightened administrative burden at a time when they would no doubt be required to undergo similar complex processes with any other investment bank with whom they transact business that was unable to take advantage of the Part VII transfer procedure. In short, the evidence indicates that there would be serious disruption to the ongoing business of BB, BCSL and their common clients if it is impossible to take advantage of section 112(1)(d) to effect a parallel transfer of BCSL’s business insofar as it relates to transferring clients of BB.

In order for a scheme to qualify as a banking business transfer scheme within section 106 of FSMA, it must be one under which “the whole or part of the business to be transferred includes the accepting of deposits” (section 106(1)(b)) and it must satisfy the condition that (in the case of a UK authorised person) “the whole or part of the business carried on by a UK authorised person who has permission to accept deposits (“the transferor concerned”) is to be transferred to another body (“the transferee”)” (section 106(2)(a)).

BB is, but BCSL is not, authorised to accept deposits. The business to be transferred by BB includes the accepting of deposits, but the business to be transferred by BCSL does not.

Accordingly, the court has jurisdiction under section 106 to sanction a scheme in respect of the transfer by BB of part of its business, but it has no jurisdiction under the section to sanction a scheme in respect of the transfer by BCSL of part of its business.

The applicants propose to overcome this problem by relying upon section 112(1)(d). It is important to see that subsection in the context of sections 111 and 112 as a whole:

The question raised for decision, in short, is whether, whatever else may properly be the subject matter of an ancillary order under section 112(1)(d), there is no jurisdiction to order the transfer of BCSL’s business to BBI. I am not asked to consider whether the court would, as a matter of discretion, make such an order on the facts of this case, that being a matter to be determined at the hearing to sanction the Scheme

Mr Moore QC, appearing for the applicants, submits that the transfer of BCSL’s business is comfortably within the ambit of section 112(1)(d). He submits that the phrase “necessary to secure that the scheme is fully and effectively carried out” is to be construed broadly, as established by a series of cases over the past two decades.

In the first of those cases, Re Hill Samuel Life Assurance Limited, unreported, 10 July 1995, Knox J had to consider whether there was power, under section 112(1)(d) to order, in connection with an insurance business transfer scheme, certain modifications to policies, including one which substituted for the President of the Actuaries Institute, as arbiter in one or more of the policies, the appointed actuary of the transferee insurance company. Knox J said of this that it was “only fairly described as for the better administration of non-transferring policies for the future and is not directly related to or consequent on the scheme as it stands”. Nevertheless, he concluded it fell within the wording of paragraph (e) of Schedule 2(C) to the Insurance Companies Act 1982 (which is in the same language as that found in section 112(1)(d) of FSMA):

“Although 'necessary' is somewhere in the middle between 'vital' on the one hand and 'desirable' on the other, if it is used in the phrase 'necessary to secure that the scheme shall be fully and effectively carried out' and it extends to consequential and supplementary matters, it would seem to me legitimate for the court to include within the ambit of a scheme which it approves something which will give the full benefit of the scheme to one or other of the two units that are being amalgamated. In that sense it seems to me that although this is certainly not a matter which is vital to the approval of the scheme - and indeed there is specific evidence to that effect - it nevertheless is something which is within the jurisdiction of the court to approve and on that basis I do approve it.”

This interpretation has been followed in a number of subsequent cases. Mr Moore QC informed me that the nature of the orders under section 112(1)(d) made in those cases (while the detail of the relevant orders is not always obvious from the judgments) included the following:

The circumstances of those cases were very far removed from the circumstances here. Each of them was concerned with variations in rights or obligations which (i) related directly to the assets being transferred under the scheme and (ii) arose as between the transferring policy holders or clients and either of the transferring company or the transferee. None of them addressed the possibility of transferring a business belonging to a third party entity.

Closer to the present case, I was referred to Re The Copenhagen Reinsurance Company (UK) Ltd [2016] EWHC 944 (Ch), in which Snowden J made an order pursuant to section 112(1)(d) imposing variations on guarantees entered into by two ALM. Brand companies in favour of the Institute of London Underwriters for the benefit of policy holders. Those guarantees provided that in the event that the transferring company (“Copenhagen Re”) was unable to make full payment to the policyholders covered by the guarantee, the relevant guarantor would pay the outstanding balance. The variation was by way of specific provision in the order sanctioning the scheme that any references in the guarantees to Copenhagen Re shall be deemed to be references to the transferee company. Snowden J rejected the contention of the guarantors that since the independent expert concluded that their failure to consent to the variation in the guarantees would not materially prejudice the policy holders, it was unnecessary to make such an order. He concluded as follows:

“41.

…Section 112 of the FSMA is a broad section that provides the court with extensive powers to facilitate the carrying out of the scheme which it has sanctioned, and in section 112(1)(d) to make orders that are supplementary to the scheme to that end. In this case, the scheme is for the transfer to Marlon of the whole of CopRe's insurance business. The writing of policies with the benefit of the ILU guarantees was an integral part of that business, and doubtless enhanced the ability of such policies to be sold on behalf of CopRe (and thus indirectly benefitted the ALM. Brand group). The continued existence of the ILU guarantees was also an integral part of the commercial benefits conferred upon the relevant policyholders of CopRe, and I accept that it was part of their legitimate expectations that such ILU guarantees should continue to be available.

42.

In such circumstances, it seems to me an entirely natural use of language, and in accordance with the overall purpose of Part VII of the FSMA, which clearly requires the court to have regard to the interests of policyholders, to conclude that the scheme would not be fully and effectively carried out if the benefit to policyholders of the ILU guarantees associated with their policies was lost as a result of the transfer.”

Mr Moore QC submits, and I accept, that the order made in Copenhagen Re varied contractual rights and obligations as between parties, neither of whom was the transferor or transferee company. Specifically, it is an example of a case where the order made directly varied the contractual obligations owed (i) by a third party (ii) to the contractual counterparties of the transferring company, and (iii) without the consent of that third party.

Since the hearing, Mr Moore QC has referred me to a judgment handed down by Snowden J on 25 October 2018 in Re AIG Europe Limited [2018] EWHC 2818 (Ch).

That case concerned a transfer of insurance business by AIG Europe Limited (“AEL”), part of the business being transferred to American International Group UK Limited (“AIGUK”) and part being transferred to a new Luxembourg company, AIG Europe SA (“AESA”). Each transfer constituted a part of a single scheme within Part VII of FSMA, because it resulted in the transfer of an insurance business to a transferee in an EEA State within the meaning of section 105 FSMA, there being no reason to restrict that section so as to exclude a scheme that involved the transfer of the insurance business in question to more than one transferee entity (see paragraph 31 of the judgment). Each transfer, however, was effected pursuant to a different statutory jurisdiction: the transfer to AIGUK was effected pursuant to an order under section 112(1)(a) of FSMA, while the transfer to AESA was effected pursuant to a cross-border merger under EU Directive 2017/1132.

One of the questions that arose for decision on the hearing to sanction the scheme was whether it was possible, under section 112(1)(d) to make orders that existing policies which covered risks both in the UK and EEA be subject to a split, so that AIGUK and AESA would have separate responsibility for the relevant risks transferred to them, but policy limits and deductibles would be aggregated between the two new policies so that policyholders would be no better or worse off after the scheme took effect.

Snowden J commented on the width of the court’s powers under section 112(1)(d), at paragraph 23 of his judgment, noting that he had stressed in his earlier decision in Copenhagen Re that “the power under section 112(1)(d) should be exercised bearing in mind that a primary purpose of Part VII FSMA is the protection of policyholders, and that the power to secure that a transfer scheme is “fully” carried out indicates that the court has the jurisdiction to go beyond the bare minimum without which an independent expert would withdraw his support for the scheme.” At paragraph 40 he concluded that the order sought in relation to the transferred policies was “plainly necessary to ensure that the Scheme is fully and effectively carried out”. At paragraph 41 he reached a similar conclusion in relation to the relevant parts of outwards reinsurance contracts covering any insurance policies which were to be split.

The actual decision is of little assistance in the present case, since although it involved the use of section 112(1)(d) to vary the obligations imposed on a third party (the outward reinsurers), those were obligations as between the reinsurers and entities which were either (pre-scheme) the transferring company or (post-scheme) each of two transferee companies under the scheme. Snowden J’s analysis was that, although the mechanism by which each of the two insurance companies received their respective parts of the business (one pursuant to section 112, and the other pursuant to a cross-border merger) they were both parts of the same scheme sanctioned pursuant to section 111. No such analysis is available here, because the transfer of BCSL’s business cannot be the subject of a scheme sanctioned under section 111.

Finally, and closer still to the present case, I was told by Mr Moore QC that David Richards J, as he then was, had on one occasion made an order under section 112(1)(d) effecting the transfer of a business belonging to a non-deposit taking subsidiary of the transferring deposit taking entity. Mr Moore QC has subsequently provided me with a copy of his skeleton argument (date 2 April 2007) for the hearing of that application, which involved the transfer of part of the banking, corporate trust and agency business carried on by JP Morgan Chase Bank N.A. (“JPM”) in the UK through its London branch, to the London branch of the Bank of New York (“BNY”). As explained in that skeleton argument:

I am assured by Mr Moore QC that David Richards J made an order as sought in the passages in the skeleton argument I have set out above. It is not clear that any judgment was delivered on the occasion of sanctioning that scheme; no record of any such judgment has been provided to me. I am therefore in the dark as to the extent, if any, to which David Richards J considered or addressed the jurisdiction issue that is before me. Aside from the comfort that might be drawn from the fact that a judge highly experienced in this area saw fit to make an order transferring part of the business of an entity other than the transferring entity, notwithstanding that it did not satisfy the requirements of section 106 because its business did not include accepting deposits, the mere fact that the order was made in the JPM case does not constitute authority of even persuasive value for the order sought in this case.

Accordingly, it is necessary to consider the matter from first principles. In the absence of any person appearing so as to put forward arguments in opposition to the application, there appeared to me to be three potential objections to it, which I need to consider:

Impossibility of using section 112(1)(d) to effect the transfer of a different (non-deposit taking) entity’s business

A scheme does not fall within section 111 unless the “transferor concerned” has permission to accept deposits and the whole or part of the business to be transferred includes the accepting of deposits (see section 106). Where the scheme falls within section 111, the transfer of business may be effected by a court order which has the result of vesting property of the transferring entity in the transferee and transferring the liabilities of the transferring entity to (so that they become the liabilities of) the transferee: see section 112(1)(a) and section 112(3).

Mr Moore QC submits, and I accept, that while the satisfaction of the requirements in section 106 are necessary in order for the scheme to qualify for sanction under section 111, the content of the scheme to be sanctioned is not limited to the transfer of the transferring entity’s deposit taking business. Section 106(1)(b) expressly contemplates that part only of the transferred business includes the accepting of deposits. I also accept that, on a plain reading of the provisions, when considering whether a particular order under section 112(1)(d) is necessary to secure that “the scheme” is fully effective, what is meant is the scheme as a whole, and not merely that part of it which involves the transfer of a deposit taking business.

In the case of a bank that either has no, or is transferring no, deposit taking business, however, such that it cannot satisfy the requirements of section 106 and whose scheme would therefore not qualify for sanction under section 111, there is no legal mechanism for transferring its business (other than a series of novation agreements with each of its clients and the transferee, or the route which is the subject matter of the jurisdiction issue raised for decision on this application). While it is legally possible (subject only to issues of third party consents) for a bank to transfer its assets to another entity, it is legally impossible to effect a unilateral transfer of its liabilities. Prior to the enactment of section 111, in the absence of agreement with each client, a transfer of banking business could only be achieved by a private Act of Parliament. (A scheme of arrangement under what is now part 26 of the Companies Act 2006 might present at least a theoretical alternative, but would be likely to face insurmountable difficulties in the context of the transfer of an investment banking business.)

Put at its highest, therefore, the objection is that since (i) jurisdiction to make an order transferring a bank’s business exists only in relation to a scheme sanctioned under section 111, and (ii) the jurisdiction under that section cannot be exercised in relation to a bank which was not authorised to accept deposits or in relation to a transfer of a business which did not include deposit taking, whatever else Parliament intended by section 112(1)(d) it did not intend it to extend to ordering such a transfer. In other words, section 112(1)(d) cannot be used to order, by the back door, that which cannot be ordered in relation to BCSL under sections 111 and 112(1)(a).

Against this, Mr Moore QC submits that there is no limitation, as a matter of jurisdiction, on the kind of order which the court can make under section 112(1)(d) other than that it must be “necessary to secure that the scheme is fully and effectively carried out”. The following points can be made in support of that submission.

First, the opening words of section 112 are sufficiently broad to encompass any kind of order: “such provision (if any) as [the court] thinks fit”.

Second, the subsection contains a sufficient mechanism to limit its scope (in the language: “necessary to secure…”) such that there is no need to impose any other limitation on the scope of the orders that can be made. Moreover, to the extent that the purpose of the provision is to protect the interests of clients of the bank (c.f. the Copenhagen Re case, where it was said that the overall purpose of Part VII, in the context of an insurance business transfer scheme, required the court to have regard to the interests of policyholders), the requirement in section 111(3) that the court be satisfied that it is appropriate in all the circumstances to sanction the scheme and the fact that the court in any event has a discretion, under section 111(1), in deciding to sanction a scheme, are together sufficient for that purpose without the need to cut down the breadth of possible orders available under section 112(1)(d).

Third, it may be said that the objection is given superficial attraction by focusing on the concept of the transfer of a “business”, whereas if the focus is instead on the constituent elements that make up such a transfer, and the orders required to give effect to them, then there is sufficient support in the existing authorities to justify the use of section 112(1)(d) for that purpose.

As I have already noted, the principal constituent elements in the transfer of a business are an order transferring assets, and an order transferring liabilities. At their heart, such orders involve modification of contractual rights and obligations of third parties. For example, the transfer of liabilities involves modification of the rights of third parties by imposing on them the obligation to accept performance by the transferee in place of the transferor. Such orders lie at the heart of a transfer of the business of the transferring entity under section 112(1)(a), insofar as the rights exist as against the transferring entity. The question is whether – by a supplementary order under section 112(1)(d) – counterparties of the transferring entity can be subjected to such modification in connection with their rights against a third party.

The Copenhagen Re decision suggests that they can. The order made in that case under section 112(1)(d) modified the affected policy holders’ rights as against third party guarantors. On the one hand, it provided policy holders with a new and different right as against the guarantors and, on the other hand, it imposed a new and different obligation on the guarantors. It is true that the modification was clearly for the benefit of the policy holders, and that the contention from the guarantors that this should not be done was viewed as an opportunistic attempt to terminate contractual obligations undertaken by them. These points, however, go to the discretion whether to make an order. What is important for present purposes is that it was not thought that making an order which (a) altered the contractual rights of policy holders as against a third party and (b) imposed a different contractual obligation on that third party, as against the policy holders was outside the ambit of section 112(1)(d).

On the basis of the points made in paragraphs 41 to 45 above, and recognising I have heard no argument against the case advanced by the applicants, I accept the submission of Mr Moore QC that the limitations on the scope of orders that can be made under section 112(1)(d) are to be found within it, namely that such an order must be incidental, consequential or supplementary to the scheme, and must be necessary to secure that the scheme is fully and effectively carried out.

Accordingly, I consider that section 112(1)(d) is sufficiently broad in scope to permit the court to make orders which modify the contractual and other rights as between clients of the business of BB which is transferred under the Scheme and a third party such as BCSL, provided that the requirements of the sub-paragraph itself are met. In this way, the jurisdiction under the section is broad enough to include orders having the effect of transferring the relevant part of the business of BCSL to BBI.

Necessary to secure that the scheme is fully and effectively carried out.

One of the matters for the court to determine on the basis of the evidence adduced on the application to sanction the Scheme will be whether the degree of interconnectedness between clients’ relationships with BB and with BCSL, and the consequences of not making an order under section 112(1)(d) transferring BCSL’s business, are in fact sufficient to persuade the court to exercise its discretion to make such an order. At this stage, the only question for me is whether – on the assumption that the evidence at the sanction hearing is sufficient – the order sought would nevertheless be incapable of falling within the meaning of “necessary to secure that the scheme is fully and effectively carried out”.

The potential objection is that the transfer of assets and liabilities from BB to BBI will be fully and effectively carried out irrespective of whether any part of BCSL’s business is also transferred to BBI. In other words, irrespective of whether BCSL’s business is transferred, BBI will as a result of the Scheme be able to exercise all rights and obligations that BB exercised prior to the Scheme. It is just that in the event of a no-deal Brexit such that BB and BCSL cease to be authorised to conduct business in the EEA, then even though BBI will be able to perform the functions previously performed by BB, the inability of BCSL to perform its obligations owed to the clients (formerly of BB, now of BBI) may create insuperable difficulties in the performance of obligations owed by BBI to those clients and/or the closing out of transactions between those clients and BBI.

In my judgment, this objection focuses too narrowly on the legal mechanics of the transfer of BB’s business at the expense of the commercial purpose and intended effect of the transfer.

As Knox J said in the Hill Samuel case (above), section 112(1)(d) enables the court to make an order “which will give the full benefit of the scheme to one or other of the two units that are being amalgamated”. Similarly, Henderson J in Re Alliance & Leicester plc held that it would be “necessary” to take a step if it would enable the scheme to be implemented “in an effective and commercially sensible way”.

The purpose of the Scheme in this case is to enable the business currently conducted by BB to be carried on seamlessly in the event of BB’s loss of authorisation to conduct business in the EEA post-Brexit. For the purposes of determining whether the transfer of BB’s business can be fully and effectively carried out, it is essential to consider whether it will result in BBI being able to conduct, as a matter of practical reality, the business currently carried on by BB. If, as the evidence suggests, that will not be possible in the event of a no-deal Brexit (without the considerable expense and potential difficulties inherent in multiple bilateral agreements with each affected client), but it could be achieved by a transfer of BCSL’s business to BBI, then the order sought could be described as “necessary” within the meaning of section 112(1)(d).

Alternatively, looking at it from the perspective of BB’s clients (whose interests the court is required to take into account), they have conducted business seamlessly with BB and BCSL as if under one umbrella relationship. Unless their contractual relationships with BCSL are also transferred to BBI, they will be likely to suffer prejudice in relation to their dealings with BBI as a result of the inability of BCSL to conduct business in the EEA.

Accordingly, I am satisfied that – on the assumption referred to in paragraph 48 above – that the transfer of BCSL’s business is capable of being “necessary to secure that the scheme is fully and effectively carried out”.

Incidental, consequential or supplementary

Whether a particular matter can be described as “incidental”, “consequential” or “supplementary” to the scheme sanctioned under section 111 is a fact sensitive enquiry. Accordingly, as with the potential second objection, the only question for me at this stage is whether the transfer of a part of BCSL’s business is incapable of being so described.

While the nature of the order sought is far removed from the nature of the orders made in earlier cases (save only that made in the JPM case), and it is much easier to describe the orders in those cases as “incidental”, “consequential” or “supplementary”, I do not regard it as impossible to describe the transfer of BCSL’s business as such in the context of this case. If (as I have assumed in relation to the second objection) BBI would be in practice unable to service the requirements of the transferring clients of BB unless BCSL’s business was also transferred, then I consider then while it may be difficult to describe the order sought as “incidental”, it would not be a mis-use of language to describe it as “consequential” or “supplementary”.

For the above reasons, I conclude that an order to transfer the business of BCSL to BBI is capable of falling within the jurisdiction of section 112(1)(d). Whether it would be proper to make such an order in this case is a matter to be determined on the basis of the facts as presented at the hearing to sanction the scheme. My conclusion, having been reached in the absence of contrary argument, is expressly without prejudice to any submissions to the contrary that might be made at the sanction hearing.

The principal direction sought is for the publishing of a notice in a variety of publications. These include – but go beyond – the bare minimum required by regulations 5(2) and 5(3) of the Financial Services and Markets Act 2000 (Control of Business Transfers) (Requirements on Applicants) Regulations 2001, of publishing notices in the Gazettes in London, Edinburgh and Belfast and in two national newspapers. The form of the notice has been approved by the PRA. Accordingly, I will make the direction sought.

A number of subsidiary matters relating to the Scheme were canvassed in Mr Moore QC’s skeleton and at the hearing, including as to the proportion of contracts governed by English law (over 65%) and the steps taken, and to be taken, to engage with clients in relation to the proposed Scheme. These are matters that may be relevant to the court’s consideration of the Scheme at the sanction hearing. No order or direction is sought in connection with them from the court at this stage and, in those circumstances, I propose to say nothing further about them.