Special administration for investment banks

Background

The Investment Bank Special Administration Regulations 2011 (the Regulations), SI 2011/245 came into force on 8 February 2011 pursuant to powers contained in the Banking Act 2009 (BA 2009). The Investment Bank Special Administration (England and Wales) Rules 2011 (the Rules), SI 2011/1301 came into effect on 30 June 2011.

Following a consultation in 2016, HM Treasury published the Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017, SI 2017/443 effective from 6 April 2017 onwards. These regulations:

•
make it easier for an administrator to transfer client assets
•
strengthen the bar date mechanism
•
provide that client money claimants cannot claim interest from the general estate except in respect of any shortfall which they would have had if they had made a claim on the client money pool. This is to discourage claimants from waiting to see which estate they are likely to get more out of before making their claim
•
include a duty on the administrator to co-operate with the scheme manager of the FSCS, and
•
provide for contracts for services relating to the safe custody

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