Friday 6 November 2015

UK: A legal framework for "transformer vehicles" - the first steps

The Bank of England and Financial Services Bill, which received its second reading in the House of Lords at the end of October, begins committee stage next Monday. A marshalled list of the amendments to be moved at this stage has been published: see here or here (pdf). One of the amendments being moved by the Government will add a new section to the Financial Services and Markets Act 2000 and its purpose is to give HM Treasury the power, through secondary legislation, to create a framework for companies described as "transformer vehicles". A protected cell regime is clearly envisaged: the proposed new section makes clear that secondary legislation can include provisions for the vehicle to comprise different parts having their own legal personality separate from that of the vehicle. Here is the formal definition of "transformer vehicle" contained in the amendment:

Note: The Bill also makes changes to the governance of the Bank of England, including the creation of a Prudential Regulation Committee, and also extends the reach of the Senior Managers Regime. Further information is available in the explanatory notes that have been published to accompany the Bill: see here or here (pdf). A copy of the Bill as introduced is available here or here (pdf). The progress of the Bill can be followed here.

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