IE-2011-act-27 — Central Bank and Credit Institutions (Resolution) Act 2011 | Law Reform

PART 1 Preliminary 1 .— (1) This Act may be cited as the Central Bank and Credit Institutions (Resolution) Act 2011. (2) This Act and the Central Bank Acts 1942 to 2010 may be cited together as the Central Bank Acts 1942 to 2011. (3) This Act comes into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to a particular purpose or provision and different days may be so appointed for different purposes or different provisions. 2 .— (1) In this Act— “Act of 1942” means the Central Bank Act 1942 ; “Act of 1963” means the Companies Act 1963 ; “Act of 1971” means the Central Bank Act 1971 ; “Act of 2008” means the Credit Institutions (Financial Support) Act 2008 ; “Act of 2010” means the Credit Institutions (Stabilisation) Act 2010 ; “articles of association” includes— ( a ) in the case of a credit institution that is established by charter, its bye-laws, ( b ) in the case of a credit institution that is a credit union, its rules, and ( c ) in the case of a credit institution that is a building society, its rules; “Assessor” has the meaning given by section 36 ; F1 [ "authorised credit institution" means a credit union; ] “Bank” means the Central Bank of Ireland; “bridge-bank” has the meaning given by section 17 ; “building society” means a building society incorporated under the Building Societies Act 1989 , or deemed pursuant to section 124(2) of that Act to be so incorporated; “charge” includes— ( a ) a mortgage, judgment mortgage, charge, lien, pledge, hypothecation or other security interest or encumbrance or collateral in or over any property, ( b ) an assignment by way of security, and ( c ) an undertaking or agreement by any person (including a solicitor) to give or create a security interest in property; “CIWUD Directive” means Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 1 ; “Court” means the High Court; F1 [ "credit institution" means a credit union; ] “credit union” means a society registered as such under the Credit Union Act 1997 , including a society deemed to be so registered by virtue of section 5(3) of that Act; F2 [ "designated credit institution" means — ( a ) a bank authorised (or deemed to be authorised by the European Central Bank on application therefor) under section 9 of the Act of 1971, ( b ) a building society authorised (or deemed to be authorised by the European Central Bank on application therefor) under section 17 of the Building Societies Act (No. 17 of 1989), or ( c ) a credit union; ] “enactment” means— ( a ) an Act of the Oireachtas, ( b ) a statute that was in force in Saorstát Éireann immediately before the date of the coming into operation of the Constitution and that continues in force by virtue of Article 50 of the Constitution, or ( c ) an instrument made under— (i) an Act of the Oireachtas, or (ii) a statute referred to in paragraph (b) ; “functions” includes powers, duties, rights and entitlements, and references to the performance of a function include reference to— ( a ) in relation to a power, the exercise of the power, ( b ) in relation to a duty, the performance of the duty, and ( c ) in relation to a right or entitlement, the exercise of the right or entitlement; “Fund” has the meaning given by section 10 ; “Governor” means the Governor of the Bank; “holding company” means a holding company (within the meaning of section 155 of the Act of 1963) or a parent undertaking (within the meaning given by the European Communities (Companies: Group Accounts) Regulations 1992 ( S.I. No. 201 of 1992 )); “interest”, in relation to an asset or liability, means— ( a ) the whole or any part or fraction of the asset or liability, ( b ) any other estate in, right or title to, or interest in the asset or liability (whether legal or beneficial), or ( c ) any interest, other than a legal or beneficial interest, in the asset or liability; “intervention conditions” shall be construed in accordance with section 9 ; “memorandum of association” includes the charter of a credit institution that is established by charter; “Minister” means the Minister for Finance; F2 [ "recognised credit institution" means a person authorised in the State to accept deposits or other repayable funds from the public and to grant credit on its own account; ] “regulated market” has the same meaning as in the European Communities (Markets in Financial Instruments) Regulations 2007 ( S.I. No. 60 of 2007 ); “Regulations of 2011” means the European Communities (Reorganisation and Winding-Up of Credit Institutions) Regulations 2011 ( S.I. No. 48 of 2011 ); “security” includes— ( a ) a charge, ( b ) a mortgage, ( c ) a guarantee, indemnity or surety, ( d ) a right of set-off, ( e ) a debenture, ( f ) a bill of exchange, ( g ) a promissory note, ( h ) collateral, ( i ) any other means of securing— (i) the payment of a debt, or (ii) the discharge or performance of an obligation or liability, and ( j ) any other agreement or arrangement having a similar effect; “special management order” has the meaning given by section 58 ; “special manager” means a person appointed as such by a special management order; “subsidiary” means a subsidiary (within the meaning given by section 155 of the Act of 1963) or a subsidiary undertaking (within the meaning given by the European Communities (Companies: Group Accounts) Regulations 1992 ( S.I. No. 201 of 1992 )); “transfer order” has the meaning given by section 30 . (2) A reference in this Act to an agreement is a reference to— ( a ) an instrument (however described) that creates or purports to create an obligation, whether made in writing or under seal, including but not limited to an instrument described as an arrangement, undertaking, scheme, licence, security or obligation, or ( b ) an oral agreement that creates or purports to create an obligation, including but not limited to an obligation of any kind referred to in paragraph (a) . (3) In this Act— ( a ) a reference to an asset includes an interest in an asset, and ( b ) a reference to a liability includes an interest in a liability. (4) A reference in this Act to disposing of an asset or liability includes selling or otherwise transferring, and creating a security or equitable interest in, the asset or liability. (5) For the purposes of subsection (4) “transfer” includes— ( a ) any form of legal or beneficial transfer, including a vesting by operation of law, ( b ) a synthetic transfer, ( c ) a risk transfer, ( d ) a novation, ( e ) an assignment, ( f ) an assumption, ( g ) sub-participation, ( h ) sub-contracting, and ( i ) any other form of transfer, acquisition, assumption or vesting recognised by law. (6) A reference in this Act to the preservation of the financial position of an authorised credit institution shall be taken to include the need for that credit institution to comply with such one or more of the following as apply to it— ( a ) an order made in relation to it under this Act, ( b ) a requirement imposed on it under section 22 , ( c ) the European Communities (Capital Adequacy of Credit Institutions) Regulations 2006 ( S.I. No. 661 of 2006 ). 3 .— (1) In this section “relevant institution” has the same meaning as in the Act of 2010. (2) Subject to subsection (3) , while the Act of 2010 is in operation, an authorised credit institution that is a relevant institution within the meaning of that Act shall be taken not to be an authorised credit institution. (3) If an order under section 55 of the Act of 2010 is in operation the effect of which is that the relevant institution is taken not to be a relevant institution for the purposes of every provision of that Act, that relevant institution shall, for the purposes of subsection (2) , be taken not to be a relevant institution. 4 .— The purposes of this Act are— ( a ) to provide an effective and efficient resolution regime for authorised credit institutions that are failing or are likely to fail, ( b ) to provide for a resolution regime for such credit institutions that is effective in protecting the Exchequer, the stability of the financial system and the economy, ( c ) to provide for the taking of measures to maintain public confidence in the financial system in the State, including to protect the interests of depositors in such authorised credit institutions, and depositors generally, ( d ) to secure, to the extent possible in the circumstances, the continuity of banking services generally and in particular in relation to authorised credit institutions that are failing or are likely to fail, ( e ) to facilitate the orderly winding-up of an authorised credit institution that is insolvent, ( f ) to provide a mechanism to prevent the financial instability, or threat to the financial stability, of an authorised credit institution contributing to financial instability of any other authorised credit institution, the financial system or the economy, and to avoid creating a risk of such financial instability, ( g ) to facilitate the re-organisation of, or the preservation or restoration of the financial position of, an authorised credit institution that is failing or is likely to fail, and ( h ) to provide the Bank with the necessary powers for the purposes set out in paragraphs (a) to (g) and to provide a framework within which the Bank can exercise those powers consistently with its legal obligations, including the legal obligations arising pursuant to the Treaty on European Union and the Treaty on the Functioning of the European Union. PART 2 General matters in relation to resolution powers 5 .— (1) The Governor is responsible for the exercise of the functions of the Bank under this Act. (2) The Governor may delegate any of the functions referred to in subsection (1) to a Head of Function (within the meaning given by section 2 of the Act of 1942) or an officer or employee of the Bank. (3) The Governor, in delegating any function referred to in subsection (1) , shall endeavour to ensure that the performance of that function is operationally separate from the regulatory and supervisory responsibilities of the Bank. 6 .— Nothing in this Act prevents the performance by the Governor or the Bank of their functions in relation to any credit institution authorised or regulated in the State, or affects any obligation arising under the treaties governing the European Union or the European Communities (within the meaning given by section 1 of the European Communities Act 1972 ) or the ESCB Statute (within the meaning given by section 2 of the Act of 1942). 7 .— In performing a function or exercising a power under this Act, the Minister and the Bank shall have regard to the laws of the European Union (including those governing State aid) and any relevant guidance issued by the Commission of the European Union. 8 .— Before performing a function in relation to an authorised credit institution that carries on business in a jurisdiction other than that of the State, whether it carries on that business itself or through one or more subsidiaries, the Bank shall, to the extent that it can do so, having regard to the purposes of this Act, inform the authority duly authorised to perform functions similar to any one or more of the statutory functions of the Bank of its intention to exercise the power. 9 .— (1) The intervention conditions are fulfilled in relation to an authorised credit institution if— ( a ) either condition A or condition B is fulfilled, ( b ) conditions C and D are both fulfilled, and ( c ) the Bank has consulted the Minister. (2) Condition A is that the Bank has serious concerns relating to the financial stability of the authorised credit institution concerned and— ( a ) directs that credit institution to take particular action to address the Bank’s concerns, and the Bank is satisfied that— (i) the credit institution has failed to comply fully with the direction under this paragraph, or (ii) the credit institution is incapable of taking the necessary action to so comply within the period specified by the Bank in that direction, or ( b ) is satisfied that, having regard to the urgency of the situation or for any other reason, its serious concerns cannot be adequately addressed by such a direction. (3) Condition B is that the Bank is satisfied that there is a present or imminent serious threat to the financial stability of the authorised credit institution concerned or the financial system in the State. (4) Condition C is that the Bank is satisfied that the authorised credit institution concerned has failed or is likely to fail to meet a regulatory requirement imposed by law or a requirement or condition of its licence or authorisation. (5) Condition D is that having regard to the purposes of this Act, any guidelines issued by the Bank under section 107 and such of the matters set out in subsection (6) as appear to the Bank to be relevant in the circumstances, the immediate winding-up of the authorised credit institution concerned is not in the public interest. (6) The matters referred to in subsection (5) are the following: ( a ) whether the authorised credit institution concerned is of systemic importance to the economy of the State; ( b ) whether the failure of that credit institution would be likely to contribute to instability of the banking system or serious damage to the financial system in, or the economy of, the State; ( c ) the importance of ensuring that the depositors of that credit institution will continue to have prompt access to their deposits (whether in that credit institution or elsewhere); ( d ) the importance of maintaining public confidence in the financial system in the State; ( e ) the importance of maintaining continuity of banking services to that credit institution’s customers; ( f ) the terms of any resolution plan for that credit institution; ( g ) any other matters that the Bank considers relevant, in the particular circumstances, having regard to its duties and obligations. PART 3 Credit Institutions Resolution Fund 10 .— (1) A fund, to be known as the Credit Institutions Resolution Fund and referred to in this Act as “the Fund”, is established. (2) The purpose of the Fund is to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, an authorised credit institution, and in particular— ( a ) F3 [ … ] ( b ) to provide funds for any payment required pursuant to section 37 (1), 42 (5), F4 [ 46, ] 48 or 98 , ( c ) with the written consent of the Minister, to provide capital for a bridge-bank, and ( d ) to meet the Bank’s expenses in discharging its functions under this Act. (3) The Fund shall be constituted by— ( a ) the contributions made by authorised credit institutions pursuant to section 13 , ( b ) any sums paid into it by the Minister pursuant to section 12 , ( c ) any assets of a bridge-bank transferred to it pursuant to section 17 (6) , and ( d ) interest on those sums, contributions and assets. (4) F5 [ Subject to section 11(3) , the Bank ] shall not provide any funds to the Fund from its own resources. 11 .— (1) The Bank shall manage and administer the Fund. (2) The Bank shall determine the rate of interest payable from time to time on money standing to the credit of the Fund. F6 [ (3) Notwithstanding section 10(4) , the Bank shall from time to time pay interest at the rate determined under subsection (2) on monies standing to the credit of the Fund. ] 11A . — (1) The Bank shall cause — ( a ) to be kept for the Fund, in such form as the Minister approves, all proper and usual accounts of income and expenditure, and ( b ) the transmission of those accounts not later than 3 months following the end of the financial year to which they relate to the Comptroller and Auditor General for audit. (2) The Comptroller and Auditor General shall audit the accounts of the Fund transmitted to him or her under subsection (1) and shall prepare a written report in relation to those accounts. (3) Within one month of the completion of the audit referred to in subsection (2) , the Bank shall present a copy of the accounts and the report of the Comptroller and Auditor General on the accounts to the Minister who shall, as soon as may be, cause copies thereof to be laid before each House of the Oireachtas. ] F8 [ 12 . — (1) The Minister, following consultation with the Bank, may contribute to the Fund such sums as the Minister considers appropriate, from the Central Fund or the growing produce of the Central Fund. (2) The Minister is entitled to be reimbursed from the Fund for all contributions under subsection (1) together with any interest, at the rate determined under section 11(2) , that may have accrued on those contributions at the rate determined. (3) All sums paid out of the Fund in repayment of a contribution under subsection (2) shall be paid into the Central Fund. ] 13 .— (1) Authorised credit institutions shall contribute to the Fund in accordance with regulations made under section 15 . (2) An authorised credit institution shall not carry on the business of a credit institution unless it contributes to the Fund in accordance with subsection (1) . 14 .— (1) An authorised credit institution that contravenes section 13 (2) commits an offence and is liable— ( a ) on summary conviction, to a class A fine, or ( b ) on conviction on indictment, to a fine not exceeding €250,000. (2) If an offence under this section is committed by an authorised credit institution, and is proved to have been committed with the consent or connivance, or to be attributable to any wilful neglect, of a person who, when the offence is committed, is— ( a ) a director, manager, secretary or other officer of the authorised credit institution or a person purporting to act in that capacity, or ( b ) a member of the committee of management or other controlling authority of the authorised credit institution or a person purporting to act in that capacity, that person is taken to have also committed an offence and may be proceeded against and punished in accordance with subsection (3) . (3) A person referred to in subsection (2) is liable— ( a ) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 12 months, or both, or ( b ) on conviction on indictment, to a fine not exceeding €250,000 or to imprisonment for a term not exceeding 3 years, or both. F9 [ (4) Summary proceedings for an offence under this section may be brought and prosecuted by the Bank. ] 15 .— (1) The Minister shall make regulations prescribing the rate of contribution, or a method of calculating the rate of contribution, to the Fund by an authorised credit institution. (2) In making regulations under subsection (1) , the Minister shall have regard to— ( a ) the need for the Fund to grow, over time, to a size commensurate to the costs that might be incurred in carrying out resolution activities under this Act and any other obligation of the Fund, and ( b ) the need for the rate of contribution by an authorised credit institution or class of such credit institutions to be consistent with maintaining the financial viability and sustaining the commercial position of such credit institutions. (3) Regulations under subsection (1) may prescribe different rates, or different methods of calculating rates, of contribution for different authorised credit institutions or different classes of such credit institutions, according to— ( a ) the nature, scale and complexity of the business of each such credit institution or class, and the level of risk associated with each such credit institution or class, ( b ) the level of capital and liquidity of each such credit institution or class, ( c ) the adequacy of the internal controls of each such credit institution or class, including procedures relating to risk management and mitigation and arrangements for financial stabilisation, and ( d ) the capacity of each such credit institution or class to make the proposed contribution. (4) The Minister may by regulations make provision for the administration and operation of the Fund. 16 .— If the Minister proposes to make regulations under section 15 , he or she— ( a ) shall consult with the Bank, in particular in relation to the matters set out in section 15 (3) , ( b ) shall have regard to any advice of the Bank in relation to those matters, ( c ) shall consult with the Credit Union Advisory Committee (within the meaning of section 180 of the Credit Union Act 1997 ) where the proposed regulations relate to credit unions, and ( d ) may have regard to such other matters as he or she or the Bank considers appropriate. PART 4 Bridge-banks 17 .— (1) For the purposes of this Act and in particular for holding assets or liabilities transferred pursuant to a transfer order, the Bank may cause to be formed and registered under the Companies Acts a private company limited by shares if, in the opinion of the Bank, having regard to such of the matters set out in section 9 (6) as appear to the Bank to be relevant in the circumstances, to do so would be in the public interest. (2) A company formed pursuant to this section is referred to in this Act as a bridge-bank. (3) A bridge-bank shall be wholly owned by the Bank or a nominee or nominees of the Bank. (4) The Bank shall not provide capital to a bridge-bank from its own resources, but may use the Fund for the purpose of providing such capital. (5) A bridge-bank may hold assets and liabilities on a temporary basis, with a view to their transfer to another person as soon as practicable. (6) Any surplus assets, after all liabilities have been discharged, arising on the winding-up of a bridge-bank shall be transferred to the Fund. 18 .— (1) A bridge-bank shall be taken to hold a licence (within the meaning given by section 7(1) of the Act of 1971). (2) The Bank may exercise all of its powers under the F10 [ supervisory EU legal acts ] (within the meaning given by the Act of 1942) in relation to a bridge-bank. 19 .— (1) The Bank, may by regulations make provision in relation to the formation, administration and operation of bridge-banks, including the effective operation of bridge-banks in relation to the exercise of the powers conferred by Part 5 . (2) Before making a regulation under subsection (1) , the Bank shall consult the Minister and for that purpose shall provide the Minister with a draft of the proposed regulation. (3) Regulations made by the Bank under this section may contain such incidental, supplementary and consequential provisions as appear to the Bank to be necessary or expedient for the purposes of the regulations. PART 5 Transfer of assets and liabilities 20 .— (1) In this Part— “financial incentive” shall be construed in accordance with section 46 ; “market value”, in relation to assets and liabilities, shall be construed in accordance with section 28 . (2) A reference in this Part to the transferor in relation to a transfer order shall be construed as a reference to the authorised credit institution, or a subsidiary or holding company of the authorised credit institution, the assets or liabilities of which are to be transferred pursuant to the order. 21 .— (1) The Bank may make a proposed transfer order in relation to an authorised credit institution, or a subsidiary or holding company of an authorised credit institution, if it decides that— ( a ) the intervention conditions are fulfilled in relation to that credit institution, and ( b ) having regard to any adverse consequences that may arise as a result of the transfer order, in relation to the interests generally of the creditors of the transferor or, where the transferor is a subsidiary or holding company, in relation to the interests generally of the creditors of the transferor or the authorised credit institution concerned, a transfer order is necessary in all the circumstances to address one or more of the reasons for those intervention conditions being fulfilled. (2) Nothing in subsection (1)(b) requires the Bank to consider the possible adverse consequences of the transfer order concerned on the interests of a particular creditor or class of creditors of the transferor or authorised credit institution, as the case may be, or to consider any submission made by a creditor on behalf of that creditor, a class of creditors or creditors generally. 22 .— (1) The Bank may, at any time, by written notice impose a requirement on an authorised credit institution, any of its subsidiaries or its holding company, if the Bank is of the opinion that it is necessary or desirable to do so for the effective or efficient making of a proposed transfer order or of a transfer order. (2) The requirements that may be imposed under this section include the following: ( a ) to provide such information concerning the assets and liabilities of the authorised credit institution, or any of its subsidiaries or its holding company, as the Bank requires to permit the effective and efficient making of a proposed transfer order; ( b ) to disclose such information about the assets and liabilities of the authorised credit institution, or any of its subsidiaries or its holding company, as the Bank requires to one or more persons that the Bank identifies as being potential transferees under a transfer order; ( c ) to make a specified application to a specified authority, or give a specified notice to a specified person, on terms that the Bank specifies. (3) If the Bank imposes a requirement on an authorised credit institution, subsidiary or holding company and the intention of it or part of it is the preservation or restoration of the financial position of a credit institution, the Bank shall declare in the requirement that the requirement or part is made with that intention, in accordance with the CIWUD Directive. (4) The authorised credit institution, subsidiary or holding company the subject of the requirement under this section shall comply with the requirement in accordance with its terms (including any specification as to the time by which, or period within which, the requirement shall be complied with). (5) In complying with a requirement under this section, the authorised credit institution, subsidiary or holding company shall disclose in utmost good faith all matters and circumstances in relation to that institution, the authorised credit institution or a subsidiary that might materially affect, or might reasonably be expected to materially affect, any decision of the Bank in the performance of its functions under this Act. (6) The Bank may direct an authorised credit institution that any information provided by that institution or its holding company or subsidiary pursuant to a requirement under this section is to be certified as accurate and complete jointly by the chief executive officer and chief financial officer of that authorised institution, holding company or subsidiary, as the case may be, or by any 2 officers identified for that purpose by the Bank. (7) The officers and employees of the authorised credit institution, holding company or subsidiary shall comply with a requirement under this section and shall cause any subsidiary of that authorised institution, holding company or subsidiary to comply with the requirement (including any specification as to the time by which, or period within which, the requirement shall be complied with) to the extent that the requirement applies to the subsidiary. (8) The obligation to comply with a requirement under this section— ( a ) does not, notwithstanding any provision of any enactment or agreement or any rule of law, require the consent, approval or concurrence of any other person, and ( b ) takes priority over any other duty or obligation to any person. (9) If an authorised credit institution, an officer or employee of an authorised credit institution, a subsidiary, holding company, or subsidiary of a holding company, of an authorised credit institution or an officer or employee of such a subsidiary or holding company does not comply with a requirement, the Bank may apply to the Court by motion on notice on affidavit for an order compelling compliance with that requirement. (10) The Court may, in addition to the order compelling the authorised credit institution, holding company or subsidiary to comply with a requirement under this section, make any other order or direction it considers necessary in order to ensure that the authorised credit institution, holding company or subsidiary complies with the requirement. (11) Nothing in this section authorises the Bank to place an authorised credit institution under special management. (12) Except with the prior written consent of the Bank, a person shall not publish the fact that the Bank has imposed a requirement pursuant to subsection (1) unless required to do so by an enactment. (13) A person (including an authorised credit institution) who contravenes subsection (4) , (7) , or (12) commits an offence and is liable— ( a ) on summary conviction to a class A fine or imprisonment for a term not exceeding 12 months or both, or ( b ) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 3 years, or both. (14) If an offence under this section is committed by a body corporate, and is proved to have been committed with the consent or connivance, or to be attributable to any wilful neglect, of a person who, when the offence is committed, is— ( a ) a director, manager, secretary or other officer of the body corporate or a person purporting to act in that capacity, or ( b ) a member of the committee of management or other controlling authority of the body corporate or a person purporting to act in that capacity, that person is taken to have also committed an offence and may be proceeded against and punished in accordance with subsection (15) . (15) A person referred to in subsection (14) is liable— ( a ) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 12 months, or both, or ( b ) on conviction on indictment, to a fine not exceeding €250,000 or to imprisonment for a term not exceeding 3 years, or both. (16) It is not a contravention of subsection (12) for an authorised credit institution, or a subsidiary or holding company of an authorised credit institution, to disclose a fact referred to in that subsection for the purposes of obtaining professional advice. 23 .— Notwithstanding any provision of any enactment or agreement, or any rule of law, the Bank may disclose to a potential transferee information that it obtains on foot of a requirement or that is otherwise provided to it voluntarily by the transferor. 24 .— (1) In the performance of their functions, the directors of an authorised credit institution, holding company or subsidiary on which the Bank has imposed a requirement under section 22 (1) shall have a duty to comply with the requirement and to cause the authorised credit institution, holding company or subsidiary to comply with the requirement. (2) The duty imposed by subsection (1) — ( a ) is owed by the directors to the Bank, and ( b ) takes priority over any other duty of the directors to the extent of any inconsistency. (3) The Bank may make and publish guidelines in relation to the duty imposed by subsection (1) . A director may rely on any such guidelines in demonstrating his or her compliance with that duty. 25 .— The Bank shall not, by reason of the imposition of a requirement under section 22 , be taken to be a shadow director (within the meaning given by section 27 (1) of the Companies Act 1990 ) nor what is known as a de facto director nor a person discharging managerial responsibilities of the authorised credit institution, subsidiary or holding company on which the requirement was imposed. 26 .— (1) Subject to subsection (4) , before making a proposed transfer order in relation to an authorised credit institution, subsidiary or holding company, the Bank shall— ( a ) deliver a written notice to the transferor and, if the transferor is a subsidiary or holding company of an authorised credit institution, to that credit institution, describing the terms of the proposed transfer order, accompanied by a summary of the reasons why the Bank believes that the intervention conditions are fulfilled, ( b ) afford that transferor, and, if applicable, the authorised credit institution, 48 hours, or a shorter period on which the Bank and that credit institution agree, in which to make written submissions to the Bank, and ( c ) consider any submissions made under paragraph (b) . (2) If the Bank proposes that the transfer order or any term of it have immediate effect, the Bank shall state, in the written notice, that fact and the reasons why the order should have that effect. (3) If the Bank proposes that assets or liabilities be transferred to a bridge-bank, it shall so state in the written notice. (4) Subsections (1) to (3) do not apply if— ( a ) the Bank has consulted the authorised credit institution concerning the terms of the proposed transfer order and that credit institution has consented to the making of a transfer order in those terms, or ( b ) exceptional circumstances (within the meaning of subsection (5) ) exist. (5) Exceptional circumstances for the purposes of subsection (4) exist if— ( a ) there is an imminent threat to the financial stability of the authorised credit institution concerned and the Bank is of the opinion that compliance with subsection (1) would result in significant damage to the financial stability of that credit institution, ( b ) there is an imminent threat to the stability of the financial system in the State and the Bank is of the opinion that compliance with that subsection would result in significant damage to the stability of that financial system, or ( c ) the Bank has reasonable grounds for believing that— (i) confidentiality in relation to the proposed transfer order, or the possibility of the making of a transfer order, would not be maintained, and (ii) the breach of such confidentiality would have significant adverse consequences. (6) If the Bank makes a proposed transfer order in relation to an authorised credit institution and the intention of the proposed transfer order or part of it is the preservation or restoration of the financial position of a credit institution, the Bank shall declare in the proposed transfer order that the proposed transfer order or part is made with that intention, in accordance with the CIWUD Directive. 27 .— (1) Unless the Bank provides prior written consent, a transferor shall not dispose of any asset or liability which is to be transferred under a transfer order, except in the ordinary course of its business, during the period beginning with the delivery of the written notice under section 26 (1) or the date on which the transferor otherwise becomes aware of the proposed transfer order for the purposes of consultation under section 26 (4) , whichever is the earlier, and ending on the date of effect of the transfer order under section 49 . (2) The officers and employees of a transferor shall comply with subsection (1) . (3) If the Bank is of the opinion that a transferor is in breach of subsection (1) or has taken steps that would likely lead to such a breach, the Bank may apply ex parte to the Court for an order compelling compliance with that subsection. 28 .— (1) The consideration for the assets and liabilities transferred under a transfer order shall be the aggregate of the market value of all of those assets, less the aggregate of the market value of all of those liabilities, as at the time of the transfer order. (2) For the purposes of subsection (1) , and subject to subsections (3) and (4) , the market value of assets and liabilities shall be taken to be— ( a ) in the case of assets, the amount that the transferee is willing to pay for those assets, and ( b ) in the case of liabilities, the amount that the transferee is willing to accept in return for assuming those liabilities, or the book value of those liabilities, whichever is the lower. (3) The Bank shall, before making a proposed transfer order and so far as practicable in all the circumstances (including, where relevant, the urgent need to resolve the financial instability of the transferor) carry out a competitive process that allows the determination of market value, unless the proposed transferee is a bridge-bank. (4) The Bank shall, before applying for a variation of a transfer order under section 33 (1) and so far as practicable in all the circumstances (including, where relevant, the urgent need to resolve financial instability of the transferor) carry out a competitive process that allows the determination of the market value. 29 .— (1) A proposed transfer order shall set out— ( a ) the consideration for the proposed transfer, and any other terms and conditions of the proposed transfer, including any specification of a date by which or a period within which the transferor is required to comply with any such term or condition, and, where the transfer order or any term of it is to have immediate effect, the reasons why it should have that effect, ( b ) any incidental, consequential and supplemental provisions for implementing the transfer and securing that it is fully and effectively carried out, including provisions for substituting the name of the transferee for that of the transferor or otherwise adapting references to the transferor in any instrument made under an Act, and ( c ) any provision for transitional matters, including the sharing of assets and other contracts. (2) A proposed transfer order may propose that the transferee be a bridge-bank if the Bank is of the opinion that— ( a ) the circumstances of the authorised credit institution concerned require the immediate transfer of assets or liabilities out of that credit institution, and ( b ) no suitable transferee can be found willing to take such a transfer on terms and conditions (including consideration) that the Bank considers appropriate. (3) A proposed transfer order shall not propose that a person (other than a bridge-bank) be the transferee unless that person has agreed to accept the transfer on the terms set out in the order. (4) Notwithstanding any provision of any enactment, agreement or rule of law, the Bank may, for the purposes of obtaining the agreement of a person under subsection (3) , disclose to the person concerned any information in its possession in relation to the transferor or a proposed transfer order. 30 .— (1) As soon as may be after completion, in relation to a proposed transfer order, of the procedures required by section 26 , the Bank shall apply ex parte to the Court for an order (referred to in this Act as a “transfer order”) in the terms of the proposed transfer order. (2) A report prepared by the Bank (whether or not prepared specifically for the purpose of the application) in relation to matters within the Bank’s responsibilities, including the financial position of the authorised credit institution concerned, is admissible in evidence at the hearing of the application. (3) The Court, when hearing an application under subsection (1) , shall, if satisfied that the requirements of section 26 have been complied with and that the decision of the Bank was reasonable and was not vitiated by any error of law, make a transfer order in the terms of the proposed transfer order (or those terms as varied by the Bank after consideration of any submission made under section 26 (1)(b) ). (4) If the Bank has declared the intention of preserving or restoring the financial position of a credit institution in a proposed transfer order, and the Court is satisfied that the Bank has that intention, the Court shall declare in the relevant transfer order that the order or the relevant part of it is a re-organisation measure for the purposes of the CIWUD Directive. (5) The Court shall order that a transfer order or a term of a transfer order has effect immediately if the Court is satisfied that it is necessary, in all the circumstances, for the order or term to have that effect. (6) Subject to subsection (5) , the Court may make a transfer order on terms other than those of the proposed transfer order (or those terms as varied by the Bank after consideration of any submission made under section 26 (1) (b) ) only if the Court is satisfied that— ( a ) there has been non-compliance with any of the requirements of section 26 or that the decision of the Bank was unreasonable or vitiated by an error of law, ( b ) it would be appropriate to do so, having regard to any report referred to in subsection (2) , and ( c ) the intervention conditions have been fulfilled in relation to the authorised credit institution concerned. 31 .— (1) The Bank shall, as soon as practicable after a transfer order is made— ( a ) serve a copy of the transfer order on the authorised credit institution concerned, and ( b ) publish the order in 2 newspapers circulating generally in the State. (2) In a particular case, the Bank may, if the Bank thinks it necessary to do so, publish a transfer order by an additional means or in an additional place. (3) Without delay after the service of the copy of the transfer order, the authorised credit institution shall take all reasonable measures to ensure that its members are made aware of the order, including, without limiting the generality of the foregoing— ( a ) where the shares of the authorised credit institution are traded from time to time on a financial market (whether a regulated market or not), making an announcement that relates to the existence of the transfer order and its effect, to a regulatory news service generally used by credit institutions in the State for the purposes of announcements to such markets, and ( b ) providing a copy of the transfer order to the regulatory news service referred to in paragraph (a) . 32 .— The Bank may apply— ( a ) on notice, or ( b ) in urgent circumstances, ex parte , to the Court to vary a transfer order. 33 .— (1) If assets or liabilities have been transferred to a bridge-bank by a transfer order, and the Bank finds a suitable transferee for some or all of those assets and liabilities on terms and conditions that the Bank considers appropriate, the Bank may apply to the Court to vary the transfer order to provide that that transferee’s name be substituted as transferee of those assets and liabilities, and to provide for the variation of other terms and conditions (including conditions relating to consideration) of the transfer order. (2) The Court may not make an order substituting a transferee under subsection (1) without the consent of the person whose name is to be substituted as transferee. (3) If the Court orders that the consideration is varied— ( a ) the transferee shall repay, to the bridge-bank (or the person who paid that consideration on behalf of the bridge-bank), the consideration under the transfer order before its variation, and ( b ) the transferee shall pay, as the Court may direct, any excess over the amount repaid under paragraph (a) — (i) to the transferor, (ii) to the bridge-bank, or (iii) to the transferor and the bridge-bank. (4) If assets or liabilities have been transferred to a bridge-bank pursuant to a transfer order, and the Bank, after such period as the Bank considers reasonable, forms the opinion that a suitable transferee cannot be found for particular assets and liabilities on terms and conditions that the Bank considers appropriate, the Bank may apply to the Court to vary the transfer order to provide that those assets or liabilities be returned to the transferor. 34 .— (1) The transferor in relation to which a transfer order is made or a member of that transferor may apply to the Court by motion on notice grounded upon affidavit, not later than 14 days after the publication, in accordance with subsection (1)(b) of section 31 , of the transfer order, for the setting aside of the transfer order. (2) The Court shall give such priority to an application under subsection (1) as is necessary in the circumstances, and may give such directions as it considers appropriate in the circumstances— ( a ) with regard to the hearing of the application, or ( b ) with regard to a matter that arises during the period beginning with the transfer order and ending with the order of the Court under this section. (3) On an application under subsection (1) , the Court shall set aside the transfer order only if the Court is satisfied that there has been non-compliance with any of the requirements of section 26 or that the decision of the Bank was unreasonable or vitiated by an error of law. (4) If the Court sets aside a transfer order, no further assets or liabilities shall be transferred as a consequence of the transfer order. (5) The setting aside of a transfer order does not affect the rights of a transferee (other than a bridge-bank) or the transferee’s title to any asset or liability so transferred before such setting-aside of the transfer order. (6) If a transfer order is set aside and assets or liabilities have been transferred pursuant to it (other than to a bridge-bank), the transferor is not entitled to any payment other than the consideration paid pursuant to the transfer order or determined to be payable in accordance with section 48 . (7) If the Court sets aside a transfer order transferring assets or liabilities to a bridge-bank— ( a ) if a re-transfer of the assets or liabilities, or any of them, is possible, they shall be transferred back to the transferor and any consideration paid to the transferor shall be repaid to the bridge-bank, ( b ) if a re-transfer of the assets or liabilities, or any of them, is not possible, the transfer is not rendered invalid, and ( c ) subject to paragraphs (a) and (b) , the Court may— (i) order that the transferor and the bridge-bank be restored as nearly as possible to their respective positions before the order was made, and (ii) by order resolve, or provide for the resolution of, any dispute. (8) The Court may, instead of setting aside the transfer order, make an order varying or amending that order in the manner it considers appropriate if the Court is satisfied that— ( a ) there has been non-compliance with any of the requirements of section 26 or that the decision of the Bank was unreasonable or vitiated by an error of law, ( b ) it would be appropriate to vary or amend the order, having regard to any report referred to in section 30 (2) before the Court, and ( c ) the intervention conditions have been fulfilled in relation to the authorised credit institution concerned. (9) If a variation or amendment of a transfer order, whether made under this section or on application by the Bank under section 33 , would, but for this subsection, have the effect of setting aside a disposition of an asset or liability, subsections (4) to (7) apply with any necessary modifications. (10) The Court, in considering the order it wishes to make under this section, may, where the applicant is a member of the transferor, have regard to— ( a ) the date on which the applicant became a member of the transferor, or increased or decreased the number of shares that the applicant held in the transferor, and ( b ) the value of the shares acquired by or disposed of by the member— (i) as at the date or dates on which the shares were acquired or disposed of, as the case may be, and (ii) as at the date on which the transfer order concerned was made. 35 .— (1) Subject to subsection (2) , a creditor of a transferor in relation to a transfer order may apply to the Court, by motion on notice grounded upon affidavit, for an order permitting the creditor to apply for compensation under this Act. (2) An application under subsection (1) may be made only on a date that is— ( a ) after the date on which the affairs of the transferor have been wound up, and ( b ) before the date that is 6 months after the date referred to in paragraph (a) . (3) On an application under subsection (1) , the Court shall order that the creditor be permitted to apply for compensation, if the Court is satisfied that— ( a ) a resolution for the winding-up of the transferor was passed, or an order for its winding-up was made, within 12 months after the making of the transfer order, ( b ) the affairs of the transferor have been wound up, ( c ) any financial obligation of the transferor to the creditor in respect of which the creditor seeks to apply for compensation was undertaken before the making of the transfer order, ( d ) financial support (within the meaning of the Act of 2008) was not provided to the transferor by the State, in the 4 years immediately before the date on which the resolution referred to in paragraph (a) was passed, or the order referred to in that paragraph was made, whichever is the earlier, and ( e ) the dividend that the creditor received on the winding-up of the transferor was less than the dividend that it is likely that the creditor would have received had the transfer order not been made when it was made, and the creditor’s burden in receiving that lesser dividend was, relative to the benefit to the financial stability of the transferor, or the stability of the financial system or the economy, disproportionate having regard to the circumstances of the creditor. 36 .— (1) Where the Court makes one or more orders under section 35 in relation to a creditor or creditors of a transferor, the Bank shall, not later than 6 months after the date of the last order in relation to the creditors of that transferor, appoint a person (referred to in this Act as the “Assessor”) to determine, in accordance with this Act, the fair and reasonable amount, if any, payable to each creditor concerned. (2) The Bank may appoint the same person to be the Assessor in relation to more than one transferor. (3) In appointing a person as the Assessor, the Bank shall ensure that the person has, in the Bank’s opinion, significant knowledge or experience of the financial services sector. (4) The Bank shall not appoint a person as the Assessor unless the Bank is satisfied that the person would, if appointed, have no conflict of a material nature between any personal or business interests and the performance of the Assessor’s functions. (5) A person is not eligible to be appointed as the Assessor if the person— ( a ) is a member of either House of the Oireachtas or is, with the person’s consent, nominated as a candidate for election as such a member, ( b ) is a member of the European Parliament or is, with the person’s consent, nominated as a candidate for election as such a member or to fill a vacancy in the membership of that Parliament, or ( c ) is a member of a local authority (within the meaning of the Local Government Act 2001 ) or is, with the person’s consent, nominated as a candidate for election as such a member. (6) For the purpose of facilitating the performance of his or her functions under this Act, the Assessor has the powers set out in Schedule 1 and may exercise, for any particular purpose, such of those powers as he or she, in his or her sole discretion, determines are appropriate for that purpose. (7) A person who commits an offence under Schedule 1 is liable— ( a ) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 12 months or both, or ( b ) on conviction on indictment to a fine not exceeding €100,000 or to imprisonment for a term not exceeding 3 years or both. (8) If an offence under this section is committed by an authorised credit institution, and is proved to have been committed with the consent or connivance, or to be attributable to any wilful neglect, of a person who, when the offence is committed, is— ( a ) a director, manager, secretary or other officer of the authorised credit institution or a person purporting to act in that capacity, or ( b ) a member of the committee of management or other controlling authority of the authorised credit institution or a person purporting to act in that capacity, that person is taken to have also committed an offence and may be proceeded against and punished in accordance with subsection (9) . (9) A person referred to in subsection (8) is liable— ( a ) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 12 months, or both, or ( b ) on conviction on indictment, to a fine not exceeding €100,000 or to imprisonment for a term not exceeding 3 years, or both. (10) In the performance of his or her functions under this Act, the Assessor— ( a ) is independent, ( b ) shall act as an expert only, and ( c ) shall act as expeditiously as possible consistent with fairness. (11) The Assessor shall complete the performance of his or her functions within such period as the Bank specifies from time to time. 37 .— (1) The Bank shall, from the Fund, pay or reimburse such expenses of a person appointed as Assessor (including remuneration) as the Bank determines. (2) The Assessor may, with the consent of the Bank, engage such staff or other persons as the Assessor considers necessary to assist him or her in the performance of his or her functions, and shall take reasonable measures to satisfy himself or herself that no person so engaged is affected by a material conflict of interest. 38 .— (1) A person shall not apply to the Assessor for compensation unless the Court has ordered under section 35 that the person is permitted to do so. (2) An application to the Assessor shall be made in accordance with procedures determined by the Assessor under section 39 (3) . 39 .— (1) The following persons and no others may make submissions to the Assessor in respect of compensation in relation to a transferor: ( a ) the Bank; ( b ) the creditor concerned; ( c ) the liquidator of the transferor; ( d ) the Minister; ( e ) the National Treasury Management Agency. (2) A submission to the Assessor under subsection (1) shall be made in accordance with procedures determined by the Assessor under subsection (3) . (3) Subject to any regulations made by the Minister under section 109 , the Assessor shall determine, in his or her sole discretion, procedures for— ( a ) the form and type of applications for compensation under section 38 , ( b ) the form and type of submissions to be made to the Assessor, ( c ) the means by which confidential information should be protected from public disclosure, and ( d ) the performance of any of the Assessor’s functions. 40 .— (1) The Assessor shall determine the fair and reasonable amount of compensation, if any, payable to each creditor who applies for compensation. (2) The Assessor shall, in determining the amount of compensation referred to in subsection (1) , have regard to— ( a ) the financial obligation of the transferor to the creditor, ( b ) the dividend that the creditor received on the winding-up of the transferor, ( c ) the dividend that it is likely that the creditor would have received had a winding-up order been made instead of the transfer order, ( d ) whether a financial incentive was provided under section 46 , ( e ) whether financial support (within the meaning of the Act of 2008) or any other financial assistance, investment or guarantee was provided to the transferor by the State at any time, ( f ) whether it was reasonable in all the circumstances for the creditor to have undertaken the financial obligation with the transferor, having regard to the financial position of the transferor at that time, ( g ) whether the financial obligation of the creditor was undertaken before or after the passing of this Act, ( h ) whether the creditor took steps to secure the satisfaction of the financial obligation before the transfer order was made, ( i ) any relevant evidence that the Assessor obtains in the performance of his or her functions, ( j ) any submissions made to the Assessor, and ( k ) any other relevant matter. (3) The Assessor shall make the determination required by subsection (1) on the basis of the information and evidence available to him or her at the time he or she makes it. (4) A conclusion drawn or finding made by the Assessor in making the determination required by subsection (1) does not amount to a finding of fact for any purpose other than the purposes of this Act. (5) The fair and reasonable amount of compensation, if any, payable to a creditor— ( a ) shall not exceed the actual loss incurred by the creditor that has been proved, to the satisfaction of the Assessor, to have arisen directly from the making of the transfer order, and ( b ) may be determined to be— (i) less than the actual loss so incurred, or (ii) nil. (6) Whenever the Bank so requests, the Assessor shall report to the Bank as to his or her progress in making the determination required by this section. (7) The liquidator of a transferor shall cooperate with the Assessor and shall deliver to the Assessor the books and records of the transferor and of the liquidator which, notwithstanding section 305 (1) of the Companies Act 1963 , shall not be disposed of. 41 .— (1) Before making a report to the Bank under section 42 , the Assessor shall, subject to subsection (2) , send a draft of the report to— ( a ) each person who made a submission to the Assessor, and ( b ) any other person, or each person in any class of persons, that the Bank specifies in writing, inviting the person to make written submissions concerning the draft report and specifying a reasonable period in which to do so. (2) The Assessor may, instead of sending the entire draft of the report— ( a ) in respect of each person mentioned in paragraph (a) or (b) of subsection (1) , send to the person the part of the draft report that is relevant to that person, or ( b ) omit from the draft report any evidence or material if including that evidence or material would, in the Assessor’s opinion, disclose commercially sensitive information or would otherwise be contrary to the public interest. (3) Before making the report to the Bank under section 42 , the Assessor shall consider any submissions made in accordance with the Assessor’s invitation under subsection (1) and shall revise the report as appropriate. (4) A person to whom the Assessor sends a copy of a draft report, or of a part of a draft report, under subsection (1) commits an offence if he or she discloses the report or its contents or any part of the report or its contents to any person other than for the purpose of obtaining professional advice. (5) A person to whom a draft report of the Assessor or a part of it is disclosed (whether under subsection (4) for the purposes of obtaining professional advice or otherwise) commits an offence if he or she discloses the report or its contents, or any part of the report or its contents, to any other person other than for the purpose of obtaining professional advice. (6) A person who contravenes subsection (4) or (5) commits an offence and is liable— ( a ) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 12 months, or both, or ( b ) on conviction on indictment to a fine not exceeding €100,000 or to imprisonment for a term not exceeding 3 years, or both. (7) If an offence under this section is committed by a body corporate and is proved to have been committed with the consent or connivance, or to be attributable to any wilful neglect, of a person who, when the offence is committed, is— ( a ) a director, manager, secretary or other officer of the body corporate or a person purporting to act in that capacity, or ( b ) a member of the committee of management or other controlling authority of the body corporate or a person purporting to act in that capacity, that person is taken to have also committed an offence and may be proceeded against and punished in accordance with subsection (8) . (8) A person