Notice - Banking (Special Resolution Regime) Act 2013 (2013-07-25)

Summary

This is a BMA consultation notice, accompanied by a draft Bill, proposing a Special Resolution Regime (SRR) for banks licensed in Bermuda. It sets out a statutory framework to manage failing banks outside the ordinary insolvency law, modelled on the UK Banking Act 2009, and invites industry comment on the draft legislation.

• Stabilisation options (Part 1): Powers to transfer a failing bank's business to a private sector purchaser, a bridge bank, or into temporary public ownership.
• Bank insolvency procedure (Part 2): A bespoke bank insolvency regime including new concepts such as wrongful trading, fraudulent trading, transactions at an undervalue, preferences, extortionate credit transactions, avoidance of certain floating charges, and director disqualification.
• Bank administration procedure (Part 3): An administration process for a residual bank once a stabilisation power has been exercised, run by a bank administrator or provisional administrator.
• Roles of Authority and Minister: The BMA may exercise intervention powers where a private sector solution is available (after consulting the Minister), while the Government takes control where temporary public ownership is the chosen option.
• Miscellaneous matters (Part 4): Supplemental provisions including qualification requirements for insolvency practitioners and other technical/legal issues arising from creating a bank-specific insolvency standard distinct from the Companies Act 1981.

The notice is a consultation on a draft Bill, not yet in force, and BMA sought written comments on the proposals by a stated deadline. No obligations are currently binding on banks under this notice; it describes proposed future requirements pending enactment of legislation.

Key obligations

• Interested parties must submit comments on the draft Bill to policy@bma.bm by 16th September 2013

Applies to

banks licensed in Bermuda, bank directors and officers, insolvency practitioners

Deadlines

• 16th September 2013: Deadline for submitting comments on the draft Banking (Special Resolution Regime) Act 2013 Bill to policy@bma.bm