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legislation, delegated legislation and financial emergencies September 30, 2008

Posted by Bradley in : Uncategorized , trackback

The Bradford & Bingley Transfer of Securities etc Order was adopted yesterday under the Banking (Special Provisions) Act 2008 on an unusual schedule for UK statutory instruments:

3.1 It was not possible in the case of this Order to comply with the 21-day rule according to which relevant instruments are laid before Parliament for at least 21 days prior to coming into force. The Order was made at 7.40 a.m. on 29th September 2008, came into force at 8.00am on that day and then was laid before Parliament on that day.
3.2 It is important that the transfer of securities in Bradford & Bingley, and the transfer of certain property, rights and liabilities and other related matters, has effect as soon as possible following the making of the Order. It is in everyone’s interest for the transfer of shares and transfer of property to be effected as swiftly as possible to avoid uncertainty .

For many of the provisions of the Statutory Instrument, the speed is understandable. But some of the provisions don’t just address the urgent transfer of assets, but purport to alter primary legislation. For example, the Financial Services Act requires the FSA to publish draft rules and try to bring them to the attention of the public before acting to promulgate rules. The original exception to these requirements stated that they would not apply

if the Authority considers that the delay involved in complying with them would be prejudicial to the interests of consumers.

The Bradford and Bingley Amendment Order adds the following language:

or if it is making rules for the purposes of, or to facilitate or in consequence of, a transfer under section 3 or 8 of the Banking (Special Provisions) Act 2008.

Surely this provision would have been more appropriate in the Banking (Special Provisions) Act itself (which was itself enacted very speedily), rather than in a statutory instrument which came into effect 20 minutes after it was made by the Treasury and was only later laid before Parliament? On the other hand, the statute does seem to give the Treasury an incredibly (excessively?) general power to disapply statutory provisions or rules of law in section 12:

(1) The Treasury may by order make—
(a) such supplementary, incidental or consequential provision, or
(b) such transitory, transitional or saving provision,
as they consider appropriate for the general purposes, or any particular purposes, of this Act or in consequence of any provision made by or under this Act, or for giving full effect to this Act or any such provision.
(2) An order under this section may in particular—
(a) disapply (to such extent as is specified) any specified statutory provision or rule of law…

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