S.L. 330.9 Art. 38The sale of business tool.

(1) The Resolution Committee shall have the power to transfer to a purchaser that is not a bridge institution:

(a) shares or other instruments of ownership issued by an institution under resolution;

(b) all or any assets, rights or liabilities of an institution under resolution:

Provided that, subject to sub-regulations (8) and (9) and to regulation 85, the transfer referred to in this sub-regulation shall take place without obtaining the consent of the shareholders of the institution under resolution or any third party other than the purchaser, and without complying with any procedural requirements under company or securities law other than those included in regulation 39, and it shall not constitute a default or termination event in relation to any obligation relating to such assets or liabilities or under any contract to which the failed institution is a party.

(2) A transfer made pursuant to sub-regulation (1) shall be made on commercial terms, having regard to the circumstances, and in accordance with the Union State aid framework.

(3) In accordance with sub-regulation (2), the Resolution Committee shall take all reasonable steps to obtain commercial terms for the transfer that conform with the valuation conducted under regulation 36, having regard to the circumstances of the case.

(4) Subject to regulation 37(7), any consideration paid by the purchaser shall benefit:

(a) the owners of the shares or other instruments of ownership, where the sale of business has been effected by transferring shares or instruments of ownership issued by the institution under resolution from the holders of those shares or instruments to the purchaser;

(b) the institution under resolution, where the sale of business has been effected by transferring some or all of the assets or liabilities of the institution under resolution to the purchaser.

(5) When applying the sale of business tool the Resolution Committee may exercise the transfer power more than once in order to make supplemental transfers of shares or other instruments of ownership issued by an institution under resolution or, as the case may be, assets, rights or liabilities of the institution under resolution.

(6) Following an application of the sale of business tool, the Resolution Committee may, with the consent of the purchaser, exercise the transfer powers in respect of assets, rights or liabilities transferred to the purchaser in order to transfer the assets, rights or liabilities back to the institution under resolution, or the shares or other instruments of ownership back to their original owners, and the institution under resolution or original owners shall be obliged to take back any such assets, rights or liabilities, or shares or other instruments of ownership.

(7) A purchaser shall have the appropriate authorisation to carry out the business it acquires when the transfer is made pursuant to sub-regulation (1). The Authority shall ensure that an application for a licence shall be considered, in conjunction with the transfer, in a timely manner.

(8) By way of derogation from Articles 22 to 25 of the CRD, from the requirement to inform the Authority in Article 26 of the CRD, articles 10, 10A and 10B of the Investment Services Act and the Investment Services Rules for Investment Services Providers, where a transfer of shares or other instruments of ownership by virtue of an application of the sale of business tool would result in the acquisition of or increase in a qualifying holding in an institution of a kind referred to in Article 22(1) of the CRD or article 10 of the Investment Services Act, the Authority shall carry out the assessment required under those Articles in a timely manner that does not delay the application of the sale of business tool and prevent the resolution action from achieving the relevant resolution objectives.

(9) Where the Authority has not completed the assessment referred to in sub-regulation (8) from the date of transfer of shares or other instruments of ownership in the application of the sale of business tool by the Resolution Committee, the following provisions shall apply:

(a) such a transfer of shares or other instruments of ownership to the acquirer shall have immediate legal effect;

(b) during the assessment period and during any divestment period provided by paragraph (f), the acquirer’s voting rights attached to such shares or other instruments of ownership shall be suspended and vested solely in the Resolution Committee, which shall have no obligation to exercise any such voting rights and which shall have no liability whatsoever for exercising or refraining from exercising any such voting rights;

(c) during the assessment period and during any divestment period provided by paragraph (f), the penalties and other measures in terms of article 35B of the Banking Act, regulations 6 and 7 of the

Administrative Penalties, Measures and Investigatory Powers Regulations made under the Banking Act and regulations 6 and 7 of the CRD (Administrative Penalties, Measures and Investigatory Powers) Regulations made under the Investment Services Act, for infringing the requirements for acquisitions or disposals of qualifying holdings, shall not apply to such a transfer of shares or other instruments of ownership;

(d) promptly upon completion of the assessment by the Authority, the Authority shall notify the Resolution Committee and the acquirer in writing of whether the Authority approves or, in accordance with article

13A(11) of the Banking Act, opposes such a transfer of shares or other instruments of ownership to the acquirer;

(e) if the Authority approves such a transfer of shares or other instruments of ownership to the acquirer, then the voting rights attached to such shares or other instruments of ownership shall be deemed to be fully vested in the acquirer immediately upon receipt by the Resolution Committee and the acquirer of such an approval notice from the Authority;

(f) if the Authority opposes such a transfer of shares or other instruments of ownership to the acquirer, then:

(i) the voting rights attached to such shares or other instruments of ownership as provided by paragraph (b) shall remain in full force and effect;

(ii) the Resolution Committee may require the acquirer to divest such shares or other instruments of ownership within a divestment period determined by the Resolution Committee having taken into account prevailing market conditions;

(iii) if the acquirer does not complete such a divestment within the divestment period established by the Resolution Committee, then the Authority, with the consent of the Resolution Committee, may impose on the acquirer penalties and other measures for infringing the requirements for acquisitions or disposals of qualifying holdings contemplated by article 35B of the Banking Act, regulations 6 and 7 of the

Administrative Penalties, Measures and

Investigatory Powers Regulations made under the Banking Act and regulations 6 and 7 of the CRD (Administrative Penalties, Measures and Investigatory Powers) Regulations made under the Investment Services Act.

(10) Transfers made by virtue of the sale of business tool shall be subject to the safeguards referred to in regulations 73 to 80.

(11) For the purposes of exercising the rights to provide services or to establish itself in another Member State in accordance with the CRD or Directive 2014/65/EU, the purchaser shall be considered to be a continuation of the institution under resolution, and may continue to exercise any such right that was exercised by the institution under resolution in respect of the assets, rights or liabilities transferred.

(12) The purchaser referred to in sub-regulation (1) may continue to exercise the rights of membership and access to payment, clearing and settlement systems, stock exchanges, investor compensation schemes and deposit guarantee schemes of the institution under resolution, provided that it meets the membership and participation criteria for participation in such systems: Provided that:

(a) access shall not be denied on the ground that the purchaser does not possess a rating from a credit rating agency, or that rating is not commensurate to the rating levels required to be granted access to the systems referred to in this sub-regulation;

(b) where the purchaser does not meet the membership or participation criteria for a relevant payment, clearing or settlement system, stock exchange, investor compensation scheme or deposit guarantee scheme, the rights referred to in this sub-regulation shall be exercised for such a period of time as may be specified by the Resolution Committee, not exceeding twenty-four months, renewable on application by the purchaser to the Resolution Committee.

(13) Without prejudice to regulations 73 to 80, shareholders or creditors of the institution under resolution and other third parties whose assets, rights or liabilities are not transferred shall not have any rights over or in relation to the assets, rights or liabilities transferred.