Compare of scheme - Barclays IN THE MATTER OF BARCLAYS BANK PLC AND IN THE MATTER OF BARCLAYS BANK IRELAND

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  • CLIFFORD CHANCE LLP

    Draft Date: 17 October 2018

    213015-3-514-v26.0213015-3-20358-v2.0 70-40654025

    No. CR-[•] 2018-008846

    IN THE HIGH COURT OF JUSTICE

    BUSINESS AND PROPERTY COURTS

    OF ENGLAND AND WALES

    COMPANIES COURT (ChD)

    IN THE MATTER OF

    BARCLAYS BANK PLC

    AND

    IN THE MATTER OF

    BARCLAYS BANK IRELAND PLCPUBLIC LIMITED COMPANY

    AND

    IN THE MATTER OF PART VII OF

    THE FINANCIAL SERVICES AND MARKETS ACT 2000

  • 213015-3-514-v26.0213015-3-20358-v2.0 70-40654025

    CONTENTS

    Paragraph Page

    1. Introduction to the Scheme ................................................................................................ 1

    2. The Transfer and Duplication ............................................................................................ 3

    3. Description of the Transferring Business .......................................................................... 3

    4. Provisions Applicable to the Transferring Business ......................................................... 4

    5. Duplication of Certain Agreements ................................................................................. 11

    6. Timing of Transfers ......................................................................................................... 32

    7. Provisions Relating to Security ....................................................................................... 33

    8. Guarantees/Indemnities ................................................................................................... 35

    9. Consequences of the Scheme .......................................................................................... 37

    10. Treatment of Residual Items ........................................................................................... 39

    11. Indemnity in relation to Residual Liabilities ................................................................... 41

    12. Conduct of Existing Proceedings .................................................................................... 41

    13. Wrong Pockets ................................................................................................................ 42

    14. Amendments to Contracts ............................................................................................... 45

    15. Miscellaneous Provisions ................................................................................................ 48

    Schedule 1 Definitions and Interpretation ............................................................................... 51

    Schedule 2 Identification Numbers .......................................................................................... 90

    Schedule 3 Amendments.......................................................................................................... 91

    Part A General Amendments ................................................................................................... 91

    Part B Specific Amendments ................................................................................................. 104

  • 213015-3-514-v26.0213015-3-20358-v2.0 - 1 - 70-40654025

    1. INTRODUCTION TO THE SCHEME

    1.1 Interpretation

    The definitions and other provisions relating to interpretation set out in Schedule 1

    apply throughout the Scheme, including the schedules.

    1.2 Introduction to the Proposed Scheme

    1.2.1 BPLC is the parent company of the Barclays group of companies.

    1.2.2 BBPLC is a direct subsidiary of BPLC and undertakes consumer, corporate and

    investment banking business, including dealing in investments as principal,

    deposit taking and lending. Its business is divided into several different business

    areas, including the Corporate Banking, Investment Banking and Private

    Banking and Overseas Services businesses. These business areas service EEA

    based and other In-Scope Clients from the United Kingdom and from BBPLC's

    branches in Germany, France, Italy, the Netherlands, Spain, Portugal and

    Sweden.

    1.2.3 The Transferee, BBI, is an EU licensed bank, regulated by the Central Bank of

    Ireland, and a direct, wholly owned subsidiary of BBPLC. The Transferee

    provides wholesale banking, corporate banking, trade, treasury and wealth

    management services predominantly servicing the Irish domestic market.

    1.2.4 To enable BBPLC's business to continue serving EEA based and other In-Scope

    Clients from within the EU after the UK leaves the EU, it is proposed to transfer

    those EEA related activities (including the business of BBPLC's EEA branches)

    to the Transferee. As part of that process, it is proposed that relevant parts of

    BBPLC's business will be transferred from BBPLC to the Transferee by way of

    a banking business transfer under Part VII of the Financial Services and Markets

    Act 2000 and that the transfer of each relevant part of BBPLC's business will

    take effect at the Relevant Effective Time for that part, during the period

    beginning on the Initial Effective Date and ending not later than the Longstop

    Date, as further detailed in this Scheme.

    1.2.5 The Scheme will transfer the Transferring Business as described in paragraph

    3. In addition to the relevant parts of the business of BBPLC, the Transferring

    Business includes the relevant parts of the business carried on by BCSL. BCSL

    is a dual-regulated UK investment firm and supports the business of BBPLC by

    providing access to equity markets in Europe and Asia through exchange

    memberships and clearing relationships. BCSL operates as the primary interface

    for the Barclays Group with the equity markets and its activities include the

    provision of support to BBPLC for transactions with In-Scope Clients.

    1.2.6 In connection with the Scheme and to ensure that the Scheme is fully and

    effectively carried out, it is proposed that the transfer of the relevant parts of the

    business conducted by BCSL is effected under section 112(1)(d) of the Act.

    1.2.7 Paragraph 5 of the Scheme provides that certain types of agreement that are

    currently in place between one or both Transferring Entities and In-Scope

  • 213015-3-514-v26.0213015-3-20358-v2.0 - 2 - 70-40654025

    Clients or relevant third parties will be duplicated with the Transferee upon the

    Scheme becoming effective. The agreements to be duplicated include the

    Master Agreements, the Terms of Business, the Master Risk Participation

    Agreements, certain Global Undertakings and certain other agreements entered

    into by the Corporate Banking Business, the Investment Banking Business or

    the PBOS Business. Historic transactions or positions entered into by In-Scope

    Clients pursuant to, or in connection with, certain duplicated agreements and

    identified as in-scope for the Scheme will subsequently transfer to the

    Transferee subject (in the case of investment banking transactions or positions)

    to not having received a client instruction to the contrary. The historic

    transactions and positions that transfer to the Transferee will, on and from their

    transfer, be governed by or, as applicable, be entered into in conjunction with,

    the relevant Duplicated Agreement between the Transferee and the In-Scope

    Client or relevant third parties. Certain PBOS deposits held by a Transferring

    Entity pursuant to certain duplicated agreements will also transfer to the

    Transferee pursuant to the Scheme.

    1.2.8 In addition, the Scheme contains consequential amendments to certain

    contractual terms and conditions as described in paragraph 14 and Schedule 3

    of the Scheme. The Scheme proposes to make certain amendments to references

    and to ensure compliance with applicable laws and regulations in connection

    with the transfers and duplication contemplated by the Scheme. The Scheme

    also proposes to make certain specific amendments to particular agreements

    entered into in connection with each Transferring Entity's business areas.

    1.3 Authorisation, Eligibility and Application

    1.3.1 Each of the Transferring Entities is an authorised person in the UK within the

    meaning of the Act and each of the Transferring Entities has the necessary

    permissions to carry out regulated activities pursuant to Part 4A of the Act

    including permission to deal in investments as principal and, in the case of

    BBPLC, authorisation to accept deposits, in order to lawfully carry on the

    Transferring Business.

    1.3.2 The Transferee is an authorised person in Ireland and will have on and with

    effect from the Initial Effective Date the necessary permissions to carry out

    regulated activities under the laws of Ireland in order to lawfully carry on the

    Transferring Business once transferred pursuant to this Scheme.

    1.3.3 The purpose of the Scheme is to enable the Barclays Group to maintain EEA

    client activity currently carried on by each of the Transferring Entities in

    reliance on the passporting regime pursuant to the Capital Requirements

    Directive (2013/36/EU) and the Markets in Financial Instruments Directive

    (Directiv