Credit Institutions (Stabilisation) Act 2010

Credit Institutions (Stabilisation) Act 2010 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2010 Credit Institutions (Stabilisation) Act 2010 Credit Institutions (Stabilisation) Act 2010 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Revised Act Acht Athbh… Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 36 of 2010 CREDIT INSTITUTIONS (STABILISATION) ACT 2010 ARRANGEMENT OF SECTIONS PART 1 Preliminary Section 1. Short title and commencement. 2. Interpretation. 3. Prescribed institutions. 4. Purposes of Act. 5. Independence of Bank and Governor not affected. 6. Relationship framework. PART 2 Direction orders 7. Proposed direction orders. 8. Relevant institution may act in accordance with proposed direction order. 9. Direction orders. 10. Application to vary direction order. 11. Application to set aside direction order. PART 3 Special management 12. Interpretation (Part 3). 13. Proposed special management orders. 14. Special management orders. 15. Application to vary special management order. 16. Application to set aside special management order. 17. Terms of appointment. 18. Remuneration, etc., of special managers. 19. Resignation and vacancy in office, etc. 20. Functions of special managers. 21. Performance of functions of special managers. 22. Effect of appointment of special manager. 23. Powers of special manager to remove officers, employees and others. 24. Relationship between special managers and directors. 25. Special manager not to be director, etc. 26. Extension of special management. 27. Termination of special management. PART 4 Subordinated liabilities 28. Proposed subordinated liabilities orders. 29. Subordinated liabilities orders. 30. Application to vary subordinated liabilities order. 31. Application to set aside subordinated liabilities order. 32. Certain rights of subordinated creditors not exercisable. PART 5 Transfer of assets and liabilities 33. Proposed transfer orders. 34. Transfer orders. 35. Application to vary transfer order. 36. Application to set aside transfer order. 37. Content of transfer order. 38. Financial incentive to transferee. 39. Effect of transfer order — general. 40. Effect of transfer order in relation to securities. 41. Transfer of foreign assets and liabilities. 42. Application of Bankers’ Books Evidence Act 1879. 43. Stamp duty. PART 6 General matters in relation to companies, etc. 44. Minister’s powers in relation to removal of directors, etc. 45. Minister’s powers in relation to appointment of directors, etc. 46. No resolution required, etc. 47. Certain provisions may be included in orders. 48. Directors’ duties. 49. Minister not to be director, etc. 50. Minister’s powers to impose requirements on relevant institutions. PART 7 Miscellaneous 51. Minister may impose certain conditions in relation to financial support. 52. Effect of CIWUD Directive. 53. Act, etc., to over-ride inconsistent provisions. 54. Application of laws in relation to transfers, etc., of credit institutions. 55. Orders in relation to particular relevant institutions. 56. Expression of intention in relation to exercise of powers in relation to particular relevant institutions. 57. Minister’s and Court’s powers under this Act not exclusive of other powers. 58. Minister’s power to take certain proceedings in other jurisdictions. 59. Proposed orders to be kept in confidence. 60. Confidentiality of proceedings. 61. Effect of orders on certain other obligations. 62. Limitation of operation of section 61. 63. Limitation of judicial review. 64. Limitation of certain rights of appeal to the Supreme Court. 65. Application of laws in relation to netting agreements, etc. 66. Saving of legal proceedings, etc. 67. Prohibition of certain secured borrowings. 68. Regulations. 69. Cessation of effect of Act. 70. Disapplication of section 7 of Official Languages Act 2003. PART 8 Amendment of other enactments 71. Amendment of Building Societies Act 1989. 72. Amendment of Central Bank Act 1942. 73. Amendment of Central Bank Act 1971. 74. Amendment of Act of 2008. 75. Amendment of National Asset Management Agency Act 2009. 76. Amendment of National Pensions Reserve Fund Act 2000. 77. Amendment of Regulations of 2004. SCHEDULE 1 Amendments of Acts PART 1 Amendments of Building Societies Act 1989 PART 2 Amendment of Central Bank Act 1942 PART 3 Amendments of Central Bank Act 1971 PART 4 Amendments of Act of 2008 PART 5 Amendment of National Asset Management Agency Act 2009 SCHEDULE 2 Amendments of Regulations of 2004 Acts Referred to Agricultural Co-operative Societies (Debentures) Act 1934 1934, No. 39 Agricultural Credit Act 1978 1978, No. 2 Anglo Irish Bank Corporation Act 2009 2009, No. 1 Asset Covered Securities Act 2001 2001, No. 47 Bankers’ Books Evidence Act 1879 42 & 43 Vict. c. 11 Bills of Sale (Ireland) Acts 1879 and 1883 Building Societies Act 1989 1989, No. 17 Central Bank Act 1942 1942, No. 22 Central Bank Act 1971 1971, No. 24 Central Bank Act 1997 1997, No. 8 Central Bank Reform Act 2010 2010, No. 23 Companies (Amendment) Act 1990 1990, No. 27 Companies Act 1963 1963, No. 33 Companies Act 1990 1990, No. 33 Companies Acts Competition Act 2002 2002, No. 14 Credit Institutions (Financial Support) Act 2008 2008, No. 18 Credit Union Act 1997 1997, No. 15 European Communities Act 1972 1972, No. 27 Finance Act 1970 1970, No. 14 Local Government Act 2001 2001, No. 37 National Asset Management Agency Act 2009 2009, No. 34 National Pensions Reserve Fund Act 2000 2000, No. 33 Netting of Financial Contracts Act 1995 1995, No. 25 Official Languages Act 2003 2003, No. 32 Patents Act 1992 1992, No. 1 Registration of Deeds and Title Acts 1964 and 2006 Registration of Title Act 1964 1964, No. 16 Statutory Instruments Act 1947 1947, No. 44 Taxes Consolidation Act 1997 1997, No. 39 Trade Marks Act 1996 1996, No. 6 Trustee Savings Bank Act 1989 1989, No. 21 Unfair Dismissals Acts 1977 to 2007 Number 36 of 2010 CREDIT INSTITUTIONS (STABILISATION) ACT 2010 AN ACT TO MAKE PROVISION, IN THE CONTEXT OF THE NATIONAL RECOVERY PLAN 2011 - 2014 AND THE EUROPEAN UNION/INTERNATIONAL MONETARY FUND PROGRAMME OF FINANCIAL SUPPORT FOR IRELAND, IN RELATION TO THE STABILISATION, AND THE PRESERVATION OR RESTORATION OF THE FINANCIAL POSITION OF CERTAIN CREDIT INSTITUTIONS; TO AMEND THE BUILDING SOCIETIES ACT 1989 , THE CENTRAL BANK ACT 1971 AND THE CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 FOR THOSE PURPOSES; TO AMEND THE NATIONAL PENSIONS RESERVE FUND ACT 2000 TO ALLOW THE MINISTER FOR FINANCE TO GIVE CERTAIN DIRECTIONS IN RELATION TO THE NATIONAL PENSIONS RESERVE FUND; TO MAKE CONSEQUENTIAL AMENDMENTS TO THE EUROPEAN COMMUNITIES (REORGANISATION AND WINDING-UP OF CREDIT INSTITUTIONS) REGULATIONS 2004 ( S.I. NO. 198 OF 2004 ); AND FOR RELATED PURPOSES. [21st December, 2010] WHEREAS THERE IS A SERIOUS DISTURBANCE IN THE ECONOMY OF THE STATE; AND WHEREAS MEASURES ARE NECESSARY TO ADDRESS A UNIQUE AND UNPRECEDENTED ECONOMIC CRISIS WHICH HAS LED TO DIFFICULT ECONOMIC CIRCUMSTANCES AND SEVERE DISRUPTION TO THE ECONOMY; AND WHEREAS THERE IS A CONTINUING SERIOUS THREAT TO THE STABILITY OF CERTAIN CREDIT INSTITUTIONS IN THE STATE, AND TO THE FINANCIAL SYSTEM GENERALLY; AND WHEREAS IT IS NECESSARY, IN THE PUBLIC INTEREST, TO MAINTAIN THE STABILITY OF THOSE CREDIT INSTITUTIONS AND THE FINANCIAL SYSTEM IN THE STATE; AND WHEREAS IT IS NECESSARY, IN THE INTERESTS OF THE COMMON GOOD, TO CONTINUE THE PROCESS OF REORGANISATION, PRESERVATION AND RESTORATION OF THE FINANCIAL POSITION OF ANGLO IRISH BANK CORPORATION LIMITED BEGUN WITH THE ANGLO IRISH BANK CORPORATION ACT 2009 ; AND WHEREAS THE FUNCTIONS AND POWERS CONFERRED BY THIS ACT ARE NECESSARY TO SECURE FINANCIAL STABILITY AND TO EFFECT A REORGANISATION OF CERTAIN CREDIT INSTITUTIONS; AND WHEREAS IT IS NECESSARY TO AMEND THE EUROPEAN COMMUNITIES (REORGANISATION AND WINDING-UP OF CREDIT INSTITUTIONS) REGULATIONS 2004 ( S.I. NO. 198 OF 2004 ) TO IMPLEMENT DIRECTIVE 2001/24/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 4 APRIL 2001 1 TO PRESERVE OR RESTORE THE FINANCIAL POSITION OF CERTAIN CREDIT INSTITUTIONS; AND WHEREAS THE CONSIDERABLE FINANCIAL SUPPORT PROVIDED BY THE STATE TO CERTAIN CREDIT INSTITUTIONS HAS HELPED THOSE INSTITUTIONS TO MEET THEIR FINANCIAL AND REGULATORY OBLIGATIONS; AND WHEREAS THE STATE WISHES TO PROVIDE FOR THE PERFORMANCE OF THE FUNCTIONS CONFERRED BY THIS ACT IN ORDER TO ACHIEVE THE FINANCIAL STABILISATION OF THOSE CREDIT INSTITUTIONS AND THEIR RESTRUCTURING (CONSISTENTLY WITH THE STATE AID RULES OF THE EUROPEAN UNION) IN THE CONTEXT OF THE NATIONAL RECOVERY PLAN 2011—2014 AND THE EUROPEAN UNION/INTERNATIONAL MONETARY FUND PROGRAMME OF FINANCIAL SUPPORT FOR IRELAND; AND WHEREAS THE COMMON GOOD REQUIRES PERMANENT OR TEMPORARY INTERFERENCE WITH THE RIGHTS, INCLUDING PROPERTY RIGHTS, OF PERSONS WHO MAY BE AFFECTED BY THE PERFORMANCE OF THOSE FUNCTIONS; AND WHEREAS THE URGENT REORGANISATION OF CERTAIN CREDIT INSTITUTIONS IS OF SYSTEMIC IMPORTANCE TO THE STATE; AND WHEREAS IT IS NECESSARY TO MAINTAIN PUBLIC CONFIDENCE IN, AND ENHANCE, THE PROTECTION OF DEPOSITS IN CREDIT INSTITUTIONS GENERALLY; AND WHEREAS IT IS DESIRABLE TO PROMOTE AND FACILITATE INVESTMENT BY PERSONS OTHER THAN THE STATE IN CREDIT INSTITUTIONS TO REDUCE THEIR RELIANCE UPON STATE SUPPORT; AND WHEREAS BECAUSE CERTAIN CREDIT INSTITUTIONS IN THE STATE ARE PARTIES TO CONTRACTS AND OTHER ARRANGEMENTS GOVERNED BY THE LAW OF A STATE OTHER THAN THE STATE; BE IT THEREFORE ENACTED BY THE OIREACHTAS AS FOLLOWS: PART 1 Preliminary Short title and commencement. 1.— (1) This Act may be cited as the Credit Institutions (Stabilisation) Act 2010. (2) 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. (3) An order under subsection (2) may, in respect of the amendments of Acts and Regulations set out in Part 8 and the Schedules, appoint different days for the commencement of amendments of different Acts or Regulations or different provisions of them. Interpretation. 2.— (1) In this Act— “Act of 2008” means the Credit Institutions (Financial Support) Act 2008 ; “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; “Bank” means the Central Bank of Ireland; “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; “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; “debt security” includes a note, bill, bond or similar financial instrument; “direction order” has the meaning given by section 9 ; “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); “financial support” has the same meaning as in the Act of 2008; “Governor” means the Governor of the Bank; “holding company” means a holding company (within the meaning of section 155 of the Companies Act 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; “loan instrument” means a document that creates or acknowledges a debt or liability (other than a deposit account); “memorandum of association” includes, in the case of a credit institution that is established by charter, its charter; “Minister” means the Minister for Finance; “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 2004” means the European Communities (Reorganisation and Winding-Up of Credit Institutions) Regulations 2004 ( S.I. No. 198 of 2004 ); “relevant institution” means (subject to section 55 )— (a) a body— (i) that has its registered office in the State, (ii) that is, or was on the date on which this Act came into operation, a bank licensed under section 9 of the Central Bank Act 1971 , and (iii) to which financial support has been given or is to be given by the Minister, (b) a body that has its chief office in the State and is, or was on the date on which this Act came into operation, a building society within the meaning of the Building Societies Act 1989 , (c) a body that has its chief office in the State and is, or was on the date on which this Act came into operation, a credit union within the meaning of the Credit Union Act 1997 , (d) a person or body prescribed under section 3 , (e) a subsidiary of a person or body referred to in any of paragraphs (a) to (d), and (f) a holding company of a person or body referred to in any of paragraphs (a) to (d); “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; “share” includes a share of any type or class including ordinary shares, preference shares, deferred shares, share warrants and stock and in the case of a building society includes investment shares, special investment shares and deferred shares but does not include share accounts; “special management order” has the meaning given by section 14 ; “special manager” means any person appointed as such by the Court or the Minister; “subordinated creditor” means a creditor of a relevant institution, to any extent that the creditor holds a subordinated liability; “subordinated liability” means, in respect of a relevant institution, an obligation or a liability in the form of a debt security or loan instrument (or any other document howsoever described or constituted) which is expressed to be, or otherwise ranks, subordinate in right of payment to the claims of depositors and unsubordinated creditors of the relevant institution, whether on a winding up or otherwise, and includes a guarantee; “subsidiary” means a subsidiary (within the meaning given by section 155 of the Companies Act 1963 ) or a subsidiary undertaking (within the meaning given by the European Communities (Companies: Group Accounts) Regulations 1992 ( S.I. No. 201 of 1992 )); “subordinated liabilities order” has the meaning given by section 29 ; “transfer order” has the meaning given by section 34 . (2) A reference in this Act to an agreement includes— (a) any instrument (however described) that creates an obligation, whether made in writing or under seal, and without limiting the generality of the foregoing includes an agreement, an arrangement, an undertaking, a scheme, a licence, a security or an obligation, and (b) an oral agreement 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. For the purposes of this subsection “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. Prescribed institutions. 3.— The Minister may make regulations to prescribe a person (including a body corporate that is incorporated after the coming into operation of this Act) for the purposes of paragraph (d) of the definition of “relevant institution” in section 2 (1) if— (a) in the case of a body, it has its registered office, chief office or principal place of business in the State, (b) in the case of an individual, his or her ordinary residence is in the State, (c) all or any of a relevant institution’s assets or liabilities are transferred, after the coming into operation of this section, to the person under this Act, the Companies Acts, the Central Bank Act 1971 , the Building Societies Act 1989 or the Credit Union Act 1997 , and (d) the Minister is of the opinion that it is necessary or desirable for the purposes of this Act that the person be so prescribed. Purposes of Act. 4.— The purposes of this Act are— (a) to address the serious and continuing disruption to the economy and the financial system and the continuing serious threat to the stability of certain credit institutions in the State and the financial system generally, (b) to implement the reorganisation of credit institutions in the State to achieve the financial stabilisation of those credit institutions and their restructuring (consistently with the state aid rules of the European Union) in the context of the National Recovery Plan 2011 - 2014 and the European Union/International Monetary Fund Programme of Financial Support for Ireland, (c) to continue the process of reorganisation, preservation and restoration of the financial position of Anglo Irish Bank Corporation Limited begun with the Anglo Irish Bank Corporation Act 2009 , (d) to continue the process of preservation and restoration of the financial position of building societies through the issue of special investment shares under section 18 (1A) of the Building Societies Act 1989 , (e) to protect the interests of depositors in credit institutions, (f) to address the compelling need— (i) to facilitate the availability of credit in the economy of the State, (ii) to protect the State’s interest in respect of the guarantees given by the State under the Act of 2008 and to support the steps taken by the Government in that regard, (iii) to protect the interests of taxpayers, (iv) to restore confidence in the banking sector and to underpin Government support measures in relation to that sector, and (v) to align the activities of the relevant institutions and the duties and responsibilities of their officers and employees with the public interest and the other purposes of this Act, (g) to preserve and restore the financial position of a relevant institution, and (h) to empower the Court to impose reorganisation measures through orders made in reliance on the CIWUD Directive. Independence of Bank and Governor not affected. 5.— (1) 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 Central Bank Act 1942 ). (2) The Minister may continue to consult with the Governor in the continuing performance of the Minister’s functions and powers under this Act. Relationship framework. 6.— The Minister may from time to time specify a relationship framework in writing to govern the relationship between the Minister and the Governor in relation to the exercise of the Minister’s powers under this Act. PART 2 Direction orders Proposed direction orders. 7.— (1) Subject to subsections (2) and (4), the Minister may make a proposed direction order proposing that a relevant institution be directed to take (within a specified period) or refrain from taking (during a specified period) any action, including, in particular, and without limiting the generality of the foregoing, any one or more of the following: (a) notwithstanding any statutory or contractual pre-emption rights, the listing rules of a regulated market or the rules of any other market on which the shares of the relevant institution may be traded from time to time, issuing shares to the Minister or to another person nominated by the Minister on terms and conditions that the Minister specifies in the proposed direction order at a consideration that the Minister sets; (b) applying for the de-listing of the relevant institution’s shares, or the suspension of their listing, on a regulated market, or to change the listing of the relevant institution’s shares from a regulated market to another multi-lateral trading facility; (c) increasing the authorised share capital (including by the creation of new classes of shares) of the relevant institution to permit it to issue shares to the Minister or to any other person nominated by the Minister; (d) making a specified alteration to the relevant institution’s memorandum of association and articles of association (including, without prejudice to the generality of the foregoing, the alteration of the rights of shareholders or any class of shareholders); (e) disposing, on specified terms and conditions, of a specified asset or liability or a specified part of the relevant institution’s undertaking. (2) The Minister may make a proposed direction order only if the Minister, having consulted with the Governor, is of the opinion that making a direction order in the terms of the proposed direction order is necessary to secure the achievement of a purpose of this Act specified in the proposed direction order. (3) If the Minister makes a proposed direction order in relation to a relevant institution and the intention of it or part of it is the preservation or restoration of the financial position of a credit institution, the Minister shall declare in the proposed direction order that the proposed direction order or part is made with that intention, in accordance with the CIWUD Directive. (4) Unless the relevant institution concerned consents to the making of a direction order in the terms of the proposed direction order, or exceptional circumstances (within the meaning of subsection (5)) exist, the Minister shall also, before making a proposed direction order— (a) deliver a written notice to the relevant institution setting out the terms of the proposed direction order, accompanied by a summary of the reasons why the Minister is of the opinion that a direction order in the terms of the proposed direction order is necessary, (b) afford the relevant institution 48 hours, or a shorter period on which the Minister and the relevant institution agree, in which to make written submissions to the Minister, and (c) consider any submissions made under paragraph (b). (5) Exceptional circumstances for the purposes of subsection (4) exist where— (a) there is an imminent threat to the financial stability of the relevant institution concerned and the Minister is of the opinion that compliance with that subsection would result in significant damage to the financial stability of that relevant institution, (b) there is an imminent threat to the stability of the financial system in the State and the Minister is of the opinion that compliance with that subsection would result in significant damage to the stability of that financial system, or (c) the Minister has reasonable grounds for believing that confidentiality with regard to the proposed direction order, or the possibility of the making of a direction order, would not be maintained and that the breach of such confidentiality would have significant adverse consequences. Relevant institution may act in accordance with proposed direction order. 8.— Where a relevant institution consents to the making of a direction order in the terms of a proposed direction order, it may act in accordance with the terms of the proposed order before the Court makes any direction order. Direction orders. 9.— (1) As soon as may be after completion in relation to a proposed direction order of the procedures required by section 7 , the Minister shall apply ex parte to the Court for an order (in this Act called a “direction order”) in the terms of the relevant proposed direction order. (2) The Court, when hearing an ex parte application under subsection (1), shall, if satisfied that the requirements of section 7 have been complied with and that the opinion of the Minister under that section was reasonable and was not vitiated by any error of law, make a direction order in the terms of the proposed direction order (or those terms as varied after consideration of any submission referred to in section 7 (4)(c)). (3) If in a proposed direction order the Minister has declared the intention of preserving or restoring the financial position of a credit institution, and the Court is satisfied that the Minister made the proposed direction order or part of it with that intention, the Court shall declare in the relevant direction order that the direction order or the relevant part of it is a reorganisation measure for the purposes of the CIWUD Directive. (4) A report prepared by the Bank (whether or not prepared specifically for the purpose of the application) in relation to matters within the Governor’s or the Bank’s responsibilities, including the financial position of the relevant institution, is admissible in evidence at the hearing of the application. (5) The Court may make a direction order in terms varied or amended from those in the proposed direction order only if the Court is satisfied that— (a) there has been non-compliance with any of the requirements of section 7 or that the opinion of the Minister under section 7 (2) 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 (4), and (c) to do so is necessary for the purpose specified in the proposed direction order or any other purpose of this Act. (6) The Court may give a direction, as it thinks appropriate, in relation to the publication of a direction order. (7) Subject to subsection (8), a direction order has effect— (a) if an application is made under section 11 , in accordance with that section, and (b) if no such application is made, 5 working days after the making of the order. (8) The Court shall order that a direction order or a term of a direction order has effect immediately where the Court is satisfied that the purpose of the order or term is— (a) to ensure the immediate and effective issuance of additional share capital in the relevant institution concerned by issuing shares to the Minister or his or her nominee— (i) to prevent or remedy an imminent breach of the regulatory capital requirements applicable to the relevant institution, or (ii) to enable the relevant institution immediately to meet regulatory capital targets set by the Bank, (b) to address an imminent threat to the financial stability of the relevant institution concerned, or (c) to address an imminent threat to the stability of the financial system in the State. (9) The Court may order in a direction order that action taken by a relevant institution in accordance with section 8 shall be taken to have been taken in compliance with the direction order. Application to vary direction order. 10.— The Minister may apply— (a) on notice, or (b) in urgent circumstances, ex parte, to the Court to vary a direction order if the Minister is of the opinion that the variation is necessary to secure the achievement of a purpose of this Act. Application to set aside direction order. 11.— (1) The relevant institution in relation to which a direction order is made or a member of that institution may apply to the Court by motion on notice grounded on affidavit, not later than 5 working days after the making of a direction order, for the setting aside of the direction 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 with regard to the hearing of the application as it considers appropriate in the circumstances. (3) On an application under subsection (1), the Court shall set aside the direction order only if it is of the opinion that there has been non-compliance with any of the requirements of section 7 or that the opinion of the Minister under section 7 (2) was unreasonable or vitiated by an error of law. (4) The Court may, instead of setting aside the direction 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 7 or that the opinion of the Minister under section 7 (2) 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 section 9 (4), and (c) to do so is necessary to secure the achievement of the purpose specified in the direction order or any other purpose of this Act. (5) An order under subsection (3) is effective, from the date of its making, to set aside the direction order without prejudice to the validity of anything previously done or taken to have been done under the direction order. (6) An order under subsection (4) has effect, from the date of its making, to vary or amend the direction order without prejudice to the validity of anything previously done or taken to have been done under the direction order. PART 3 Special management Interpretation (Part 3). 12.— For the purposes of this Part, a relevant institution is under special management if the Court has made a special management order in relation to it, and the special management has not terminated under section 27 . Proposed special management orders. 13.— (1) Subject to subsections (2), (3) and (5), the Minister may make a proposed special management order under this section where the Minister decides that a person who has, in the Minister’s opinion, the requisite knowledge, expertise and experience of the financial services sector to be the special manager of a relevant institution should be appointed as the special manager of that relevant institution. (2) The Minister may make a proposed special management order only if the Minister, having consulted with the Governor, is of the opinion that making a special management order in the terms of the proposed special management order is necessary to secure the achievement of a purpose of this Act specified in the proposed direction order. (3) If the Minister makes a proposed special management order in relation to a relevant institution and the intention of it or part of it is the preservation or restoration of the financial position of a credit institution, the Minister shall declare in the proposed special management order that the proposed special management order or part is made with that intention, in accordance with the CIWUD Directive. (4) Unless the relevant institution concerned consents to the making of a special management order in the terms of the proposed special management order, or exceptional circumstances (within the meaning of subsection (5)) exist, the Minister shall also, before making a special management order— (a) deliver a written notice to the relevant institution setting out the terms of the proposed special management order, accompanied by a summary of the reasons why the Minister is of the opinion that a special management order in the terms of the proposed special management order is necessary, (b) afford the relevant institution 48 hours, or a shorter period on which the Minister and the relevant institution agree, in which to make written submissions to the Minister, and (c) consider any submissions made under paragraph (b). (5) Exceptional circumstances for the purposes of subsection (4) exist where— (a) there is an imminent threat to the financial stability of the relevant institution concerned and the Minister is of the opinion that compliance with that subsection would result in significant damage to the financial stability of that relevant institution, (b) there is an imminent threat to the stability of the financial system in the State and the Minister is of the opinion that compliance with subsection (4) would result in significant damage to the stability of that financial system, or (c) the Minister has reasonable grounds for believing that confidentiality with regard to the proposed special management order, or the possibility of the making of a special management order, would not be maintained and that the breach of such confidentiality would have significant adverse consequences. (6) The proposed special management order shall— (a) name the person to be appointed as the special manager, or (b) name a firm all of whose members shall be taken to be appointed as special managers. (7) The proposed special management order shall include the proposed terms of appointment of the special manager, and may— (a) specify particular matters that are to be reserved for decision or approval by the Minister, or (b) direct the special manager (subject to regulatory requirements) to take particular action or refrain from taking particular action. Special management orders. 14.— (1) As soon as may be after completion in relation to a proposed special management order of the procedures required by section 13 , the Minister shall apply ex parte to the Court for an order (in this Act called a “special management order”) in the terms of the proposed special management order. (2) The Court, when hearing an ex parte application under subsection (1), shall, if satisfied that the requirements of section 13 have been complied with, and that the opinion of the Minister under that section was reasonable and was not vitiated by any error of law, make a special management order in the terms of the proposed special management order (or those terms as varied after consideration of any submission referred to in section 13 (4) (c)). (3) A report prepared by the Bank (whether or not prepared specifically for the purpose of the application) in relation to matters within the Governor or the Bank’s responsibilities, including the financial position of the relevant institution, is admissible in evidence at the hearing of the application. (4) If in a proposed special management order the Minister has declared the intention of preserving or restoring the financial position of a credit institution, and the Court is satisfied that the Minister made the proposed special management order or part of it with that intention, the Court shall declare in the relevant special management order that the special management order or the relevant part of it is a reorganisation measure for the purposes of the CIWUD Directive. (5) The Court may make a special management order on terms varied or amended from those in the proposed special management order only if it is of the opinion that— (a) there has been non-compliance with any of the requirements of section 13 or that the opinion of the Minister under section 13 (2) 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 (3), and (c) to do so is necessary to secure the achievement of the purpose specified in the proposed special management order or any other purpose of this Act. (6) The Court may give a direction, as it thinks appropriate, in relation to the publication of a special management order. (7) A special management order is effective immediately on its making, subject to the right of application under section 16 . Application to vary special management order. 15.— The Minister may apply— (a) on notice, or (b) in urgent circumstances, ex parte, to the Court to vary a special management order if the Minister is of the opinion that the variation is necessary to secure the achievement of a purpose of this Act. Application to set aside special management order. 16.— (1) The relevant institution in relation to which a special management order is made or a member of that institution may apply to the Court by motion on notice grounded on affidavit, not later than 5 working days after the making of a special management order, for the setting aside of the special management 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 with regard to the hearing of the application as it considers appropriate in the circumstances. (3) On an application under subsection (1), the Court shall set aside the special management order only if the Court is satisfied that there has been non-compliance with any of the requirements of section 13 or that the opinion of the Minister under section 13 (2) was unreasonable or vitiated by an error of law. (4) The Court may, instead of setting aside the special management 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 13 or that the opinion of the Minister under section 13 (2) 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 sub section 14 (3), and (c) to do so is necessary to secure the achievement of the purpose specified in the special management order or any other purpose of this Act. (5) An order under subsection (4) is, from the date of making it, effective to vary or amend the special management order without prejudice to the validity of anything previously done under the special management order. (6) If the Court sets aside a special management order, the appointment of the special manager shall be taken to have been terminated. However— (a) he or she remains entitled to be paid, out of the assets of the relevant institution, his or her costs, expenses and remuneration, and (b) the termination does not render invalid anything done by the special manager under the special management order. Terms of appointment. 17.— (1) The period of the special management of a relevant institution is 6 months from the making of the relevant special management order (whether that order is made under subsection (2) or (5) of section 14 ). (2) The terms and conditions of appointment of a special manager (other than the period of his or her appointment) are as set out in the relevant special management order. Remuneration, etc., of special managers. 18.— (1) A special management order shall fix the basis of the calculation of the costs, expenses and remuneration payable to the special manager, and may do so in respect of work done before the making of the special management order. (2) A special manager is entitled to be paid his or her costs, expenses and remuneration, and to retain the amount of those costs, expenses and remuneration, out of the revenue of the business of the relevant institution or the proceeds of the realisation of the assets (including investments) or other funds available to the relevant institution. Resignation and vacancy in office, etc. 19.— (1) A special manager may resign by giving 2 months’ written notice addressed to the Minister. (2) The Minister may remove the special manager for any reason. (3) If a special manager resigns or is removed, the Minister may appoint another special manager by instrument in writing. (4) The resignation or removal of a special manager does not terminate the special management of the relevant institution concerned. Functions of special managers. 20.— (1) The special manager of a relevant institution shall take over the management of the business of the relevant institution and shall carry on that business as a going concern with a view to preserving and restoring the financial position of the relevant institution, or the whole or any part of its business, in a manner consistent with the achievement of the purposes of this Act. (2) Without limiting the generality of subsection (1), the special manager of a relevant institution has the power to acquire and dispose of any asset or all the assets, and any liability, of that institution. (3) A reference in subsection (2) to disposing of an asset or a liability includes selling or otherwise transferring, and creating a security or equitable interest in, the asset or liability. (4) The special manager of a relevant institution has, in relation to the relevant institution, all powers necessary for or incidental to the special manager’s functions, including the sole authority over and direction of all officers and employees of the relevant institution. (5) The special manager of a relevant institution shall take such steps as he or she determines to be appropriate to remedy the matters that led to the making of a special management order in relation to the relevant institution, and for that purpose may, unless the special management order provides otherwise, appoint advisors to the relevant institution. (6) A special manager may, with the consent of the Minister and the Governor, substitute his or her own decision for any decision that would otherwise be made by the shareholders, and if he or she does so, the decision shall be taken to be the decision of the shareholders. (7) The appointment of a special manager of a relevant institution does not relieve the relevant institution of any obligation to comply with any applicable laws and regulatory requirements and with any directions given by the Bank or the Minister to the relevant institution under any enactment. (8) The special manager of a relevant institution shall provide such reports and other information to the Bank and the Minister as the Bank or the Minister requests, notwithstanding any other enactment or any rule of law, code of practice, agreement, duty or obligation to any person. The obligation under this subsection is in addition to the obligations of the relevant institution to provide information and make returns to the Bank or the Minister. Performance of functions of special managers. 21.— (1) A special manager may perform his or her functions with the assistance of persons appointed or employed by him or her for that purpose. (2) A special manager may, with the consent of the Minister, apply to the Court to determine any question arising in the course of the special management. Effect of appointment of special manager. 22.— (1) While a relevant institution is under special management— (a) all functions which, but for this paragraph, would be vested in the directors of the relevant institution (whether by virtue of its memorandum of association or articles of association or otherwise) vest in the special manager, (b) no proceedings for its winding up shall be commenced without the prior consent in writing of the Minister, (c) a resolution for its winding up is of no effect without the prior consent in writing of the Minister, (d) no petition can be presented for the appointment of an examiner to the relevant institution or to a related company (within the meaning of section 4 (5) of the Companies (Amendment) Act 1990 ) without the prior consent in writing of the Minister, (e) no inspector can be appointed or an inquiry commenced under the Companies Act 1990 without the prior consent in writing of the Minister, (f) subject to subsection (2), no receiver over any part of the property of the relevant institution shall be appointed without the prior consent in writing of the Minister, (g) subject to subsection (2), no enforcement (whether by attachment, sequestration, distress or execution) of any judgment or order shall be put into force against any part of the property of the relevant institution without the prior consent in writing of the Minister, unless the party seeking to do so is the Minister, (h) subject to subsection (2), where any claim against a relevant institution is secured by security affecting the whole or any part of the assets of the relevant institution, any person other than the Minister who wishes to realise the whole or any part of that security shall give written notice to the Minister 90 days (or a shorter period to which the Minister agrees) before such realisation, and (i) if the special manager so elects, the powers of the relevant institution exercisable by a general meeting of the relevant institution are exercisable only by the special manager and subject to the prior consent in writing of the Minister. (2) Paragraphs (f), (g) and (h) of subsection (1) do not apply to the Bank, the European Central Bank or any other national central bank within the Eurosystem. (3) Except as provided by this Act, the business of a relevant institution under special management shall continue without interruption as a going concern, and no agreement (including a contract of employment or service), policy, transaction, bank account or bank mandate, right, title, claim, debt, proceeding or obligation of the relevant institution or right, claim or proceeding against it is avoided, cancelled, stayed or otherwise affected by reason only of the appointment of the special manager. (4) While a relevant institution is under special management— (a) the relevant institution shall not convene or hold any general meeting unless the special manager so directs, (b) the rights and powers of shareholders and members under any enactment or relevant agreement stand suspended and are not exercisable, (c) section 205 of the Companies Act 1963 does not apply, and (d) no derivative action may be brought in respect of the relevant institution. Powers of special manager to remove officers, employees and others. 23.— (1) The special manager of a relevant institution may, with the consent of the Minister, and shall, if so directed by the Minister, remove any person from— (a) a position of director, secretary or other officer of the relevant institution or any of its subsidiaries, or (b) any of the following positions: (i) a position of employment with the relevant institution or any of its subsidiaries; (ii) an executive position and any such position held by virtue of being a director or secretary of the relevant institution or any of its subsidiaries; (iii) a consultancy to the relevant institution or any of its subsidiaries. (2) The removal of a person by virtue of subsection (1)— (a) has effect without the need for any notice being given, meeting being called, resolution being passed or consent being obtained, and (b) may be expressed to take effect immediately and, if so expressed, has that effect. (3) Nothing in subsection (1) or (2) deprives a person of any right to claim compensation or damages from the relevant institution for the loss of his or her office or appointment. However— (a) a court, tribunal or rights commissioner may not grant any remedy that would have the effect of preventing or restraining the special manager from exercising the special manager’s powers under this section, and (b) a court, tribunal or rights commissioner may not make an order under the Unfair Dismissals Acts 1977 to 2007 for the reinstatement or re-engagement of such a person. Relationship between special managers and directors. 24.— (1) The special manager appointed to a relevant institution shall— (a) determine the role (if any) of the directors and officers of the relevant institution and its subsidiaries during the special management, and (b) determine the remuneration (if any) to be paid to the directors and officers of the relevant institution and its subsidiaries during the special management. (2) A determination of a special manager under paragraph (a) or (b) of subsection (1) is binding on the relevant institution or its subsidiaries (as the case may be) and the directors of the relevant institution or its subsidiaries. (3) A director or other officer of a relevant institution or a subsidiary of a relevant institution that is under special management remains bound to discharge his or her duties and obligations under any enactment or rule of law except to any extent that he or she is relieved of that duty or obligation by the special manager or by a provision of this Act. (4) Nothing in this section or any determination under it has the effect of— (a) rendering lawful any contravention of any enactment or rule of law that took place before the commencement of a special management or takes place after the end of a special management, (b) relieving any person from any obligation— (i) to comply at any time, with any such enactment or rule of law, or (ii) to fulfil any duty at any time, or (c) precluding any proceedings brought or to be brought in relation to a contravention, or the breach of an obligation, referred to in paragraph (a) or (b). (5) Nothing in this section affects the duty of directors under section 48 or authorises the special manager to do so. Special manager not to be director, etc. 25.— A special manager of a relevant institution shall not 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 of the relevant institution or any of its subsidiaries. Extension of special management. 26.— The special management of a relevant institution may be extended in accordance with the procedure set out in sections 13 and 14 . Section 16 applies to any order extending the special management. Termination of special management. 27.— (1) The special management of a relevant institution terminates— (a) at the end of the period of 6 months referred to in section 17 (1), (b) on the making of an order for the winding up of the relevant institution, (c) on the making of an order under the Companies (Amendment) Act 1990 appointing an examiner to the relevant institution, or (d) if the Minister so orders. (2) The Minister shall lay a copy of an order under subsection (1)(d) before each House of the Oireachtas. PART 4 Subordinated liabilities Proposed subordinated liabilities orders. 28.— (1) Subject to subsections (2) and (5) the Minister may make a proposed subordinated liabilities order in relation to the subordinated liabilities of a relevant institution to which the Minister has provided or intends to provide financial support under the Act of 2008 only if— (a) the Minister has consulted with the Governor, and (b) after so consulting, the Minister is of the opinion that the making of a subordinated liabilities order in the terms of the proposed subordinated liabilities order is necessary for preserving or restoring the financial position of the relevant institution with the consequence of affecting (including reducing) the rights of subordinated creditors existing before the order. (2) In considering whether to make a proposed subordinated liabilities order in relation to a relevant institution the Minister shall have regard to such of the following matters as the Minister considers appropriate: (a) the amount of the indebtedness of that institution to its subordinated creditors relative to its assets; (b) the extent and nature of financial support provided or to be provided to that institution by the Minister under the Act of 2008 or otherwise; (c) without prejudice to paragraph (b), the extent to which the State has, in particular, provided financial support by way of equity investment (or equivalent) in that institution; (d) the quantum of the financial support relative to that institution’s balance sheet; (e) the viability of that institution in the absence of that financial support; (f) the present and likely future ability of that institution to raise equity capital from market sources; (g) the likely extent to which the subordinated creditors would be repaid amounts owing to them in a winding up of that institution in the absence of such financial support; (h) the effectiveness or likely effectiveness of liability management exercises undertaken by that institution in respect of its subordinated liabilities. (3) A proposed subordinated liabilities order may make provision for— (a) any one or more or all of the matters referred to in subsection (4), and (b) the granting of a shareholding in the relevant institution to the subordinated creditors affected by the order or any class of them. (4) The matters referred to in subsection (3) are the following: (a) the postponement, termination, suspension or other modification of specific rights, liabilities, terms and obligations associated with all or any of such subordinated liabilities including (without limiting the generality of the foregoing) any or all of the following rights, terms and obligations: (i) the payment of interest; (ii) the repayment of principal; (iii) what constitutes an event of default; (iv) collective action provisions; (v) the timing of obligations; (vi) the due date; (vii) the applicable law; (viii) the right to declare, specify or determine an event of default; (ix) any right to enforce payment, whether by winding-up or otherwise; (b) requiring the relevant institution to acquire those liabilities for a specified consideration, including a consideration calculated on the assumption that the State— (i) has not provided and will not provide financial support to that institution, and (ii) has not made and will not make any investment in that institution. (5) Unless the relevant institution concerned consents to the making of a subordinated liabilities order in the terms of the proposed order, or exceptional circumstances (within the meaning of subsection (6)) exist, the Minister shall also, before making a proposed subordinated liabilities order— (a) deliver a written notice to the relevant institution setting out the terms of the subordinated liabilities order, accompanied by a summary of the reasons why the Minister is of the opinion that such an order is necessary, (b) afford the relevant institution 48 hours, or a shorter period on which the Minister and the relevant institution agree, in which to make written submissions to the Minister, and (c) consider any submissions made under paragraph (b). (6) Exceptional circumstances for the purposes of subsection (5) exist where— (a) there is an imminent threat to the financial stability of the relevant institution concerned and the Minister is of the opinion that compliance with that subsection would result in significant damage to the financial stability of that relevant institution, (b) there is an imminent threat to the stability of the financial system in the State and the Minister is of the opinion that compliance with subsection (5) would result in significant damage to the stability of that financial system, or (c) the Minister has reasonable grounds for believing that confidentiality with regard to the subordinated liabilities order, or the possibility of the making of a subordinated liabilities order, would not be maintained and that the breach of such confidentiality would have significant adverse consequences. (7) The power to make an order in relation to any of the matters referred to in subsection (4) is independent of, and may be exercised independently of, the power to make such an order in relation to any other such matter. Subordinated liabilities orders. 29.— (1) As soon as may be after completion in relation to a proposed subordinated liabilities order of the procedures required by section 28 , the Minister shall apply ex parte to the Court for an order (in this Act called a “subordinated liabilities order”) in the terms of the proposed subordinated liabilities order. (2) The Court shall, when hearing an ex parte application under subsection (1), if satisfied that the requirements of section 28 have been complied with and that the opinion of the Minister under section 28 (1)(b) was reasonable and was not vitiated by any error of law, make a subordinated liabilities order in the terms of the proposed subordinated liabilities order (or those terms as varied after consideration of any submission referred to in section 28 (5)(c)). (3) A report of the Bank relating to— (a) the financial state of the relevant institution concerned at a particular time or times, (b) the extent of the State’s support of the relevant institution, (c) the amount of recovery that would have been made at a particular time or times by subordinated creditors of the relevant institution without State support, (d) the amount of recovery that would have been made at a particular time or times by subordinated creditors of the relevant institution if it had been wound up or had been unable to continue as a going concern, (e) any of the matters referred to in section 28 (2), is admissible in evidence at the hearing of the application, whether or not prepared for the purposes of the application. (4) The Court may make a subordinated liabilities order on terms varied or amended from those in the proposed subordinated liabilities order only if the Court is satisfied that— (a) there has been non-compliance with any of the requirements of section 28 or that the opinion of the Minister under section 28 (1) (b) 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 (3), and (c) to do so is necessary to secure the achievement of the purpose specified in the proposed subordinated liabilities order. (5) The Court may give a direction, as it thinks appropriate, in relation to the publication of a subordinated liabilities order. ( …