On 10 May 2023, HM Treasury published a draft of The Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) (No. 2) Order 2023, along with a draft explanatory memorandum. The draft statutory instrument (SI) makes certain amendments to the law in order to enable powers under Part 1 of the Banking Act 2009 to be used effectively in connection with the sale of Silicon Valley Bank UK Limited (SVB UK) to HSBC UK Bank plc.
The changes made by the draft SI amend the Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014 (CAO) in connection with the application of ring-fencing rules. They provide an ongoing exemption for SVB UK from the ring-fencing regime beyond the existing four-year transition period set out in the existing ring-fencing regime, subject to certain conditions. Those conditions are that:
- SVB UK remains below the core deposit level condition in Article 12 of the CAO.
- HSBC does not transfer its business to SVB UK (or any subsidiary undertakings it may have), other than “permitted business”.
- SVB UK (or any subsidiary undertakings it may have) does not undertake any new business, other than “permitted business”.
The draft SI also makes some minor amendments to the Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) Order 2023.