Credit Institutions (Stabilisation) Act 2010

PART 2

Direction orders

7.

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) F9 [ any action, or any series of actions that are together designed to achieve a specified objective, ] 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.

Annotations:

Amendments:

F9

Substituted (28.10.2011) by Central Bank and Credit Institutions (Resolution) Act 2011 (27/2011), s. 110(5) and sch. 2 part 5 item 9, S.I. No. 548 of 2011.