I welcome you back, Mr. Hood. It is a pleasure to serve under your chairmanship. Before we adjourned earlier today, my hon. Friend the Member for Wellingborough raised an issue that I endorse. He said that it would be helpful, when discussing the issue of partial transfers, if the Government would give the Committee the benefit of their experience of the partial transfers that have already occurred under the existing regime of the Banking (Special Provisions) Act 2008that is, in respect of Bradford & Bingley, Kaupthing and Heritable.
Another issue addressed in the Treasury consultation paper on safeguards for partial property transfers published last week relates to security interests, which are the interests the lender has in the property collateral of the party to whom they have lent on a secured basis. This has been an area of concern, in that the provisions could result in disruption and make it difficult for the security holder to enforce security, which would set London banks at a competitive disadvantage.
The special resolution regime consultation proposed the transfer of all liabilities to the new company with the related collateral or not at all. Concerns have been raised that the proposal may limit flexibility from the Governments perspective because of floating charges. The Government have clearly considered how floating charges should be addressed and, as I understand the position, they have decided not to go for maximum flexibility but to provide some certainty and security. We welcome that, but I should be grateful if the Minister could confirm the approach set out in the consultation paper and elaborate for the Committees better understanding the Governments thinking in that area.
I understand that the safeguard will restate the legal requirement to respect the integrity of security interests covered by the financial collateral directive. Will the Minister give the Committee some guidance as to whether it should be the financial collateral directive or the regulations made under it for the purposes of UK lawthe Financial Collateral Arrangements (No. 2) Regulations 2003? I believe that they are wider than the directive. It would be helpful to know whether any consideration was given to using the regulations rather than the directive as the basis for these provisions. Were any considerations given to the use of secondary legislation referring to regulations rather than the directive? The draft statutory instrument refers to the directive rather than the regulations.
Another issue has come up with regard to structured finance. Again, the Government are keen to ensure that there is no disruption to structured finance arrangements and we welcome that. There is nothing on that point in the draft order, which seems to be at an early stage, so it is difficult for the Committee to discuss the provisions at great length or in detail, although we welcome the principles guiding the Governments action.
As I stated this morning, it is vital that the safeguards in place as a consequence of clauses 42 and 43 are effective, to protect the competitive position of London banks. However, I should like to highlight one area where we are not in a position to assess the status of the proposed legislation and proposed secondary legislationenforcement. What happens if things go wrong? If a transfer falls within a class prohibited by the ordercurrently the draft restriction of partial transfers orderwhat will happen? We have to look at regulation 6(5) of the draft order, which at the moment merely states in square brackets:
The steps are to remedy the breach identified in the notice.
Perhaps the Minister can provide some clarification about exactly what steps will be taken to remedy any breach, because that is important and it is necessary to ensure that partial transfer takes effect to produce a result that is not incompatible with the relevant safe harbours, which we spent some time discussing this morning. If something is in a safe harbour, it is important that it is properly protected and that the harbour is safe.
That is another example of our being somewhat short of details. The document published last Thursday is helpful; there is some indication of movement in the right direction in the view of industry bodies that have been concerned about the proposals, particularly the idea of moving awayin the context of netting the set offfrom master netting agreements to incorporate bespoke agreements, which seems to have a lot to be said for it. However, there are still a large number of areas where the drafting is at an early stage or non-existent, which makes it difficult for the Committee to debate the provisions as effectively as we should do.
The matter is at the heart of the concerns raised by outside bodies about the competitiveness of the UK banks, yet we are having to consider it without knowing where we shall end up, because the key parts are not clauses 42 and 43no amendments of any substance have been tabled or proposed for those clausesbut relate to secondary legislation that is at draft stage. Although things have moved considerably since the first meeting of the expert liaison group on 31 October, the document, from which I have quoted at some length today, was published only last Thursday so industry groups may not have had an opportunity to digest all its finer detail and to convey their thoughts to Committee members.
I return to a point made by my hon. Friend the Member for Gosport at the beginning of the stand part debate: whether the Government should consider the proposal made by the London Investment Banking Association, among others, that the provisions relating to partial transfers be implemented at a later date to ensure that we get them right and that we do not fall into some of the difficulties that the Government themselves recognise. I raise the matter not in an attempt to push the Government into a cornerfar from itbut to urge the Minister at least not to rule out that possibility, because although we are debating something important today, it is not clear what we shall end up with.
I do not want overly to anticipate our debate on clause 65. However, outside bodies are looking for assurances about greater certainty in this area, and clause 65, which enables the Government to change the statute by statutory instrument, undermines that certainty. That has to be taken into account when we consider the package as a whole.
The Government are moving in the right direction, although concerns remain about the provisions we have, and even greater concerns about those we do not have. I therefore urge the Minister to do all that he can to address them, or at least to be prepared to take this aspect of the Bill in a steadier way, without jeopardising the implementation of the Bill as a whole, so that we get this area of legislation right.
We have reached what is perhaps the most controversial part of the Bill. Against the backdrop of the current economic crisis, we may have a tendency to rush through the clauses on partial transfer. We are moving against all the rules of the market; the essence of the Bill is not to let the rules of the market apply but to intervene to stabilise the financial situation.
Many people can understand taking a whole bank and nationalising it. They can understand a whole bank being part of a fire sale to the private sector. We have seen that happen in the past and we understand the implications. A fire sale would mean that the shareholders would lose a lot of money, but the creditors would still be ranking in the business. Nationalisation would result in a huge loss to the shareholders but the liabilities would go across with the bank. Creditors who are not depositors will lose out significantly with partial transfer.
I am still struggling to understand how the Bradford & Bingley situation was managed. It would help if we hadeven if only for my benefitan idiots guide to the process that the Government went through. They did it in exceptional circumstances and seem to have pulled off something that is generally welcomed, but I am not sure what the outcome will be. In effect, we have two banks: the good bank and the bad bank. The good bank went off to Abbey Santander and the bad bank is left, but I do not know what it is worth.
Under the clauses that we have already debated the Government are allowed to send bad bits back to the rump bank. I do not know whether it is intended that in most cases the rump bank or the bad bank will then go into administration. I am not clear about whether the money from a partial sale to the private sector goes to the original shareholders or whether it is used to pay off creditors in a ranking order. I am not sure about any of these things. Because the detail is left to regulations, we are struggling.
This is probably the most important part of the whole Bill. We could proceed with the Bill and leave these clauses until a later stage when we have much more detail. The Conservatives want to get the Bill right. It is a measure that we hope no one ever has to use. We are dealing with concepts that are so strange and unusual that more time on these provisions would be most useful. We have already had to deal with default clauses, yet all the things that would normally happen under them are not in the Bill. It would help if the Minister could tell the Committee where we are with the only concrete partial sale that has occurredalbeit some time ago, in relative termsBradford & Bingley.
I am not arguing for the commercial details but for the general principlesthe way in which the sale happened, how it occurred, who will get what from where and the likely outcome. A concrete example for dealing with partial sales would help the Committee enormously. I take the point made by my hon. Friend the Member for South-West Hertfordshire: it would be hugely damaging if we got things wrong and there was a feeling in the global marketplace that it was best not to do business in Britain because if something went wrong the business would lose much more than if it were based elsewhere. We hope that the provisions are never enforcedof course, if we have a new Government they never will be enforced because everything will be milk and honey from then onbut I accept that we must look seriously at the possibility of that happening somewhere down the line, in 20 or 30 years. We do not want to lose 20 or 30 years of business because we got one part of the Bill wrong.
I recognise the need for the Bank and other bodies working with the Treasury to have exceptional powers to deal with exceptional difficulties. We have a set of circumstances that require the Government to take unusual measures, but it worries me that the rules that we are considering will wipe out all the rules of private enterprise and virtually give the Government an opportunity to start with a clean white sheet of paper on which to write their own plot. Which of the provisions do the Government intend to be temporary and which permanent? Perhaps the Minister will find that question difficult, because he will know, as I do, that the world we go back to in 2012 or 2015, when the current difficulties are over, will not be the world of 2004 and 2006. We will not immediately go back to freedom of credit. If the Minister could essay an answer, I should be grateful for his comments.
We intend the Bill to put in place a permanent special resolution regime. We have been clear that there are things that are right and appropriate to put into primary legislation and that other matters rightly should be the province of secondary legislation, which is still permanent but where there is greater ability to make changes urgently. Other things are in the code and will be reviewed from time to time. The debate throughout the Committee stage has been about what is most appropriately put in which boxprimary legislation, secondary legislation or a code. I hope that helps the hon. Gentleman.
I am grateful to the Minister. We have had an exchange a bit like this before, whenperhaps as a tribute to my incredibly advanced yearsI was harking back to the days when the Bank of England was able to carry out its negotiations and discussions behind closed doors. The Minister pointed out that we have to move on, that we have to recognise that we are in the 21st century and that such outdated practices are no longer possible. I regret that the old idea of the Bank working quietly and privately is no longer possible, because the proposed structure is undoubtedly mechanistic and gives the Government powers that they have never had before.
I express caution on behalf of the banking professionincluding the British Bankers Association and otherswhich is concerned that we should not put permanent legislation in place until a great deal of thought has been given to the overall structure. We are where we are, and we have some way to go yet in the Bill, but I put these comments down as a marker to Government and support my hon. Friend the Member for South-West Hertfordshire in expressing concern about the comprehensive nature of the powers that can be given to Government.
I fully appreciate stakeholders concerns about the Bills partial transfer provisions. We have talked to stakeholders about them on many occasions and, as the Committee will be aware, we have held three rounds of formal public consultation, an extensive series of stakeholder workshops and meetings between February and September 2008, and have published draft clauses from the most complex part of the Billthe special resolution regime. The most recent round of consultation was about the safeguards on partial property transfers. The hon. Member for South-West Hertfordshire raised many issues that appear in the consultation document. Those who take an interest in our proceedings will have noted what he said, and we will consider fully all the representations that he has made as we seek to refine the special resolution regime safeguards.
The Committee will be aware by now that clauses 42, 43 and 55 and the secondary legislation contain a number of legislative safeguards to protect bank creditors and counterparties in a partial transfer. The Government recognise particularly the importance that market participants attach to netting arrangements and security interests. For example, legal certainty with respect to a netting agreement is vital for risk management. Therefore, in responding to stakeholder concerns, we are consulting on the details of three key safeguards.
First, clause 43 contains a safeguard to protect the set-off and netting arrangements on which so many bank counterparties rely. Secondly, it provides for a safeguard to protect security interests so that creditors with a fixed or floating charge retain recourse to their collateral. Thirdly, clause 55 contains a safeguard that will provide compensation for creditors left in the residual bank, to ensure that they are made no worse off than if the whole bank had been wound up: in other words, had the authorities not intervened.
The safeguards are important and should give market reassurance so that the potential problems alluded to by the hon. Member for South-West Hertfordshire and others will not arise in practice. In addition, the code of practice will set out the types of circumstance in which the authorities would wish to consider a partial transfer. Building on the work done so far, the Government will continue to work with stakeholders to develop the safeguards and the other secondary legislation.
I welcome the comments made by the hon. Member for South-West Hertfordshire recognising that the Government have been listening and continue to engage in dialogue. As he is aware, we have established a new expert liaison group, which will help prepare the secondary legislation on the special resolution regime. On other occasions, I have referred to the process as one of co-production. We want to get it right. The expert liaison group has already provided valuable input on the detailed nature of the safeguards, and the consultation document reflects some of its initial views, but there are a lot more opportunities for the expert liaison group and stakeholders more widely to contribute.
I am grateful to the Minister. It is encouraging that there are a lot more opportunities for the expert liaison group to make contributions. His comments have highlighted the fact that we are at quite an early stage of the process of developing the various safeguards. I know that he said that the Treasury will hear the representations made during the debate, but these proceedings should not be just part of a consultation process. We are the law-makers, yet it seems to me that the law is being made after Parliament has had the opportunity to scrutinise and debate these matters. The consultation seems to be lagging behind Parliament, because we should now be debating something pretty near its final form.
I shall say more on the timing in a few moments. However, it is not necessarily abnormal for the Government to seek to pass primary legislation and then to implement secondary legislation later. We are going through the normal procedures of both Houses. On Second Reading, several Opposition Members expressed concern about the time it had taken the legislation to reach that stage. We have very good co-operation with stakeholders, and we want to continue to work with them to ensure that we get the legislation right.
Clause 42 provides the Treasury with a power to place restrictions on partial transfers. Although the Government are not proposing to place broad legislative restrictions on partial transfers, it is still beneficial to include the clause, as I shall explain. The clause provides the authorities with the means to place restrictions on the nature of the partial transfers that they may effect through use of the property transfer powers provided by this part of the Bill. The making of restrictions has the potential to provide bank stakeholders with greater certainty about how the property transfer powers will be used to effect partial transfers. That could be through a particular strict condition, or through a more general restriction on when and how partial transfers would be executed. Given the nature of the powers, stakeholder interest and the technical complexity of the issue, the Government consider it appropriate to take a power in the Bill to provide for restrictions to be made as the authorities deem appropriate. For example, if further consultation with stakeholders reveals a particular facet of partial transfers that the authorities may wish to restrict in order to provide greater certainty to the market, the clause provides the mechanism through which that can be achieved.
As I have already noted, the range of ways in which the authorities may restrict partial transfers is purposely broad. The flexibility reflects the complex range of issues likely to be generated in different bank resolutions. The Government consider it appropriate and desirable for safeguards of this nature to be provided in secondary legislation, rather than in the Bill. Any order made under such a power would need to make provision at a level of detail inappropriate to primary legislation. That reflects the complexity of bank resolutions and of the property, rights and liabilities of banks. It will be important to retain flexibility, including the flexibility to amend or add to the nature of the restrictions placed on partial transfers.
I remind the Committee that the SRR is a new legislative regime. Experience may show that partial transfers should be more or less restricted than initially thought, to respond to continuing market reaction to the powers, or to the authorities developing practical expertise in resolving banks in difficulty. At the very least, the nature of the restrictions will need to be updated in line with innovation in the financial markets. However, in view of the significance of the issues addressed by the power, and in view of the standing nature of the provision to be made, the power is subject to the draft affirmative procedure. In addition, the Government are committed to consulting fully on the key elements of the secondary legislation for the safeguard.
To that end, the Government are consulting on what secondary legislation should be made under clause 42. At this stage, we propose that the power should be used to place restrictions on reverse property transfers. The restrictions are designed to provide certainty to creditors transferred to a bridge bank that they will not be moved back to the residual bank. However, this is not a closed book. Further consultation with stakeholders may determine that further restrictions are appropriate. What is important, however, is that the authorities have the means to put the restrictions in place in an appropriate way, preserving market confidence in the use of the property transfer powers. The clause provides those means.
Clause 43 provides a key partial transfer safeguard. It provides the Treasury with the power to protect security interests and set-off and netting arrangements. The purpose is to provide protection for private law interests. Secondary legislation made under this power will describe in detail the nature of the interests to be protected and the way in which they are to be protected. The recently published consultation document provides detail on the Governments proposals.
It may help if I describe the nature of the interests that the safeguard is designed to protect. In broad terms, a security interest is a specific protection, taken by obtaining a property interest in the debtors property, against which recourse can be had in defined circumstancesfor example, in cases of non-payment. At its most basic, netting is the process whereby multiple contracts are set off against one another. However, netting also involves more complicated arrangements, utilising the basic concept of set-off to manage transactional risk.
For example, close-out netting may allow all the contractual obligations of a party to be terminated on a trigger event and reduced to a single sum, either owed or owing to the counterparty in question. Such cover is often provided under industry standard master agreements, prepared by bodies such as the International Swaps and Derivatives Association. However, counterparties also use a range of bespoke arrangements. Those arrangements are crucial to the functioning of the financial markets, and are an integral part of the way in which counterparties do business with banks. It is therefore important that we get the safeguards right, and that we strike the right balance between the protection that the market needs and the flexibility that it is desirable to retain in order to effect appropriate partial transfers.
The power in clause 43 provides a broad definition of the interests to be protected, which reflects the extremely broad range of interests that exist in that field. The interests that the power needs to address include, for example, security interests granted under foreign legal systems and complicated types of set-off and netting arrangements used in particular types of specialist markets. Protection may be given to such interests in the ways set out in subsections (2) and (3). Again, flexibility is needed to reflect the complexity of the underlying arrangements, and the ways in which protection might be provided. The draft order proposed to be made under the clause is, as I have indicated, the subject of consultation.
The protection to be afforded will, in broad terms, ensure that the integrity of the interest is respected, to the extent provided for in the order. For example, when a series of contracts are subject to a netting arrangement protected by the order, the requirement could be to transfer all such contracts or to leave all such contracts behind, as to transfer some but not all would interfere with the operation of the netting arrangement.
In line with clause 42, the Government propose that the detail of the safeguard should be set out in secondary legislation. That is for two main reasons. First, implementation of the policy will require detailed consideration of complex and varied interests in a variety of market contexts, the detail of which is appropriately addressed in secondary legislation.
Secondly, it is desirable to retain flexibility in order to adjust and refine the safeguard in the light of experience. That is particularly important in this context, because security interests and set-off and netting arrangements have proved to be highly innovative. The latter, in particular, have developed and evolved significantly over a comparatively short period of time. Changes to the safeguard may be necessary to ensure that it continues to protect what it is intended to protect, but also to ensure that innovations do not undermine the policy aims that the special resolution regime is intended to serve.
Draft orders were published in the 6 November consultation document, following discussions with the expert liaison group. The precise nature of the safeguards is subject to consultation. However, at this stage the Government propose a set of broad protections. The Government propose to protect all contracts covered under set-off or netting agreements from potential disruption caused by a partial transferapart from a set of clearly defined exceptions. The protection extends to bespoke agreements, in addition to those made under industry-recognised master netting agreements. The Government consider that the safeguard provides the market with a strong and clearly defined protection, while leaving the authorities with sufficient flexibility to carry out appropriate partial transfers.
The balance between the discretion required to exercise the power and the certainty required by someone trading with a bank when trying to reach a long-term commitment is a delicate one.
I have been slightly puzzled by the application in this legislation of the word may to the protections to which the Minister has referred. It implies a discretion that allows the Government not to exercise the powers granted to it to protect the various interests to which he refers. Will he clarify the use of that term, because it puzzles me that there does not seem to be an obligation involved to protect the interests he has stated?
I am not sure to which may my hon. Friend is referring. The policy intention is to provide a strong safeguard that provides protection to bespoke agreements, to agreements made under industry-recognised master netting agreements and to provide, as part of that context, clearly defined protection. This is something that the industry has welcomed and has been asking questions about and we will be responding to the consultation exercise.
May I give examples of the use of may? Clause 43(3) says,
an order may apply to arrangements generally or only to arrangements...of a specified kind, or...made or applying in specified circumstances.
That is rather general, on the lines that those are our broad intents but we can do it another way. The difficulty with uncertainties may be dealt with by clearer guidance which is being discussed now. My concern is that what is on the statute book enshrines a degree of discretion that those lending to a bank or seeking to construct an instrument with a bank might have some anxiety over.
I understand the point that my hon. Friend is making. I want to be clear that we are intending to make progress and issue secondary legislation to provide the safeguards that are reflected in clauses 42, 43 and 55, as I have already outlined to the Committee. We think that with regard to partial transfer powers we should outline the principles in the code. My hon. Friend will see the draft legislation that is in the Special resolution regime: safeguards for partial property transfers consultation document. I confirm the Governments intention, following consultation, to proceed with it.
Following what the hon. Member for South Derbyshire has said, it is rather important to give certainty in this area as it is the most controversial. The Minister has assured us that it shall happen but I am afraid the Bill says that it may happen. Would it not be worth thinking about whether those mays should be turned into definites?
I will certainly think about it and talk to officials about the different mays and shalls. We may consider that changes need to be made to the Bill but, on the other hand, we may not; we may think that our original thinking was correct in this matter.
To conclude on security interests, the Government are proposing that all forms of security arrangement where a creditor takes an interest in the property of the debtor should be protected, including both fixed and floating charges, which was a point raised by the hon. Member for South-West Hertfordshire.
A number of hon. Members requested further information on lessons learned from Bradford & Bingley, as an example of a partial transfer. As I said before we adjourned for lunch, it is inappropriate to discuss the details of current resolutions, not least because of litigation issues. However, in order to help the Committee, let me provide some general reflections on this case and how recent resolutions have informed our thinking on partial transfers.
Using the powers in the Banking (Special Provisions) Act 2008, put in place in February, Bradford & Bingley plc was taken into temporary public ownership by way of a transfer of its securities. Then, as part of the same order, its deposit business and its branches were transferred by way of a property transfer to Abbey Santander, backed by a contribution from the Financial Services Compensation Scheme and the Treasury. The parts of the bank that were not transferred to Abbeyin broad terms, mortgages and other assetsremain in public ownership. That was a relatively simple example of a partial transfer. Under the transfer order, the FSCS paid out approximately £14 billion to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey, with the Treasury making a payment to Abbey for retail deposit amounts not covered by the FSCS, amounting to approximately £4 billion.
It may also help the hon. Member for Wellingborough to set out how a partial transfer might work, but I want to stress that this is just one example. The Bank of England could use the bridge bank stabilisation options to transfer a deposit book of a failing bank to a bridge bank. The residual companythat is the banking business not transferredwould enter the bank administration procedure, as provided for by part 3. The residual company would be wound up by a bank administrator, while providing necessary services to the bridge bank. The Bank of England would work to stabilise the bridge bank and sell on to a private sector purchaser as quickly as possible. That is an example of one way that the powers could be exercised in the future.
The hon. Member for South-West Hertfordshire also asked a number of questions about clause 42(3) and our treatment of it in the consultation document on partial transfer safeguards. First, to answer his question on the why subsection (3) refers to classes of deposits: the provision gives an example of the class of property to which restrictions could relate. Subsection (3) does not state that restrictions must necessarily relate to deposits. It is designed to give a flavour of the type of provision the underlying secondary legislation could make.
The hon. Gentleman also asked why the Government are consulting on making provisions for general restrictions in the code of practice rather than in legislation. As he noted, the Government agree that key safeguards to partial transfers should be put in secondary legislation. That is why we are consulting on putting in secondary legislation the safeguards to protect set-off and netting, to protect security interests and to aim to ensure that no creditor be worse off through a partial transfer. Feedback from stakeholders, as the hon. Gentleman noted earlier, is that those three safeguards, and in particular the protection of set-off and netting, are the most important, and we intend them to be covered through secondary legislation. However, as he is aware, we are consulting on providing additional guidance in the code of practice on what property, rights and liabilities could be transferred in a partial transfer and in what circumstances such partial transfers would occur.
As I have said, recent events in the financial markets have clearly demonstrated that preserving the flexibility of the authorities is crucial. Therefore, we do not believe that at this stage there should be, in addition to the safeguards that I have just mentioned, a general legislative restriction on the scope of partial transfers. However, the guidelines in the code of practice will give the market more clarity about the nature of the partial transfers that the authorities may effect. However, we are consulting on it and I look forward to receiving stakeholder views on it.
Another issue raised by the hon. Member for South-West Hertfordshire was about paragraph 2.16 of the consultation document. Paragraph 2.16 sets out the Governments broad policy intention towards set-off and netting arrangements, which is to protect contracts relevant for regulatory capital purposes from the threat of disruption. However, it would not be appropriate for the draft order to adopt a specific definition to that effect, in part due to the circularity point raised by the hon. Gentleman. Instead, the draft order specifies that set-off and netting arrangements will be protected subject to delineated exceptions, which is important so that counterparties can attain the necessary legal certainty. The Government will be working with stakeholders, including through the expert liaison group, to ascertain whether the provisions of the draft order address the policy objective of protective set-off and netting arrangements with rate contracts that are relevant for regulatory capital calculations.
I want to make it clear at this stage that the safeguard is likely to cover many more set-off and netting arrangements than simply those that relate to contracts relevant for regulatory capital. The broad safeguard proposed would cover most set-off and netting arrangements, subject to some exceptions, and that approach has been welcomed already.
The hon. Gentleman asked what protection is provided for security. I can confirm that the Government are consulting on the position that the security interest safeguard should be comprehensive and include all floating charges. He also asked why we should refer to the financial collateral directive, rather than to regulations, which are wider. It is correct that the draft order only refers to protecting interests under the financial collateral directive, rather than regulations, but we are specifically consulting on that point. I refer the hon. Gentleman to question 10 on page 18 of the consultation document. We are open to representations on that point.
I want to return to the question of whether we are rushing this too much. I of course agree that partial transfers are critical and that it is therefore essential to get them right. That is why we have published the consultation document and why we have set up the expert liaison group to consider the safeguards. The consultation document, as I have made clear, included draft orders on the safeguards that stakeholders have informed us are the most important. Annex A of the consultation document provides draft secondary legislation for the set-off and netting arrangements and security interest safeguards in addition to draft regulations for the No Creditor Worse Off safeguard. I would also like to point out that the adopted approach for the netting and safeguards follows a direct recommendation from the expert liaison group.
We are making good progress on the detail of those important safeguards, and we want to get them right. We currently believe that, with the good co-operation we have had so far with stakeholders, we will be able to get them right in a timely manner so that we can pass the secondary legislation at a similar time to the passing of the primary legislation we are discussion today.