BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES (Ch D) IN THE MATTER OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ORDER

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Merilyn Jackson
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CLAIM NO: FS-2017-000004 15 Dec 2017 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES (Ch D) FS-2017-000004 FINANCIAL SERVICES AND REGULATORY Mr Justice Hildyard 4 IN

1 CLAIM NO: FS Dec 2017 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES (Ch D) FS FINANCIAL SERVICES AND REGULATORY Mr Justice Hildyard 4 IN THE MATTER OF LLOYDS BANK PLC IN THE MATTER OF BANK OF SCOTLAND PLC IN THE MATTER OF LLOYDS BANK CORPORATE MARKETS PLC AND IN THE MATTER OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ORDER UPON THE APPLICATION, by the Part 8 Claim Form issued on 24 November 2017, of the abovenamed Lloyds Bank plc (registered number ), the Bank of Scotland plc (registered number SC327000) (together the Transferors and each a Transferor ) and Lloyds Bank Corporate Markets plc (registered number ) (the Transferee ), all of which form part of the Lloyds Banking Group for sanction of a ring-fencing transfer scheme ( the Scheme ) under Part VII of the Financial Services and Markets Act 2000 AND UPON the Transferors having previously applied for provisional directions to assist them in the preparation of the Scheme, in particular the Transferors proposed plan for notifying customers and other stakeholders of the Scheme (Claim No CR ) AND UPON the Court having given provisional directions by order dated 26 May 2017 (the May Order ) requiring the Transferors to give individual notice of the Scheme to any and all customers and other stakeholders who might wish to allege that they would be adversely affected by the carrying out of the Scheme 1

2 AND UPON the Court having given further provisional directions by order dated 25 September 2017 (the September Order ) in relation to the giving by the Transferors of notice of the Scheme to various groups of customers AND UPON the Transferors having agreed that any person alleging that he would be adversely affected by the Scheme and wishing to be heard at the hearing at which the Applicants will ask the Court to sanction the Scheme (currently listed to take place on 27 and 28 March 2018) who files a written statement of representations with the Court in accordance with s 110(5)(a) FSMA need not serve such statement on the Transferors AND UPON hearing Martin Moore QC, Counsel for the Applicants, and Robert Purves, Counsel for the Prudential Regulation Authority ( PRA ) and the Financial Conduct Authority ( FCA ) AND UPON reading the Claim Form and the witness statement of Mark George Culmer dated 24 November 2017 ( the Witness Statement ) IT IS ORDERED THAT: (1) The elements of the Transferors Communications Plan outlined at paragraphs 443 to 488 and more particularly described at 489 to 520 and 522 to 567 of the Witness Statement together with those elements in respect of which the Court gave directions in the September Order and both described in the document entitled Communications Plan Schedule at Schedule 1 to this Order (in each case together with the completion of blanks, the correction of typographical errors and any other changes which Counsel shall advise to be immaterial) constitute sufficient notice of the Scheme to customers and other stakeholders of the Lloyds Banking Group listed in column one of the Communications Plan Schedule for the purposes of paragraphs 2(a) and 3(a) (as applicable) of the May Order and the Transferors shall not be required to give any further notice to customers, consumers or other stakeholders of the Lloyds Banking Group. (2) The guidance note substantially in the form included at Schedule 2 to this Order be made available on the Lloyds Banking Group microsite (as described in paragraph 564 of the Witness Statement) and a leaflet (referred to in paragraph 565 of the Witness Statement) for persons alleging that they would be adversely affected by the carrying out of the Scheme and who wish to make a written statement of representations under section 110(5) of the Financial Services and Markets Act (3) The further hearing of the Claim Form be adjourned until the case management conference to be heard on 9 March (4) In Appendix 1 to the September Order in the section headed Definitions the definition of the term Representation Date be corrected pursuant to the slip rule (CPR rule 40.12) by the deletion of the words at least 42 calendar days prior to. (5) Liberty to apply on appropriate notice to the PRA and FCA. 2

3 SCHEDULE 1 COMMUNICATIONS PLAN SCHEDULE Stakeholder Individual notification channels Timing of individual notification Public or general CATEGORY 1 CUSTOMERS (product transferring, or no product transferring but agreement being duplicated or product curtailed) Existing customers at cut-off date (anticipated to be 1 Dec 2017) New customers- i.e. customers who have not done business with the Transferors before the cut-off date and existing customers in respect of business entered into after that date, where the business is in scope for transfer to the Transferee o Initial (Stage 1 and Stage 2) o Letter and guide for Category 1 Customers Same relevant information as existing Category 1 Customers (other than initial ) Stage 1- end of Jan 2017 to end of July 2017 Stage 2- July 2017 to early Before or at the time of or as soon as possible after the new business is entered into Relevant elements of the following: o *Branch leaflets o *Branch notices o *Brand websites o Group microsite o *ATM receipts o *Gazettes- formal notice o *Newspapers - formal notice o Newspaper advertising campaign (together Public ) CATEGORY 2 CUSTOMERS (in the Retail (including Consumer Finance sub-division) or Commercial Banking divisions, with whom the Transferors have a contractual relationship or engage on a regular basis, but who are not Category 1 Customers) CATEGORY 2 CUSTOMERS - Retail (excluding Consumer Finance) *Retail (excluding Birmingham Midshires customers) o First round business as usual mailings July 2017 to Sept 2017 o Second round business as usual mailings and online account delivery Sept 2017 to Jan 2018 o Or no individual notice Birmingham Midshires Standalone letter October

4 Stakeholder Individual notification channels Timing of individual notification Public or general CATEGORY 2 CUSTOMERS Consumer Finance *Savings, loans and mortgage customers of the Bank of Online secure messaging or letter for non-online customers in o Websites Scotland plc s branches in Germany and the Netherlands German or Dutch edition of the FT *Consumer credit card customers Business as usual letter November 2017 International Mortgage Services Standalone letter November o Websites edition of the FT Commercial credit card customers Letter and guide for Category 2 Commercial Banking Customers Commercial charge card customers Letter and guide for Category 2 Commercial Banking Customers Personal loan customers Standalone letter Charge card end customers of reseller banks Letter and guide for Category 2 Commercial Banking customers, simplified to reflect product CATEGORY 2 CUSTOMERS - Commercial Banking All customers in this category except customers whose Letter (one for RFIs and one for non-rfis) and a guide only product is invoice finance facilities Invoice finance facility customers Standalone *CATEGORY 3 CUSTOMERS Customers of the Group s insurance business Entities which are subsidiaries of a Transferor and which will be transferred to form the equity sub-group Customers of non-uk entities which are part of the Group where the entity will be transferred to form part of the non-ring fenced sub-group o Websites edition of FT Customers of MBNA Ltd No individual notice Customers of Lex Autolease Ltd Customers of Black Horse Ltd Customers of Cardnet Merchant Services Ltd Customers with products booked to non-uk branches of the Transferors which are subject to a foreign governing law and which will be transferred to the Transferee, but not by means of the Scheme *NEW CATEGORY 2 AND CATEGORY 3 CUSTOMERS Customers who become customers of the Lloyds Banking Group after 25 September 2017 who, if they were a customer of the Lloyds Banking Group on that date, No individual notice 4 o Websites edition of FT

5 Stakeholder Individual notification channels Timing of individual notification Public or general would have been classified as Category 2 or Category 3 Customers Stakeholder Individual notification channels Timing of individual notification Public or general OTHER RELEVANT PERSONS OTHER RELEVANT PERSONS: persons connected with customers Granted security or a guarantee to a Transferor re transferring business Where the Transferors have the contact details of the security provider or guarantor etc., a letter and guide. Where the Transferors do not have contact details, no individual notice, but request for Category 1 customers in sent to them to inform security provider etc. of the Scheme. Agents in bilateral or syndicated structures Letter and guide Third party syndicate members in syndicated structures No individual notice. Agent expected to contact the syndicate members. Holders of securitisation notes No individual notice. Issuer or trustee expected to arrange for noteholders to be informed, as requested by Transferors. Third party beneficiaries or pledgees of a Trade Instrument No individual notice, but request to Category 1 Customers in sent to them to contact any such beneficiaries to inform them of the Scheme. Governmental entities with notification rights Where the Transferors have contact details, a letter and guide. Insurers - who have provided insurance to customers of the Transferors in relation to security which will be affected by the Scheme No individual notice, but request to Category 1 Customers in sent to them to contact such insurers to inform them of the Scheme. OTHER CATEGORIES OF OTHER RELEVANT PERSONS All employees No individual notice to employees in general. Intranet communication Category A and Category B employees Category A and Category B employees - , or town hall meeting or briefing by line manager re changing role. (By 9 February 2018 for about 10 employees who will be identified as Category A employees after 5

6 Stakeholder Individual notification channels Timing of individual notification Public or general ) Fixed income investors and shareholders in the Parent No individual notice 25 October Quarter 3 Interim Management Statement Legal entities each legal entity in the ring-fenced subgroup and non-ring fenced sub-group Pension scheme trustees Letter Individual notice to trustees of pension schemes in the UK, Crown Dependencies and Ireland by discussions and letter. * denotes that specific directions were obtained in relation to this group of customers or type of communication at the hearing on 25 September 2017 This Schedule should be read in conjunction with the witness statement of Mark George Culmer dated 24 November 2017 and his earlier witness statement dated 19 September 2017 in CR

7 SCHEDULE 2 GUIDANCE NOTE The following guidance for the making of a written statement of representation which a person wishes the Court to consider in relation to the ring-fencing transfer scheme proposed by Lloyds Banking Group under s.110(3)-(5) of the Financial Services and Markets Act 2000 (a Statement ) has been approved by Mr Justice Hildyard on 4. The Statement To help the Court to understand the point(s) you wish to make, we suggest that the Statement should be short and should at least contain the following: Your name and your relationship(s) with Lloyds Banking Group (i.e. customer with an account (e.g. savings, current), credit or charge card holder, borrower or other). It is not necessary to disclose your account details or other balances. The nature of the adverse effect which you allege you will suffer as a result of the ring-fencing transfer scheme proposed by Lloyds Banking Group. The reason you say that you will suffer the adverse effect. In addition, if you disagree with any aspect of the report at on the terms of the ring-fencing transfer scheme that has been produced by the Skilled Person appointed to carry out this role, it would be very helpful if you identify those aspects and explain why you disagree. The decision that the Court must make is whether it is appropriate in all the circumstances to allow the ring-fencing transfer scheme to be carried out. Filing The Financial Services and Markets Act 2000 requires that your Statement must be filed with the Court. This may be done in one of three ways, as follows: Service In person by lodging at the Court Office over the counter at the Business and Property Courts of England and Wales, 7 Rolls Building, Fetter Lane, London EC4A 1NL. Please mark it FAO Lloyds Banking Group Ring-Fencing Transfer Scheme. By post by sending it to Business and Property Courts of England and Wales, 7 Rolls Building, Fetter Lane, London EC4A 1NL. Please mark it FAO Lloyds Banking Group Ring- Fencing Transfer Scheme. Electronically by using the Court CE Filing system. Guidance on the use of this facility is available at A copy of any Statement filed with the Court must be provided to the Prudential Regulation Authority. Guidance on how this can be done (e.g. in person, by post or electronically) is available at Lloyds Banking Group has agreed with the Court that a copy of any Statement filed with the Court does not need to be provided to it. 7

Summary Report of the Skilled Person on the Proposed Ring-fence Transfer Scheme of Lloyds Banking Group. Prepared by Michael John Lloyd FCA, FCT

Summary Report of the Skilled Person on the Proposed Ring-fence Transfer Scheme of Lloyds Banking Group Prepared by Michael John Lloyd FCA, FCT 24 November 2017 Michael John Lloyd FCA, FCT 01/60 Table