The aim of the act was to provide HBOS plc, a banking and insurance group in the UK, the legal authority to reorganise its subsidiaries into a simplified structure.

HBOS plc is a banking and insurance holding company and was created on 10 September 2001 from the merger of the Governor and Company of the Bank of Scotland and Halifax plc.

By doing it could save the costs of maintaining four banking licences, and the need for four separate companies, each with their own board of directors.

The transfer of assets and liabilities from one bank to another also requires the consent of the account holders.

For institutions such as the Halifax, this would involve seeking the consent of millions of people, and would be impractical.