(1) This regulation applies where any banknotes are issued by an insolvent bank -

(a) after it loses the right to rely on section 213 of the Act by virtue of section 220(5) or 223(5) of the Act; and

(b) without the permission of the Bank of England under regulation 27(1).

(2) The holders of any such banknotes may participate in a note exchange programme despite the matters referred to in paragraph (1)(a) and (b).