The Risk Transformation Regulations 2017

Effect of fast track transfer

176.—(1) A transfer scheme falling within regulation 174 takes effect on its registration by the FCA in accordance with paragraph (4)(a) of that regulation.

(2) Where the transfer scheme falls within Case 1, the following occur as a result of registration—

(a) the cell ceases to be a part of the transferor (and in relation to the transferor is deemed to be dissolved);

(b) the cell becomes a part of the transferee (and in relation to the transferee is deemed to be created);

(c) all of the assets held by the transferor on behalf of the cell are vested in the transferee and are deemed to be held by the transferee on behalf of the cell;

(d) all of the liabilities or obligations incurred by the transferor on behalf of the cell become liabilities or obligations of the transferee and are deemed to be liabilities or obligations incurred by the transferee on behalf of the cell;

(e) all of the liabilities or obligations of the transferor which are attributable to the cell become liabilities or obligations of the transferee and are deemed to be liabilities or obligations attributable to the cell;

(f) where the transferor has, on behalf of the cell, entered into a contract with the transferee then, to the extent that the transferor was acting on behalf of the cell, regulation 74 applies to the contract after the transfer with the following modifications—

(i) the contract is to be treated as if it were made between the cell and the part of the transferee on whose behalf the transferee was acting when it entered into the contract; and

(ii) for the purposes of determining whether the requirements of regulation 69 or, where applicable, regulation 70 are satisfied in relation to the contract, the contract is to be treated as if it were made on the registration of the transfer scheme by the FCA;

(g) where the transferor has, on behalf of the cell, entered into a contract with a person who is not the transferee then, to the extent that the transferor was acting on behalf of the cell, the contract is deemed to be novated to the transferee so that references to the transferor in the contract are (unless the context otherwise requires) read after the transfer as references to the transferee;

(h) where the cell has entered into enforceable arrangements with another cell of the transferor, then—

(i) where both cells are being transferred to the transferee at the same time, the enforceable arrangements take effect after the transfer as enforceable arrangements made between those cells by the transferee in accordance with these Regulations;

(ii) in all other cases, the arrangements take effect after the transfer as if the terms of the arrangements are set out in a contract made between—

(aa) the protected cell company on behalf of the other cell; and

(bb) the transferee on behalf of the cell being transferred;

(i) all of the investments issued by the transferor on behalf of the cell are deemed to be investments issued by the transferee on behalf of the cell;

(j) where the investments concerned are shares, they are deemed to have been issued and allotted by the transferee in accordance with the requirements of this Part;

(k) things done by the transferor on behalf of the cell are deemed to have been done by the transferee on behalf of the cell; and

(l) things done to the transferor in respect of the cell are deemed to have been done to the transferee in respect of the cell.

(3) Where the transfer scheme falls within Case 2, then the following occur as a result of registration—

(a) all of the assets held by the transferor on behalf of the cell are vested in the transferee;

(b) all of the liabilities or obligations incurred by the transferor on behalf of the cell become liabilities or obligations of the transferee;

(c) all of the liabilities or obligations of the transferor which are attributable to the cell become liabilities or obligations of the transferee;

(d) where the transferor has entered into a contract with the transferee on behalf of the cell then, to the extent that the transferor was acting on behalf of the cell, the terms of the contract cease to have effect after the transfer;

(e) where the transferor has, on behalf of the cell, entered into a contract with a person who is not the transferee then, to the extent that the transferor was acting on behalf of the cell, the contract is deemed to be novated to the transferee so that references to the transferor in the contract are (unless the context otherwise requires) read after the transfer as references to the transferee;

(f) where the cell has entered into enforceable arrangements with another cell of the transferor, those arrangements take effect after the transfer as if the terms of the arrangements are set out in a contract made between the protected cell company on behalf of the other cell and the transferee;

(g) all of the investments issued by the transferor on behalf of the cell are deemed to be investments issued by the transferee;

(h) things done by the transferor on behalf of the cell are deemed to have been done by the transferee;

(i) things done to the transferor in respect of the cell are deemed to have been done to the transferee; and

(j) the cell is deemed to be dissolved.

(4) Where the investments referred to in paragraph (3)(g) are shares, then Chapter 3 (allotment of equity securities: existing shareholders’ right of pre-emption) and Chapter 5 (payment for shares) of Part 17 (a company’s share capital) of the Companies Act 2006 do not apply to the transferee in relation to the transfer of the shares.

(5) Where property or a liability transferred in accordance with this regulation is governed by the law of any country or territory outside the United Kingdom, then the transferor must, if the transferee so requires, take all necessary steps for securing that the transfer is fully effective under the law of that country or territory.

(6) Registration of a transfer scheme in accordance with regulation 174 is to be treated as an instrument of transfer for the purposes of any enactment requiring the delivery of an instrument of transfer for the registration of property.