Financial Services and Markets Act 2000

Bankruptcy U.K.

372 Petitions. U.K.

(1) The [F1 FCA] may present a petition to the court—

(a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or

(b) under section [F2 2 or 5 of the 2016] Act for the sequestration of the estate of an individual.

[F3 (1A) The PRA may present a petition to the court—

(a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual who is a PRA-regulated person;

(b) under section [F4 2 or 5 of the 2016] Act for the sequestration of the estate of an individual who is a PRA-regulated person.]

(2) But [F5 a petition may be presented by virtue of subsection (1) or (1A)] only on the ground that—

(a) the individual appears to be unable to pay a regulated activity debt; or

(b) the individual appears to have no reasonable prospect of being able to pay a regulated activity debt.

(3) An individual appears to be unable to pay a regulated activity debt if he is in default on an obligation to pay a sum due and payable under an agreement.

(4) An individual appears to have no reasonable prospect of being able to pay a regulated activity debt if—

(a) [F6 a regulator] has served on him a demand requiring him to establish to the satisfaction of [F7 that regulator] that there is a reasonable prospect that he will be able to pay a sum payable under an agreement when it falls due;

(b) at least three weeks have elapsed since the demand was served; and

(c) the demand has been neither complied with nor set aside in accordance with rules.

(5) A demand made under subsection (4)(a) is to be treated for the purposes of the 1986 Act (or the 1989 Order) as if it were a statutory demand under section 268 of that Act (or Article 242 of that Order).

(6) For the purposes of a petition presented in accordance with subsection (1)(b) [F8 or (1A)(b)]—

(a) [F9 the regulator by which the petition is presented] is to be treated as a qualified creditor; and

(b) a ground mentioned in subsection (2) constitutes apparent insolvency.

(7) “Individual” means an individual—

(a) who is, or has been, an authorised person; or

(b) who is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(8) “Agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the individual concerned.

(9) “Rules” means—

(a) in England and Wales, rules made under section 412 of the 1986 Act;

(b) in Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and

(c) in Northern Ireland, rules made under Article 359 of the 1989 Order.

Textual Amendments

F1 Word in s. 372(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F2 Words in s. 372(1)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(6)

F3 S. 372(1A) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F4 Words in s. 372(1A)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(6)

F5 Words in s. 372(2) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F6 Words in s. 372(4)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(5)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F7 Words in s. 372(4)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(5)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F8 Words in s. 372(6) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(6)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F9 Words in s. 372(6)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 20(6)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I1 S. 372 wholly in force at 1.12.2001; s. 372 not in force at Royal Assent see s. 431(2); s. 372 in force for certain purposes at 20.7.2001 by S.I. 2001/2632, art. 2(1), Sch. Pt. 1; s. 372 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

373 Insolvency practitioner’s duty to report [F10 to FCA and PRA]. U.K.

(1) If—

(a) a bankruptcy order or sequestration award is in force in relation to an individual F11 ..., and

(b) it appears to the insolvency practitioner that the individual is carrying on, or has [F12 carried on—

(i) a regulated activity in contravention of the general prohibition, or

(ii) a credit-related regulated activity in contravention of section 20,]

the insolvency practitioner must report the matter [F13 without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA].

[F14 (1A) Subsection (1) does not apply where—

(a) the bankruptcy order or sequestration award is in force by virtue of a petition presented by a regulator, and

(b) the regulator's petition depended on a contravention by the individual of the general prohibition.]

(2) “Bankruptcy order” means a bankruptcy order under Part IX of the 1986 Act (or Part IX of the 1989 Order).

(3) “Sequestration award” means an award of sequestration under section [F15 22 of the 2016] Act.

(4) “Individual” includes an entity mentioned in section 374(1)(c).

Textual Amendments

F10 Words in s. 373 heading substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 21(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F11 Words in s. 373(1)(a) omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 21(2)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F12 Words in s. 373(1)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 21(2)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F13 Words in s. 373(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 21(2)(c) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F14 S. 373(1A) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 21(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F15 Words in s. 373(3) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(7)

374 [F16 Powers of FCA or PRA] to participate in proceedings. U.K.

(1) This section applies if a person F17 ... presents a petition to the court—

(a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual;

(b) under section [F18 2 or 5 of the 2016] Act for the sequestration of the estate of an individual; or

(c) under section 6 of the [F19 2016] Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section.

(2) The [F20 appropriate regulator] is entitled to be heard—

(a) at the hearing of the petition; and

(b) at any other hearing in relation to the individual or entity under—

(i) Part IX of the 1986 Act;

(ii) Part IX of the 1989 Order; or

(iii) the [F21 2016] Act.

(3) [F22 In the case of a petition presented under Article 238 of the 1989 Order, a copy of the report prepared under Article 248 of that Order] must also be sent to the [F20 appropriate regulator].

(4) A person appointed for the purpose by the [F20 appropriate regulator] is entitled—

(a) to attend any meeting of creditors of the individual or entity;

(b) to attend any meeting of a committee established under section 301 of the 1986 Act (or Article 274 of the 1989 Order);

(c) to attend any meeting of commissioners held under paragraph [F23 26 or 27 of schedule 6 to the 2016] Act; and

(d) to make representations as to any matter for decision at such a meeting.

[F24 (4A) The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a creditors’ decision procedure by which a decision about any matter is sought from the creditors of the individual or entity.]

(5) “Individual” means an individual who—

(a) is, or has been, an authorised person; or

(b) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(6) “Entity” means an entity which—

(a) is, or has been, an authorised person; or

(b) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

[F25 [F26 (7) “The appropriate regulator” means—

(a) where the individual or entity is a PRA-regulated person, each of the FCA and the PRA, except that the references in subsections (4) and (4A) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;

(b) in any other case, the FCA.]

(8) But where the petition was presented by a regulator “the appropriate regulator” does not include the regulator which presented the petition.]

Textual Amendments

F16 Words in s. 374 heading substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 22(5) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F17 Words in s. 374(1) omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 22(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F18 Words in s. 374(1)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(8)(a)(i)

F19 Word in s. 374(1)(c) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(8)(a)(ii)

F20 Words in s. 374(2)-(4) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 22(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F21 Word in s. 374(2)(b)(iii) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(8)(b)

F22 Words in s. 374(3) substituted (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 1 para. 13

F23 Words in s. 374(4)(c) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(8)(c)

F24 S. 374(4A) inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 4(7)(a) (with reg. 17)

F25 S. 374(7) substituted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 4(7)(b) (with reg. 17)

F26 S. 374(7)(8) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 22(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.