The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes provision to apply to co-operative societies and community benefit societies the provisions in the Corporate Insolvency and Governance Act 2020 (c. 12) (“the 2020 Act”) relating to moratoriums (“the moratorium provisions”) and arrangements and reconstructions for companies in financial difficulty (“the Part 26A provisions”).

For those purposes articles 6 to 13 amend the Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229) (“the 2014 Order”).

Article 6 inserts a definition of “relevant CCBS” into the 2014 Order for the purpose of defining the categories of co-operative societies and community benefit societies to which the moratorium provisions do not apply.

Articles 7 and 8 amend the 2014 Order to apply the moratorium provisions, including the temporary provisions, to relevant CCBS and the Part 26A provisions to relevant societies with the modifications set out in—

(a) Schedule 1 to the 2014 Order, amended by article 11;

(b) Schedule 2A to the 2014 Order, inserted by article 12; and

(c) Part 4 of Schedule 4 to the 2014 Order, inserted by article 13.

Article 9 amends the 2014 Order to enable the Financial Conduct Authority and the Prudential Regulation Authority to participate in proceedings where the Part 26A provisions apply to a relevant society which meets the criteria in section 355A(1) of the Financial Services and Markets Act 2000 (c. 8).

Article 10 amends the 2014 Order to apply the temporary provision relating to moratoriums set out in the 2020 Act where a proposal for a moratorium is made to a relevant CCBS and its creditors and the courts have jurisdiction to wind up the society.

Article 11 provides the modifications to the moratorium provisions in their application to relevant CCBS to ensure those provisions operate correctly in relation to relevant CCBS.

Article 12 provides the modifications to the Part 26A provisions in their application to relevant societies to ensure those provisions operate correctly in relation to relevant societies.

Article 13 provides the modifications to the temporary moratorium provisions of the 2020 Act in their application to relevant CCBS to ensure those provisions operate correctly in relation to relevant CCBS.

Articles 14 to 17 make amendments consequential to the 2020 Act to the—

(a) Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I 1999/2979);

(b) Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226);

(c) Insurers (Reorganisation and Winding Up) (Lloyds) Regulations 2005 (S.I. 2005/1998); and

(d) Regulated Covered Bonds Regulations 2008 (S.I. 2008/346).

A full impact assessment has not been produced for this instrument as no impact, or no significant impact on the private, public or voluntary sectors is foreseen.