Part XXIV Insolvency

Administration orders

F1359 Administration order

(1)

The F2FCA may make an administration application under Schedule B1 to the 1986 Act F3or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which—

(a)

is or has been an authorised person F4or recognised investment exchange,

(b)

is or has been an appointed representative, or

(c)

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

F5(1A)

The PRA may make an administration application under Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which is a PRA-regulated person.

(2)

Subsection (3) applies in relation to an administration application made (or a petition presented) by F6a regulator by virtue of this section.

(3)

Any of the following shall be treated for the purpose of paragraph 11(a) of Schedule B1 to the 1986 Act F7or paragraph 12(a) of Schedule B1 to the 1989 Order as unable to pay its debts—

(a)

a company or partnership in default on an obligation to pay a sum due and payable under an agreement, F8. . .

(b)

an authorised deposit taker in default on an obligation to pay a sum due and payable in respect of a relevant deposit.F9, and—

(c)

an authorised reclaim fund in default on an obligation to pay a sum payable as a result of a claim made by virtue of section 1(2)(b) or 2(2)(b) of the Dormant Bank and Building Society Accounts Act 2008.

(4)

In this section—

“agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the company or partnership,

“authorised deposit taker” means a person with a F10Part 4A permission to accept deposits (but not a person who has a F10Part 4A permission to accept deposits only for the purpose of carrying on another regulated activity in accordance with that permission),

F11“authorised reclaim fund” means a reclaim fund within the meaning given by section 5(1) of the Dormant Bank and Building Society Accounts Act 2008 that is authorised for the purposes of this Act;

“company” means a company—

(a)

in respect of which an administrator may be appointed under Schedule B1 to the 1986 Act, or

(b)

F12in respect of which an administrator may be appointed under Schedule B1 to the 1989 Order,

“relevant deposit” shall, ignoring any restriction on the meaning of deposit arising from the identity of the person making the deposit, be construed in accordance with—

(a)

section 22,

(b)

any relevant order under that section, and

(c)

Schedule 2.

(5)

The definition of “authorised deposit taker” in subsection (4) shall be construed in accordance with—

(a)

section 22,

(b)

any relevant order under that section, and

(c)

Schedule 2.

360 Insurers.

(1)

The Treasury may by order provide that such provisions of Part II of the 1986 Act (or Part III of the 1989 Order) as may be specified are to apply in relation to insurers with such modifications as may be specified.

(2)

An order under this section—

(a)

may provide that such provisions of this Part as may be specified are to apply in relation to the administration of insurers in accordance with the order with such modifications as may be specified; and

(b)

requires the consent of the Secretary of State.

(3)

“Specified” means specified in the order.

F14361Administrator’s duty to report to F13FCA and PRA

(1)

This section applies where a company or partnership is—

(a)

in administration within the meaning of Schedule B1 to the 1986 Act, or

F15(b)

in administration within the meaning of Schedule B1 to the 1989 Order.

F16(2)

If the administrator thinks that the company or partnership is carrying on, or has carried on—

(a)

a regulated activity in contravention of the general prohibition, or

(b)

a credit-related regulated activity in contravention of section 20,

the administrator must report the matter to the appropriate regulator without delay.

F17(2A)

"The appropriate regulator” means—

(a)

where the regulated activity is a PRA-regulated activity, the FCA and the PRA;

(b)

in any other case, the FCA.

F18(3)

Subsection (2) does not apply where—

(a)

the administration arises out of an administration order made on an application made or petition presented by a regulator, and

(b)

the regulator's application or petition depended on a contravention by the company or partnership of the general prohibition.

362F19Powers of FCA and PRA to participate in proceedings.

(1)

This section applies if a person F20... F21makes an administration application under Schedule B1 to the 1986 Act F22or Schedule B1 to the 1989 Order in relation to a company or partnership which—

(a)

is, or has been, an authorised person F23or recognised investment exchange;

(b)

is, or has been, an appointed representative; or

(c)

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

F24(1A)

This section also applies in relation to—

(a)

the appointment under paragraph 14 or 22 of Schedule B1 to the 1986 Act F25or paragraph 15 or 23 of Schedule B1 to the 1989 Order of an administrator of a company of a kind described in subsection (1)(a) to (c), or

(b)

the filing with the court of a copy of notice of intention to appoint an administrator under F26any of those paragraphs.

F27(1B)

This section also applies in relation to—

(a)

the appointment under paragraph 22 of Schedule B1 to the 1986 Act (as applied by order under section 420 of the 1986 Act), or under paragraph 23 of Schedule B1 to the 1989 Order (as applied by order under Article 364 of the 1989 Order), of an administrator of a partnership of a kind described in subsection (1)(a) to (c), or

(b)

the filing with the court of a copy of notice of intention to appoint an administrator under either of those paragraphs (as so applied).

(2)

The F28appropriate regulator is entitled to be heard—

(a)

at the hearing of the F29administration application F30or the petition; and

(b)

at any other hearing of the court in relation to the company or partnership under Part II of the 1986 Act (or Part III of the 1989 Order).

(3)

Any notice or other document required to be sent to a creditor of the company or partnership must also be sent to the F28appropriate regulator.

F31(4)

The F28appropriate regulator may apply to the court under paragraph 74 of Schedule B1 to the 1986 Act F32or paragraph 75 of Schedule B1 to the 1989 Order.

(4A)

In respect of an application under subsection (4)—

(a)

paragraph 74(1)(a) and (b) shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words “harm the interests of some or all members or creditors”, and

F33(b)

paragraph 75(1)(a) and (b) of Schedule B1 to the 1989 Order shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words harm the interests of some or all members or creditors.

(5)

A person appointed for the purpose by the F28appropriate regulator is entitled—

(a)

to attend any meeting of creditors of the company or partnership summoned under any enactment;

(b)

to attend any meeting of a committee established under F34paragraph 57 of Schedule B1 to the 1986 Act (or F35paragraph 58 of Schedule B1 to the 1989 Order; and

(c)

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

F36(5A)

The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a qualifying decision procedure by which a decision about any matter is sought from the creditors of the company or partnership.

(6)

If, during the course of the administration of a company, a compromise or arrangement is proposed between the company and its creditors, or any class of them, the F28appropriate regulator may apply to the court under F37section 896 or 899 of the Companies Act 2006.

F38F39(7)

“The appropriate regulator” means—

(a)

where the company or partnership is a PRA-regulated person, each of the FCA and the PRA, except that the references in subsections (5) and (5A) 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 administration application was made by a regulator “the appropriate regulator” does not include that regulator.

F40362A Administrator appointed by company or directors

(1)

This section applies in relation to a company F41or partnership of a kind described in section 362(1)(a) to (c).

F42(2)

An administrator of the company or partnership may not be appointed under a provision specified in subsection (2A) without the consent of the appropriate regulator.

(2A)

Those provisions are—

(a)

paragraph 22 of Schedule B1 to the 1986 Act (including that paragraph as applied in relation to partnerships by order under section 420 of that Act);

(b)

paragraph 23 of Schedule B1 to the 1989 Order (including that paragraph as applied in relation to partnerships by order under article 364 of that Order).

(2B)

“The appropriate regulator” means—

(a)

where the company or partnership is a PRA-regulated person, the PRA, and

(b)

in any other case, the FCA.

(3)

Consent under subsection (2)—

(a)

must be in writing, and

(b)

must be filed with the court along with the notice of intention to appoint under paragraph 27 of F43Schedule B1 to the 1986 Act or paragraph 28 of Schedule B1 to the 1989 Order.

(4)

In a case where no notice of intention to appoint is required—

(a)

subsection (3)(b) shall not apply, but

(b)

consent under subsection (2) must accompany the notice of appointment filed under paragraph 29 of F44Schedule B1 to the 1986 Act or paragraph 30 of Schedule B1 to the 1989 Order.