The Investment Bank Special Administration (England and Wales) Rules 2011

CHAPTER 1 Notice of appointment and statement of affairs

Notification and advertisement of administrator’s appointment

51.—(1) The notice of appointment to be given by the administrator as soon as reasonably practicable after appointment under paragraph 46(2)(b)—

(a) shall be gazetted; and

(b) may be advertised in such other manner as the administrator thinks fit.

(2) In addition to the standard contents, the notice must state that an administrator has been appointed and the date of the appointment.

(3) The administrator shall as soon as practicable after appointment give notice of the appointment to—

(a) any enforcement officer who, to the administrator’s knowledge, is charged with execution or other legal process against the investment bank;

(b) any person who, to the administrator’s knowledge, has distrained against the investment bank; and

(c) any supervisor of a voluntary arrangement under Part 1 of the 1986 Act.

(4) The administrator shall send the notice of appointment to the registrar of companies within 7 days of the date of the order appointing them.

(5) Any notice required to be sent by the administrator under these Rules or under Schedule B1 must contain—

(a) details of the court where the proceedings are and the relevant court reference number;

(b) the full name, registered address and registered number of the investment bank; and

(c) the name and business address of the person or persons appointed as administrator and the date of their appointment.

Notice requiring statement of affairs

52.—(1) In this Part, “relevant person” has the meaning given to it in paragraph 47(3).

(2) The administrator shall send notice to each relevant person who the administrator deems appropriate requiring that person to prepare and submit a statement of the investment bank’s affairs.

(3) The notice shall inform each of the relevant persons—

(a) that the proceedings are being held in the High Court and the court reference number;

(b) of the full name, registered address and registered number of the investment bank;

(c) of the name and the business address of the administrator;

(d) of the name and addresses of all others (if any) to whom the same notice has been sent;

(e) that the statement must be delivered to the administrator within 11 days of receipt of the notice;

(f) of the effect of paragraph 48(4) (penalty for non-compliance); and

(g) of the application to that person, and to each other relevant person, of section 235 of the 1986 Act(1) (duty to provide information and to attend on the administrator if required).

(4) The administrator shall, on request, provide details to the relevant person as to how the statement should be prepared.

Details of the client assets held by the investment bank

53.—(1) The statement of affairs shall include particulars of the client assets held by the investment bank..

(2) The particulars shall include—

(a) the names and addresses of clients of the investment bank for whom the investment bank holds client assets, but where these clients are individuals, the administrator shall not disclose their names and addresses;

(b) details as to the amount of client assets held, categorised into type and securities of a particular description;

(c) details as to the types of ownership those clients assert over the client assets; and

(d) details as to any security interest held by the investment bank or another person in respect of the client assets.

Verification and filing

54.—(1) In addition to the information required under rule 53, the statement of affairs shall be in Form 2.14B, contain all the particulars required by that form and be verified by a statement of truth by the relevant person.

(2) The administrator may require any relevant person to submit a statement of concurrence in Form 2.15B stating their concurrence in the statement of affairs and where the administrator does so, the relevant person making the statement of affairs shall be informed of that fact.

(3) The statement of affairs shall be delivered by a relevant person making the statement of truth, together with a copy, to the administrator, and the relevant person shall also deliver a copy of the statement of affairs to all those persons whom the administrator has required to make a statement of concurrence.

(4) A person required to submit a statement of concurrence shall do so before the end of the period of 5 business days (or such other period as the administrator may agree) beginning on the day on which the statement of affairs being concurred with is received by that person.

(5) A statement of concurrence may be qualified in respect of matters dealt with by the statement of affairs, where the maker of the statement of concurrence is not in agreement with the relevant person, or where they consider the statement of affairs to be erroneous or misleading, or where they are without the direct knowledge necessary for concurring with it.

(6) Every statement of concurrence shall be verified by a statement of truth and be delivered to the administrator by the person who makes it, together with a copy of it.

(7) Subject to rule 55, the administrator shall as soon as reasonably practicable send a copy of the statement of affairs and any statement of concurrence to the registrar of companies and file them with the court.

(8) In this rule, a reference to a specific form shall be to that form as prescribed in the Insolvency Rules 1986(2), with any modification that the person using the form thinks desirable to reflect the nature of special administration.

Limited disclosure

55.—(1) Where the administrator thinks that it would prejudice the conduct of the administration (or might reasonably be expected to lead to violence against any person) for the whole or part of the statement of the investment bank’s affairs to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of the statement.

(2) The court may, on such application, order that the statement or, as the case may be, the specified part of it, shall not be filed with the registrar of companies.

(3) The administrator shall, as soon as reasonably practicable, send a copy of the order and the statement of affairs (to the extent provided by the order) and any statement of concurrence to the registrar of companies.

(4) If a creditor or a client seeks disclosure of a statement of affairs or a specified part of it in relation to which an order has been made under this rule, that person may apply to the court for an order that the administrator disclose it or a specified part of it.

(5) An application under paragraph (4) shall be supported by written evidence in the form of a witness statement.

(6) Where a special administration (bank administration) order has been made, and where an application has been made under paragraph (4), the Bank of England and the FSA may appear and be heard at the hearing or may make written representations.

(7) The applicant shall give the administrator notice of the application at least 3 business days before the hearing.

(8) The court may make any order for disclosure subject to any conditions as to confidentiality, duration, the scope of the order in the event of any change of circumstances, or other matters as it sees just.

(9) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator shall, as soon as reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

(10) The administrator shall, as soon as reasonably practicable after the making of an order under paragraph (9), file a copy of the statement of affairs to the extent provided by the order with the registrar of companies.

(11) When the statement of affairs is filed in accordance with paragraph (10), the administrator shall, where they have sent a statement of proposals under paragraph 49, or, in a special administration (bank administration), paragraph 9 of Schedule 2 to the Regulations, provide the creditors and clients with a copy of the statement of affairs as filed, or a summary thereof.

(12) The provisions of CPR Part 31 shall not apply to an application under this rule.

Release from duty to submit statement of affairs

56.—(1) The power of the administrator under paragraph 48(2) to give a release from the obligation imposed by paragraph 47(1) or to grant an extension of time may be exercised at the administrator’s own discretion, or at the request of any relevant person.

(2) A relevant person may, if they request a release of extension of time and it is refused by the administrator, apply to the court for it and when such an application is made, the period referred to in paragraph 48(1) is suspended pending the court’s decision.

(3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it without a hearing but it shall not do so without giving the relevant person at least 5 business days’ notice, upon receipt of which the relevant person may request the court to list the application for a without notice hearing.

(4) If the application is not dismissed under paragraph (3), the court shall fix a venue for it to be heard, and give notice to the relevant person and to the FSA accordingly.

(5) Where an application has been made under paragraph (2), the FSA may appear and be heard at the hearing and in a special administration (bank administration), the Bank of England may also be given notice of the hearing and may appear and be heard at the hearing or may make written representations.

(6) The relevant person shall, at least 14 days before the hearing, send to the administrator a notice stating the venue and accompanied by a copy of the application and of any evidence which the relevant person intends to adduce in support of it.

(7) The administrator may appear and be heard on the application and, whether or not they appear, the administrator may file a written report of any matters which they consider ought to be drawn to the court’s attention.

(8) If a report is filed under paragraph (7), a copy of it shall be sent by the administrator to the relevant person not later than 5 business days before the hearing.

(9) Sealed copies of any order made on the application shall be sent by the court to the relevant person and the administrator.

(10) On any application under this rule, the relevant person’s costs shall be paid in any event by that person and, unless the court otherwise orders, no allowance towards them shall be made as an expense of the special administration.

Expenses of statement of affairs

57.—(1) A relevant person making the statement of the investment bank’s affairs or a statement of concurrence shall be allowed, and paid by the administrator as an expense of the special administration, any expenses incurred by the relevant person in so doing which the administrator considers reasonable.

(2) Any decision by the administrator under this rule is subject to appeal to the court.

(3) Nothing in this rule relieves a relevant person from any obligation with respect to the preparation, verification and submission of the statement of affairs or to the provision of information to the administrator.

Submission of accounts

58.—(1) Any of the persons specified in section 235(3) of the 1986 Act shall, at the request of the administrator, provide the administrator with the investment bank’s accounts as at such date and for such period as the administrator may specify.

(2) The period specified may begin from a date up to 3 years preceding the date the investment bank entered special administration, or from an earlier date to which the audited accounts of the investment bank were last prepared.

(3) The court may, on the administrator’s application, require accounts for an earlier period.

(4) Rule 57 applies (with the necessary modification) in relation to the accounts to be provided under this rule as it applies to the statement of affairs.

(5) The accounts shall (if the administrator so requires) be verified by a statement of truth and (whether or not so verified) be delivered within 21 days of the request under paragraph (1) (or such longer period as the administrator may allow).

(1)

Section 235 was amended by the Enterprise Act 2002 (c. 40) section 248(3), Schedule 17 paragraphs 9, 24.

(2)

S.I. 1986/1925; this instrument has been amended by a number of instruments: relevant amendments have been made by S.I. 1987/1919, S.I. 2002/1307, S.I. 2003/730 and S.I. 2010/686.