The Risk Transformation Regulations 2017

Consequences of unlawful distribution

128.—(1) This regulation applies to a distribution, or a part of a distribution, which is made by a protected cell company—

(a) from assets held on behalf of a part (“part A”) of the protected cell company;

(b) to a person holding a share issued by the protected cell company on behalf of a part of a protected cell company (either part A or another part); and

(c) in contravention of regulation 125 or 126.

(2) If at the time of the distribution the person knows or has reasonable grounds for believing that it is made in contravention of regulation 125 or 126, the person is liable—

(a) to repay the distribution (or that part of it, as the case may be) to the protected cell company; or

(b) in the case of a distribution made otherwise than in cash, to pay the protected cell company a sum equal to the value of the distribution (or part of it) at that time.

(3) This regulation is without prejudice to any obligation imposed apart from this regulation on a person to repay a distribution which was made unlawfully to that person.

(4) A payment made to a protected cell company in accordance with paragraph (2) must be held by the protected cell company on behalf of part A.