Part XXIV Insolvency

Bankruptcy

I1372 Petitions.

1

The F4FCA 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 5 of the 1985 Act for the sequestration of the estate of an individual.

F31A

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 5 of the 1985 Act for the sequestration of the estate of an individual who is a PRA-regulated person.

2

But F5a 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

F6a regulator has served on him a demand requiring him to establish to the satisfaction of F7that 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) F8or (1A)(b)—

a

F9the 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.

373 Insolvency practitioner’s duty to report F1to FCA and PRA.

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 F13carried 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 F12without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA.

F101A

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 12 of the 1985 Act.

4

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

374F2Powers of FCA or PRA to participate in proceedings.

1

This section applies if a person F15... 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 5 of the 1985 Act for the sequestration of the estate of an individual; or

c

under section 6 of the 1985 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 F16appropriate 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 1985 Act.

3

A copy of the report prepared under section 274 of the 1986 Act (or Article 248 of the 1989 Order) must also be sent to the F16appropriate regulator.

4

A person appointed for the purpose by the F16appropriate 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 17 or 18 of Schedule 6 to the 1985 Act; and

d

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

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.

F147

"The appropriate regulator” means—

a

for the purposes of subsections (2) and (3)—

i

where the individual or entity is a PRA-regulated person, each of the FCA and the PRA, and

ii

in any other case, the FCA;

b

for the purposes of subsection (4)—

i

where the individual or entity is a PRA-regulated person, the FCA or the PRA, and

ii

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.