The Risk Transformation Regulations 2017

Dissolution of a cell: procedure

178.—(1) A protected cell company’s instrument of incorporation may contain provision for the dissolution of a cell, but that provision is subject to this regulation.

(2) A protected cell company must notify the following people (the “interested persons”) if it intends to dissolve a cell—

(a) any undertaking from whom the protected cell company has assumed a risk on behalf of a relevant cell;

(b) any investor who holds an investment issued on behalf of a relevant cell;

(c) any other creditor of the protected cell company in respect of a relevant cell;

(d) the FCA; and

(e) the PRA.

(3) In paragraph (2), a “relevant cell” is—

(a) the cell which the protected cell company intends to dissolve; and

(b) any other cell which has entered into enforceable arrangements with that cell.

(4) But paragraph (2) does not apply where a cell is deemed to be dissolved as a consequence of a Case 1 transfer scheme or Case 2 transfer scheme (within the meaning given by regulation 170).

(5) The notification referred to in paragraph (2) must—

(a) be in writing;

(b) identify the cell which the protected cell company intends to dissolve;

(c) state the date on which the notification is sent; and

(d) state that if the recipient intends to object to the dissolution of the cell, then any objections must be received by the protected cell company within a period of two months beginning with the date when the notification was sent.

(6) The cell may only be dissolved in the following cases—

(a) none of the interested persons object within the period referred to in paragraph (5)(d);

(b) one or more of the interested persons objects within the period referred to in paragraph (5)(d) and those objections are subsequently withdrawn;

(c) one or more of the interested persons objects within the period referred to in paragraph (5)(d) and—

(i) the FCA or PRA is not one of the interested persons who objects; and

(ii) the person or persons objecting have not commenced court proceedings against the protected cell company in respect of the cell, or put the cell into administration or liquidation, within the relevant period;

(d) the cell is deemed to be dissolved by virtue of—

(i) regulation 176(2)(a) or 176(3)(j); or

(ii) an order of the court made under regulation 175 or 177;

(e) the cell is put into administration and the cell is deemed to be dissolved at the end of administration (see paragraph 84 of Schedule B1 to the Insolvency Act 1986 and paragraph 85 of Schedule B1 to the Insolvency (Northern Ireland) Order 1989, as applied by regulation 166);

(f) the cell is put into liquidation and the cell is dissolved after winding up (see sections 202 to 205 of the Insolvency Act 1986(1) and Articles 167 to 169 of the Insolvency (Northern Ireland) Order 1989, as applied by regulation 166);

(g) the court directs that the cell is to be dissolved.

(7) In paragraph (6)(c), the “relevant period”—

(a) begins with the date when notification is sent in accordance with paragraph (2) or, if notifications are sent on more than one date, the date when the last such notification is sent; and

(b) lasts for a period of 12 months or, if court proceedings are brought against the protected cell company in respect of the cell or an application is made to court for the administration or winding up of the cell, such other period as may be specified by the court.

(8) For the purposes of paragraph (7)(b), the court may specify another period after the expiry of the 12 month period referred to in that paragraph, provided the cell has not been dissolved when the court specifies that period.

(9) When a protected cell company dissolves a cell, it must notify the interested persons.

(10) The notification referred to in paragraph (9) must—

(a) be in writing;

(b) identify the cell which has been dissolved; and

(c) state the time and date when it was dissolved.

(1)

Sections 202, 204 and 205 were amended by section 126 of and Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (c. 26). Section 204 was also amended by SSI 2016/141.