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The Financial Market Infrastructure Administration (England and Wales) Rules 2018

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Application of the Insolvency Rules

This section has no associated Explanatory Memorandum

12.—(1) The provisions of the Insolvency Rules listed in the table in paragraph (4) apply for the purposes of FMI administration and FMI administration applications.

(2) The applied provisions of the Insolvency Rules have effect for that purpose—

(a)with any specific modifications set out in the table in paragraph (4);

(b)unless the context otherwise requires and subject to any specific modification, with the general modifications set out in paragraph (3); and

(c)with any other necessary modifications.

(3) The general modifications are that—

(a)a reference to an administrator is a reference to the FMI administrator;

(b)a reference to administration is a reference to FMI administration;

(c)a reference to an administration application is a reference to an FMI administration application;

(d)a reference to an administration order is a reference to an FMI administration order;

(e)a reference to the court is a reference to the High Court;

(f)except in Part 3 of the Insolvency Rules, a reference to insolvency proceedings is a reference to proceedings commenced by an FMI administration application;

(g)a reference to proceedings under the 1986 Act (or under any Part or provision of that Act) includes a reference to proceedings commenced by an FMI administration application;

(h)a reference to an insolvency practitioner is a reference to the FMI administrator;

(i)a reference to the company is a reference to the infrastructure company;

(j)a reference to the Insolvency Rules, or to a numbered rule of the Insolvency Rules, is a reference to the Insolvency Rules, or to the numbered rule, as applied (with any modification) by this rule;

(k)a reference to the 1986 Act, a numbered section of that Act or a numbered paragraph of Schedule B1 is a reference to that Act, that section or that paragraph as applied (with any modification) by Part 6 of the 2013 Act; and

(l)all references to the Official Receiver, the County Court and the provisional liquidator are to be ignored.

(4) This paragraph contains the table of applied provisions of the Insolvency Rules.

Applied ruleSubject-matterSpecific modifications
Introductory rules
Introductory rule 6 (and Schedule 3)Punishment of offencesSchedule 3 has effect only so far as it sets out the punishment for contravention of rules 1.56(3), 3.70(2) and 18.6(5).
Part 1 (Interpretation, time and rules about documents)
Chapter 2: Interpretation
1.2Defined terms

(a) For the definition of “office-holder”, there is taken to be substituted “the FMI administrator”.

(b) Ignore the provision made for the interpretation of “certificate of service” and “serve” and “service” (in Schedule 4 to the Insolvency Rules (service of documents)) so far as it has effect in relation to an application to the court for an administration order in respect of a company.

1.3 (and Schedule 5)Calculation of time periods
Chapter 3: Form and content of documents
1.4 to 1.9Form and content of documents
Chapters 4 to 7: Standard contents of notices and documents
1.10 to 1.34Standard contents of notices and documents
Chapter 8: Applications to the court
1.35Standard contents and authentication of applications to the court

(a) This rule does not apply to an FMI administration application (for which the procedure is set out in Part 2 of these Rules), but does apply to—

(i) any other application made to the court under Part 6 of the 2013 Act; or

(ii) any application made under the 1986 Act, as applied by that Part, or under the Insolvency Rules, as applied by these Rules.

(b) In paragraph (2) treat a reference to the 1986 Act (as applied by Part 6 of the 2013 Act) as a reference to that Act (as so applied) and to Part 6 of the 2013 Act.

Chapter 9: Delivery of documents and opting out (sections 246C, 248A of the 1986 Act)(1)
1.36 to 1.53, except 1.49 (use of website by office-holder to deliver a particular document (section 246B of the 1986 Act)(2))Delivery of documents and creditors’ opt out from receiving documents
Chapter 10: Inspection of documents, copies and provision of information
1.54 to 1.58Inspection of documents, copies and provision of information
Part 3 (Administration)
Chapter 1: Interpretation for Part 3
3.1Interpretation (meaning of “pre-administration costs” and “unpaid pre-administration costs”)
Chapter 5: Notice of administrator’s appointment
3.27Publication of administrator’s appointment

(a) Where the infrastructure company is a designated service provider, a notice under paragraph (3) must be delivered also to the operator of the recognised payment system or securities settlement system (or, if there is more than one such system, to each one) in relation to which the infrastructure company provides services.

(b) For the heading specified for the notice of appointment in paragraph (4) there is taken to be substituted “Notice of FMI administrator’s appointment”.

Chapter 6: Statement of affairs
3.28Interpretation (meaning of “nominated person” and “relevant person”)
3.29Statement of affairs: notice requiring and delivery to the administrator (paragraph 47(1) of Schedule B1)
3.30Statement of affairs: content (paragraph 47 of Schedule B1)
3.31Statement of affairs: statement of concurrence
3.32Statement of affairs: filingUpon delivering a copy of the statement of affairs and of any statement of concurrence to the registrar of companies, the FMI administrator must deliver identical copies to the Bank.
3.33Statement of affairs: release from requirement and extension of time
3.34Statement of affairs: expenses
Chapter 7: Administrator’s proposals
3.35Administrator’s proposals: additional content

(a) In paragraph (1)—

(i) in sub-paragraph (j)(i) treat the reference to the purpose of administration as a reference to the objective in section 115 of the 2013 Act(3);

(ii) in sub-paragraph (j)(ii) ignore the words from “, including” to the end;

(iii) ignore sub-paragraph (k); and

(iv) in sub-paragraph (n) treat the reference to creditors as a reference to the Bank.

(b) Ignore paragraphs (6), (7) and (8).

(c) In paragraph (10)(b) treat the reference to paragraph 53 of Schedule B1 as a reference to paragraph 49 of Schedule B1 as applied by Part 6 of the 2013 Act.

3.36Administrator’s proposals: statement of pre-administration costsIn paragraph (c) for the words from “an objective” to the end there is taken to be substituted “the objective in section 115 of the 2013 Act”.
3.37Advertising administrator’s proposals and notices of extension of time for delivery of proposals (paragraph 49 of Schedule B1)A notice under paragraph (2) must be delivered also to the Bank.
Chapter 8: Limited disclosure of statements of affairs and proposals
3.44 to 3.48Limited disclosure of statements of affairs and proposalsRule 3.45 of the Insolvency Rules does not apply in relation to the disclosure to the Bank, in accordance with rule 3.32 of the Insolvency Rules, of the statement of the company’s affairs or a statement of concurrence.
Chapter 9: Disposal of charged property
3.49Disposal of charged property

(a) Notice under paragraph (3) (of the venue of the hearing of an application under paragraph (1)) must be delivered also to the Bank.

(b) The Bank is entitled to appear at the hearing of the application.

(c) The court must deliver to the FMI administrator three sealed copies of the order made on the application and one of them must be delivered to the Bank.

Chapter 10: Expenses of the administration
3.50Expenses
3.51Order of priority
3.52Pre-administration costs

(a) In paragraph (1) treat the reference to the creditors’ committee as a reference to the Bank.

(b) Ignore paragraphs (2) to (4) and (6) to (9).

(c) The FMI administrator must deliver notice of an application under paragraph (5) to the Bank at least 14 days before the hearing of the application, and the Bank is entitled to appear at the hearing.

(d) The court may, if it appears to be a proper case, order the costs of the application, including the Bank’s costs, to be paid as an expense of the FMI administration.

Chapter 11: Extension and ending of administration
3.53Interpretation (meaning of “final progress report”)
3.57Application for order ending administration (paragraph 79 of Schedule B1)

(a) Ignore paragraphs (1)(c) and (2).

(b) Where the Bank intends to make the application, the FMI administrator must prepare the progress report and the statement of next steps at the request of the Bank.

(c) For the purpose of that application, in paragraph (1) treat the first reference to the administrator as a reference to the Bank.

(d) Where the FMI administrator makes the application, the application must be accompanied also by a copy of the consent given by the Bank under paragraph 79(2) of Schedule B1.

(e) At least five business days before the application is filed with the court the applicant must deliver notice of intention to make the application together with the progress report—

(i) where the Bank is the applicant, to the FMI administrator;

(ii) where the FMI administrator is the applicant, to the Bank;

(iii) to the creditors of the infrastructure company;

(iv) to the FCA;

(v) where the infrastructure company is a PRA-authorised person, to the PRA; and

(vi) where the infrastructure company is the operator of a recognised payment system, or a designated service provider which provides services to such an operator, to the Payment Systems Regulator.

(f) The application must be accompanied by a statement that notice has been delivered to the creditors and by copies of any response from creditors to that notice.

(g) Where the court makes an order ending the FMI administration, the court must deliver a copy of the order to the Bank and the FMI administrator, and the applicant must notify all other persons to whom notice of intention to make the application was delivered that the order has been made.

3.59Notice of court order ending the administrationWhere the order is made on an application by the Bank under paragraph 79 of Schedule B1, treat the first reference to the administrator as a reference to the Bank.
3.61Moving from administration to dissolution (paragraph 84 of Schedule B1)
Chapter 12: Replacing the administrator
3.62Grounds for resignationIn paragraph (1)(b) after “insolvency practitioner” there is taken to be inserted “in relation to companies”.
3.63Notice of intention to resign

(a) For paragraph (1) there is taken to be substituted—

“(1) The FMI administrator must deliver a copy of a notice of the intention to resign which is delivered to the Bank in accordance with paragraph 87 of Schedule B1(4)—

(a) to any continuing FMI administrator (person appointed to act jointly or concurrently with the person who delivers the notice);

(b) to the creditors of the infrastructure company;

(c) to the FCA;

(d) where the infrastructure company is a PRA-authorised person, to the PRA; and

(e) where the infrastructure company is the operator of a recognised payment system, or a designated service provider which provides services to such an operator, to the Payment Systems Regulator.”.

(b) Ignore paragraph (2)(c).

(c) For paragraph (4) there is taken to be substituted—

“(4) Each copy of the notice must be delivered—

(a) in a case falling within rule 3.62(1), not later than five business days’ before the resignation date specified in the notice given to the court under paragraph 87(2)(a) of Schedule B1;

(b) in a case falling within rule 3.62(2), not later than five business days’ before the hearing of the application for the court’s permission to resign.”.

3.64Notice of resignation (paragraph 87) of Schedule B1)

For paragraph (1)(b) there is taken to be substituted—

“(b) the Bank and every person to whom a copy of the notice of intention to resign delivered to the Bank in accordance with paragraph 87 of Schedule B1 was delivered under rule 3.63.”.

3.65Application to court to remove administrator from office

Where an application for an order under paragraph 88 of Schedule B1 is made by a person other than the Bank—

(i) the application must state that it is made with the consent of the Bank; and

(ii) each copy of the application delivered under paragraph (2) must be delivered together with a copy of that consent.

3.66Notice of vacation of office when administrator ceases to be qualified to act
3.67Deceased administratorA person who files a notice under paragraph (1) with the court must deliver a copy of the notice to the Bank.
3.68Application to replace administrator

(a) Ignore references to paragraph 95 of Schedule B1.

(b) Ignore paragraph (2)(a).

(c) In paragraph (4) treat the reference to rules 3.12, 3.13 and 3.15(1) and (2) of the Insolvency Rules as a reference to rules 9 and 11 of these Rules.

3.69Appointment of replacement or additional administratorIn paragraph (a) ignore sub-paragraphs (i) to (v).
3.70Administrator’s duties on vacating office
Part 12 (Court procedure and practice)
Chapter 1: General
12.1Court rules and practice to apply
12.2Performance of functions by the Court
Chapter 3: Making applications to court: general
12.6Preliminary

Chapter 3 does not apply to an FMI administration application (for which the procedure is set out in Part 2 of these Rules), but does apply to—

(i) any other application made to the court under Part 6 of the 2013 Act; or

(ii) any application made under the 1986 Act, as applied by that Part, or under the Insolvency Rules, as applied by these Rules

12.7Filing of application
12.8Fixing the venue
12.9Service or delivery of application
12.10Hearing in urgent case
12.11Directions
12.12Hearing and determination without notice
12.13Adjournment of the hearing of an application
Chapter 4: Making applications to court: specific applications
12.17 to 12.22Sub-division B: Applications for private examination – section 236 of the 1986 Act (inquiry into company’s dealings)Ignore references to sections 251N and 366 of the 1986 Act.
12.23 to 12.26Sub-division C: persons unable to manage own property or affairs
Chapter 5: Obtaining information and evidence
12.27 to 12.29Obtaining information and evidence
Chapter 7: The court file
12.39The court file

(a) Paragraph (1) also applies where documents are filed with the court under rule 6 or 7 of these Rules (filing of FMI administration application and other documents).

(b) The right conferred by paragraph (3) is also exercisable—

(i) by the Bank;

(ii) by the FCA;

(iii) where the infrastructure company is a PRA-authorised person, by the PRA; and

(iv) where the infrastructure company is the operator of a recognised payment system, or a designated service provider which provides services to such an operator, by the Payment Systems Regulator.

12.40Office copies of documents
Chapter 8: Costs
12.41 to 12.50Costs of and in connection with insolvency proceedings
Chapter 9: Enforcement procedures
12.51Enforcement of court orders
12.52Orders enforcing compliance
12.53Warrants (general provisions)
12.55Warrants under section 236 of the 1986 Act (inquiry into company’s dealings)
Chapter 10: Appeals
12.58Application of Chapter 10
12.59Appeals and reviews of court orders in corporate insolvency
12.61Procedure on appeal
Chapter 11: Court orders, formal defects and shorthand writers
12.63 to 12.65Court orders, formal defects and shorthand writers
Part 14 (Claims by and distributions to creditors in administration)
Chapter 1: Application and interpretation
14.1Application of Part 14 and interpretation
Chapter 2: Creditors’ claims in administration
14.2Provable debts
14.3Proving a debt
14.4Requirements for proof
14.5Costs of proving
14.6Allowing inspection of proofs
14.7Admission and rejection of proofs for dividend
14.8Appeal against decision on proof
14.9Office-holder not liable for costs under rule 14.8
14.10Withdrawal or variation of proof
14.11Exclusion of proof by the court
14.12Debts of insolvent company to rank equally
14.13Division of unsold assets
14.14Estimate of value of debt
14.15Secured creditor: value of security
14.16Secured creditor: surrender for non-disclosure
14.17Secured creditor: redemption by office-holder
14.18Secured creditor: test of security’s value
14.19Realisation or surrender of security by creditor
14.20Discounts
14.21Debts in foreign currency
14.22Payments of a periodical nature
14.23Interest
14.24Mutual dealings and set-off
Chapter 3: distribution to creditors in administration
14.26Application of Chapter 3 to a particular class of creditors and to distributions
14.28Gazette notice of intended first dividend or distribution
14.29Individual notices to creditors etc. of intended dividend or distributionIgnore paragraph (3).
14.30Contents of notice of intention to declare a dividend or make a distribution
14.31Further contents of notice to creditors owed small debts etc.
14.32Admission or rejection of proofs following last date for proving
14.33Postponement or cancellation of dividend
14.34Declaration of dividend
14.35Notice of declaration of a dividendIgnore paragraph (4).
14.37Contents of last notice about dividend
14.38Sole or final dividend

For the purpose of paragraph (1)(b)(iii), where the amount outstanding consists of, or includes, the FMI administrator’s own remuneration and expenses, the payment of such remuneration and expenses may be made only—

(i) in accordance with the directions (if any) of the Bank; and

(ii) if the Bank is satisfied that the payment will not prejudice the objective in section 115 of the 2013 Act.

14.39Provisions as to dividends
14.40Supplementary provisions as to dividends and distributions
14.41Secured creditors
14.42Disqualification from dividend
14.43Assignment of right to dividend
14.44Debt payable at future time
14.45Non-payment of dividend
Part 15 (Decision making)
Chapter 1: Application of Part
15.1Application of Part 15
Chapter 2: Decision procedures
15.2Interpretation
15.3The prescribed decision procedures
15.4Electronic voting
15.5Virtual meetings
15.6Physical meetings
15.7Deemed consent (section 246ZF of the 1986 Act)(5)
Chapter 3: Notices, voting and venues for decisions
15.8Notices to creditors of decision procedure
15.9Voting in a decision procedure
15.10Venue for decision procedure
15.11Notices of decision procedures or of seeking deemed consent: when and to whom delivered
15.12Notice of decision procedure by advertisement only
15.13Gazetting and advertisement of meeting
15.14Notice to company officers in respect of meetings
15.15Non-receipt of notice of decision
15.16Decisions on remuneration and conduct
Chapter 6: Constitution of meetings
15.20Quorum at meeting
15.21Chair at meetings
15.22The chair - attendance, interventions and questions
Chapter 7: Adjournment and suspension of meetings
15.23Adjournment by chair
15.25Adjournment in absence of chair
15.26Proofs in adjournment
15.27Suspension
Chapter 8: Creditors’ voting rights and majorities
15.28Creditors’ voting rights
15.30Claim made in proceedings in other member States
15.31Calculation of voting rightsIgnore sub paragraphs (1)(b) to (e)and paragraph (6).
15.32Calculation of voting rights: special cases
15.33Procedure for admitting creditors’ claims for voting
15.34Requisite majorities
15.35Appeals against decisions of the convener or chair under Chapter 8
Chapter 9: Exclusions from meetings
15.36Action where person excluded
15.37Indication to excluded person
15.38Complaint
Chapter 10: Contributories’ voting rights and majorities
15.39Contributories’ voting rights and requisite majorities
Chapter 11: Records
15.40Record of a decision
Chapter 12: Company meetings
15.41Company meetings
Part 16 (Proxies and corporate representation)
16.1Application of Part 16 and interpretation (meaning of “the chair”)
16.2Specific and continuing proxies
16.3Blank proxy
16.4Use of proxies
16.5Use of proxies by the chair
16.6Right of inspection and retention of proxies
16.7Proxy-holder with financial interest
16.9Instrument conferring authorisation to represent corporation
Part 18 (reporting and remuneration of office-holders)
Chapter 1: Introductory
18.1Scope of Part 18
Chapter 2: Progress reports
18.2Reporting by the office-holder
18.3Contents of progress reports in administrationIgnore paragraphs (2), (5) and (6).
18.4Information about remuneration
18.5Information about pre-administration costs
18.6Progress reports in administration: timing

A copy of a report delivered under paragraph (4) must be delivered also—

(i) to the Bank;

(ii) to the FCA;

(iii) where the infrastructure company is a PRA-authorised person, to the PRA; and

(iv) where the infrastructure company is the operator of a recognised payment system, or a designated service provider which provides services to such an operator, to the Payment Systems Regulator.

18.9Creditors’ and members’ requests for further information in administration

The right to request further information about remuneration or expenses is also exercisable—

(i) by the Bank;

(ii) by the FCA;

(iii) where the infrastructure company is a PRA-authorised person, by the PRA; and

(iv) where the infrastructure company is the operator of a recognised payment system, or a designated service provider which provides services to such an operator, by the Payment Systems Regulator.

18.10Reporting distribution of property to creditors under rule 14.3
Chapter 4: Remuneration and expenses in administration
18.16Remuneration: principles

(a) The Bank must fix the FMI administrator’s remuneration on one or a combination of the bases set out in paragraph (2)(a)(i), (b) or (c).

(b) For that purpose in paragraphs (4) and (6) treat the reference to the creditors as a reference to the Bank.

(c) Ignore paragraph (5).

(d) The FMI administrator must share with creditors the basis or bases on which remuneration has been fixed under paragraph (a) above.

18.17Remuneration of joint office-holdersAny dispute about the apportionment of remuneration must be referred initially to the Bank, and if a reference to the Bank does not resolve the dispute, may be referred to the court for settlement by order.
18.18Remuneration: procedure for initial determination in an administration

(a) It is for the Bank to determine the basis of remuneration.

(b) Ignore paragraphs (3) and (4).

18.24Remuneration: administrator seeking increase etc.Ignore paragraph (a).
18.28Remuneration: recourse by administrator to the court

(a) Ignore paragraphs (2) to (5).

(b) For paragraphs (6), (7) and (8) there is taken to be substituted—

“(6) The FMI administrator must deliver a notice of the application to the Bank at least 14 days before the hearing.

(7) The Bank may nominate a person to represent the Bank and be heard on the application.

(8) The court may, if it appears to be a proper case, order the costs of the application, including the costs of the Bank (if it nominates a person to represent it), to be paid as an expense of the estate.”.

18.29Remuneration: review at request of administrator

For paragraph (2) there is taken to be substituted—

“(2) A request under paragraph (1) must be made to the Bank, which must determine whether or not to approve the change requested.”.

18.30Remuneration: exceeding the fee estimate

For paragraph (2) there is taken to be substituted—

“(2) A request for approval to draw remuneration in excess of the total amount set out in the fees estimate(6) must be made to the Bank.

(2A) Where there are joint FMI administrators, it is for them to agree between themselves how the approved amount of excess remuneration payable should be apportioned.

(2B) Any dispute arising between them must be referred initially to the Bank, and if a reference to the Bank does not resolve the dispute, may be referred to the court for settlement by order.

(2C) Where the Bank refuses a request under paragraph (2) or the FMI administrator considers the approved amount of excess remuneration to be insufficient, the FMI administrator may apply to the court for an order approving the withdrawal of remuneration in excess of the total amount set out in the fees estimate.”.

18.31Remuneration: new administrator
18.32Remuneration: apportionment of set fees

(a) In paragraph (4) the relevant person is the Bank.

(b) An application under paragraph (9) is to be made to the court.

18.34Remuneration and expenses: application to court by a creditor or member on grounds that remuneration or expenses are excessive
18.36Applications under rule 18.34 where the court has given permission for the application
18.37Applications under rule 18.34 where the court’s permission is not required for the application
(1)

Sections 246(C) and 248A were inserted in the 1986 Act by the Small Business, Enterprise and Employment Act 2015, section 124(1), (3) and (4), and were applied for the purposes of FMI administration by S.I. 2018/208.

(2)

Section 246B was inserted in the 1986 Act by S.I. 2010/18, but is not applied for the purposes of FMI administration.

(3)

Section 115 was amended by the Digital Economy Act 2017 (c.30), Schedule 9(2), paragraph 43 and by S.I 2017/1064.

(4)

The modification of paragraph 87 provides that the FMI administrator may not resign without giving the Bank 28 days’ notice of the intention to do so (see the 2013 Act, Schedule 6, entry for paragraph 87).

(5)

Section 246(ZF) was inserted, together with section 246(ZE), by the Small Business, Enterprise and Employment Act 2015, section 124(1) and (2). Both sections were applied for the purposes of FMI administration by S.I. 2018/208.

(6)

For the meaning of “fees estimate” in rule 18.29 of the Insolvency Rules see rule 1.2 of those Rules.

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