Part XXIV Insolvency

Administration orders

C1C2C12F1359 Administration order

C31

The F39FCA may make an administration application under Schedule B1 to the 1986 Act F2or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which—

a

is or has been an authorised person F41or recognised investment exchange,

b

is or has been an appointed representative, or

c

is carrying on or has carried on a regulated activity in contravention of the general prohibition.

F381A

The PRA may make an administration application under Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which is a PRA-regulated person.

C32

Subsection (3) applies in relation to an administration application made (or a petition presented) by F42a regulator by virtue of this section.

C33

Any of the following shall be treated for the purpose of paragraph 11(a) of Schedule B1 to the 1986 Act F3or paragraph 12(a) of Schedule B1 to the 1989 Order as unable to pay its debts—

a

a company or partnership in default on an obligation to pay a sum due and payable under an agreement, F4. . .

b

an authorised deposit taker in default on an obligation to pay a sum due and payable in respect of a relevant deposit.F5, and—

c

an authorised reclaim fund in default on an obligation to pay a sum payable as a result of a claim made by virtue of section 1(2)(b) or 2(2)(b) of the Dormant Bank and Building Society Accounts Act 2008.

C34

In this section—

  • “agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the company or partnership,

  • “authorised deposit taker” means a person with a F40Part 4A permission to accept deposits (but not a person who has a F40Part 4A permission to accept deposits only for the purpose of carrying on another regulated activity in accordance with that permission),

  • F6“authorised reclaim fund” means a reclaim fund within the meaning given by section 5(1) of the Dormant Bank and Building Society Accounts Act 2008 that is authorised for the purposes of this Act;

  • “company” means a company—

    1. a

      in respect of which an administrator may be appointed under Schedule B1 to the 1986 Act, or

    2. b

      F7in respect of which an administrator may be appointed under Schedule B1 to the 1989 Order,

  • “relevant deposit” shall, ignoring any restriction on the meaning of deposit arising from the identity of the person making the deposit, be construed in accordance with—

    1. a

      section 22,

    2. b

      any relevant order under that section, and

    3. c

      Schedule 2.

5

The definition of “authorised deposit taker” in subsection (4) shall be construed in accordance with—

a

section 22,

b

any relevant order under that section, and

c

Schedule 2.

C4360 Insurers.

1

The Treasury may by order provide that such provisions of Part II of the 1986 Act (or Part III of the 1989 Order) as may be specified are to apply in relation to insurers with such modifications as may be specified.

2

An order under this section—

a

may provide that such provisions of this Part as may be specified are to apply in relation to the administration of insurers in accordance with the order with such modifications as may be specified; and

b

requires the consent of the Secretary of State.

3

“Specified” means specified in the order.

C5C6C13F8361Administrator’s duty to report to F26FCA and PRA

1

This section applies where a company or partnership is—

a

in administration within the meaning of Schedule B1 to the 1986 Act, or

F9b

in administration within the meaning of Schedule B1 to the 1989 Order.

F292

If the administrator thinks that the company or partnership is carrying on, or has carried on—

a

a regulated activity in contravention of the general prohibition, or

b

a credit-related regulated activity in contravention of section 20,

the administrator must report the matter to the appropriate regulator without delay.

F282A

"The appropriate regulator” means—

a

where the regulated activity is a PRA-regulated activity, the FCA and the PRA;

b

in any other case, the FCA.

F303

Subsection (2) does not apply where—

a

the administration arises out of an administration order made on an application made or petition presented by a regulator, and

b

the regulator's application or petition depended on a contravention by the company or partnership of the general prohibition.

C7C8C9C14362F27Powers of FCA and PRA to participate in proceedings.

1

This section applies if a person F33... F10makes an administration application under Schedule B1 to the 1986 Act F11or Schedule B1 to the 1989 Order in relation to a company or partnership which—

a

is, or has been, an authorised person F34or recognised investment exchange;

b

is, or has been, an appointed representative; or

c

is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

F121A

This section also applies in relation to—

a

the appointment under paragraph 14 or 22 of Schedule B1 to the 1986 Act F13or paragraph 15 or 23 of Schedule B1 to the 1989 Order of an administrator of a company of a kind described in subsection (1)(a) to (c), or

b

the filing with the court of a copy of notice of intention to appoint an administrator under F14any of those paragraphs.

F311B

This section also applies in relation to—

a

the appointment under paragraph 22 of Schedule B1 to the 1986 Act (as applied by order under section 420 of the 1986 Act), or under paragraph 23 of Schedule B1 to the 1989 Order (as applied by order under Article 364 of the 1989 Order), of an administrator of a partnership of a kind described in subsection (1)(a) to (c), or

b

the filing with the court of a copy of notice of intention to appoint an administrator under either of those paragraphs (as so applied).

2

The F35appropriate regulator is entitled to be heard—

a

at the hearing of the F15administration application F16or the petition; and

b

at any other hearing of the court in relation to the company or partnership under Part II of the 1986 Act (or Part III of the 1989 Order).

3

Any notice or other document required to be sent to a creditor of the company or partnership must also be sent to the F35appropriate regulator.

F174

The F35appropriate regulator may apply to the court under paragraph 74 of Schedule B1 to the 1986 Act F18or paragraph 75 of Schedule B1 to the 1989 Order.

4A

In respect of an application under subsection (4)—

a

paragraph 74(1)(a) and (b) shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words “harm the interests of some or all members or creditors”, and

F19b

paragraph 75(1)(a) and (b) of Schedule B1 to the 1989 Order shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words harm the interests of some or all members or creditors.

5

A person appointed for the purpose by the F35appropriate regulator is entitled—

a

to attend any meeting of creditors of the company or partnership summoned under any enactment;

b

to attend any meeting of a committee established under F20paragraph 57 of Schedule B1 to the 1986 Act (or F21paragraph 58 of Schedule B1 to the 1989 Order; and

c

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

C106

If, during the course of the administration of a company, a compromise or arrangement is proposed between the company and its creditors, or any class of them, the F35appropriate regulator may apply to the court under F22section 896 or 899 of the Companies Act 2006.

F327

"The appropriate regulator” means—

a

for the purposes of subsections (2) to (4) and (6)—

i

where the company or partnership 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 (5)—

i

where the company or partnership is a PRA-regulated person, the FCA or the PRA, and

ii

in any other case, the FCA.

8

But where the administration application was made by a regulator “the appropriate regulator” does not include that regulator.

C11C15362AF25 Administrator appointed by company or directors

1

This section applies in relation to a company F37or partnership of a kind described in section 362(1)(a) to (c).

F362

An administrator of the company or partnership may not be appointed under a provision specified in subsection (2A) without the consent of the appropriate regulator.

2A

Those provisions are—

a

paragraph 22 of Schedule B1 to the 1986 Act (including that paragraph as applied in relation to partnerships by order under section 420 of that Act);

b

paragraph 23 of Schedule B1 to the 1989 Order (including that paragraph as applied in relation to partnerships by order under article 364 of that Order).

2B

“The appropriate regulator” means—

a

where the company or partnership is a PRA-regulated person, the PRA, and

b

in any other case, the FCA.

3

Consent under subsection (2)—

a

must be in writing, and

b

must be filed with the court along with the notice of intention to appoint under paragraph 27 of F23Schedule B1 to the 1986 Act or paragraph 28 of Schedule B1 to the 1989 Order.

4

In a case where no notice of intention to appoint is required—

a

subsection (3)(b) shall not apply, but

b

consent under subsection (2) must accompany the notice of appointment filed under paragraph 29 of F24Schedule B1 to the 1986 Act or paragraph 30 of Schedule B1 to the 1989 Order.