Part XV

The Financial Services Compensation Scheme

Provisions of the scheme

Rights of the scheme in insolvency
215
1
The compensation scheme may make provision—
a
about the effect of a payment of compensation under the scheme on rights or obligations arising out of matters in connection with which the compensation was paid;
b
giving the scheme manager a right of recovery in respect of those rights or obligations.
2
Such a right of recovery conferred by the scheme does not, in the event of a person's insolvency, exceed such right (if any) as the claimant would have had in that event.
2ZA
The compensation scheme may also make provision in relation to a relevant person, or to a successor of a description falling within section 213(1)(b), who enters into or carries out funeral plan contracts and is unable, or likely to be unable, to satisfy claims made against them—
a
about rights or obligations in connection with any trust or contract of insurance relating to the funeral plan contracts entered into or carried out by such a person or successor;
b
about the effect of a payment of compensation, or of a payment in connection with securing continuity of funeral plan contracts under the scheme, on rights and obligations arising out of matters in connection with which the payment was made;
c
giving the scheme manager a right of recovery in respect of the rights or obligations referred to in paragraphs (a) and (b).
2ZB
The amount required to be paid to the scheme manager under such a right of recovery conferred by the scheme may not exceed the amount paid or (in the opinion of the scheme manager) to be paid out by the scheme manager in connection with those funeral plan contracts.
2ZC
For the purposes of subsection (2ZA)(a), the provision that may be made includes—
a
provision in respect of rights or obligations that came into existence before or after the date on which that subsection comes into force;
b
provision to vary existing rights or obligations;
c
provision to create new rights in favour of, or obligations to, the scheme manager which override existing rights or obligations.
2A
Any payment made by the scheme manager under section 214B(2) in connection with the exercise of a stabilisation power in respect of a bank, building society or credit union is to be treated as a debt due to the scheme manager from that bank, building society or (as the case may be) credit union.
2B
In
subsection (2A)
—
- “bank” has the meaning given in section 2 of the Banking Act 2009;
- “building society” has the meaning given in the Building Societies Act 1986;
- “credit union” means a credit union within the meaning of—
  1. the Credit Unions Act 1979; or
  2. article 2 of the Credit Unions (Northern Ireland) Order 1985.
3
If a person other than the scheme manager makes an administration application under Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to —
a
a company or partnership which is a relevant person; or
b
a body corporate or unincorporated association which is a relevant exchange;
the scheme manager has the same rights as are conferred on the regulators by section 362.
3A
In subsection (3) the reference to making an administration application includes a reference to—
a
appointing an administrator under paragraph 14 or 22 of Schedule B1 to the 1986 Act
or paragraph 15 or 23 of Schedule B1 to the 1989 Order
, or
b
filing with the court a copy of notice of intention to appoint an administrator under
any
of those paragraphs.
4
If a person other than the scheme manager presents a petition for the winding up of a body which is a relevant person or relevant exchange , the scheme manager has the same rights as are conferred on the regulators by section 371.
5
If a person other than the scheme manager presents a bankruptcy petition to the court in relation to an individual who, or an entity which, is a relevant person, the scheme manager has the same rights as are conferred on the regulators by section 374.
6
Insolvency rules may be made for the purpose of integrating any procedure for which provision is made as a result of subsection (1) into the general procedure on the administration of a company or partnership or on a winding-up, bankruptcy or sequestration.
7
“Bankruptcy petition” means 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 2 or 5 of the 2016 Act for the sequestration of the estate of an individual; or
c
under section 6 of the 2016 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.
8
“Insolvency rules” are—
a
for England and Wales, rules made under sections 411 and 412 of the 1986 Act;
b
for Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and
c
for Northern Ireland, rules made under Article 359 of the 1989 Order and section 55 of the Judicature (Northern Ireland) Act 1978.
9
... “the 1986 Act”, “the 1989 Order” , “the 2016 Act” and “court” have the same meaning as in Part XXIV.
S. 215 wholly in force at 18.6.2001; s. 215 not in force at Royal Assent see s. 431(2); s. 215(6)(8)(9) in force at 25.2.2001 by S.I. 2001/516, art. 2(a), Sch. Pt. 1; s. 215 in force in so far as not already in force at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.
S. 215(3)(4)(6) applied (with modifications) (6.4.2001 for E.W.S and 13.9.2004 for N.I.) by S.I. 2001/1090, regs. 1, 6; S.R. 2004/307, reg. 6
1978 c. 23.
Pt. XV (ss. 212-224) excluded (27.4.2002) by The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), art. 9J (as inserted by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2002 (S.I. 2002/682), arts. 1(2), 4)
Pt. XV (ss. 212-224) modified (2.7.2002) by The Financial Services and Markets Act 2000 (Consequential Amendments and Transitional Provisions) (Credit Unions) Order 2002 (S.I. 2002/1501), art. 5
Words in s. 215(3) substituted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248(3), 279, Sch. 17 para. 54(2); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 1(3)-(5), 3-8 (as amended by S.I. 2003/2332, art. 2))
S. 215(3A) inserted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248(3), 279, Sch. 17 para. 54(3); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 1(3)-(5), 3-8 (as amended by S.I. 2003/2332, art. 2))
Words in s. 215(3) substituted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(2); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)
Words in s. 215(3A)(a) inserted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(3)(a); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)
Word in s. 215(3A)(b) substituted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(3)(b); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)
Pt. 15 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 29 (with art. 30(6))
Pt. 15 modified (7.10.2008 at 9.30 a.m.) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 14 (with art. 15(8)
Pt. 15 modified (8.10.2008 at 12.15 p.m.) by The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674), art. 15 (with art. 16(8))
S. 215(1) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 175(2), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.
Words in s. 215(2) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 175(3), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.
S. 215: heading substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by virtue of Banking Act 2009 (c. 1), ss. 175(4), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.
S. 215 modified (21.2.2009) by The Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009 (S.I. 2009/317), art. 5(1)(2)
S. 215 applied (with modifications) (8.2.2011 with application in accordance with reg. 27(a) of the applying S.I.) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 27, Sch. 6 Pt. 2 para. 3(2) (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 198(s)(i) (with Sch. 2 para. 213))
S. 215 applied (with modifications) (E.W.S.) (6.4.2014) by The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), arts. 1, 5 (with art. 10)
S. 215(2ZA)-(2ZC) inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(5)(a)
Word in s. 215(7)(c) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(a)(ii)
Words in s. 215(7)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(a)(i)
Words in s. 215(9) inserted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(b)(ii)
Words in s. 215(2B) substituted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(5)(b)
S. 215(2A)(2B) inserted (26.3.2015) by The Deposit Guarantee Scheme Regulations 2015 (S.I. 2015/486), regs. 1(2), 13(3)
Words in s. 215(3) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 25(2) (with reg. 7)
Words in s. 215(9) omitted (30.11.2016) by virtue of The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(b)(i)
Words in s. 215(4) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 25(3) (with reg. 7)
Word in s. 215 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 5 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.