The Payment and Electronic Money Institution Insolvency Regulations 2021

Continuity of supply

36.—(1) This regulation applies where, before the special administration order is made, the institution had entered into arrangements with a supplier for the provision of a supply to the institution.

(2) After the special administration order is made, the supplier—

(a) may not terminate a supply unless—

(i) any charges in respect of the supply, being charges for a supply given after the special administration order is made, remain unpaid for more than 28 days,

(ii) the administrator consents to the termination, or

(iii) the supplier has the permission of the court, which may be given if the supplier can show that the continued provision of the supply would cause the supplier to suffer hardship, and

(b) may not make it a condition of a supply, or do anything which has the effect of making it a condition of the giving of a supply, that any outstanding charges in respect of the supply, being charges for a supply given before the special administration order is made, are paid.

(3) Where, before the special administration order is made, a contractual right to terminate a supply has arisen but has not been exercised, then, for the purposes of this regulation, the making of the special administration order causes that right to lapse and the supply may only be terminated if a ground in paragraph (2)(a) applies.

(4) Any provision in a contract between the institution and the supplier that purports to terminate the agreement if any action is taken to put the institution into special administration is void.

(5) Any expenses incurred by the institution on the provision of a supply after the special administration order is made are to be treated as necessary disbursements in the course of the special administration.

(6) In this regulation—

“accredited network provider” means a person accredited with a relevant system who operates a secure data network through which the institution communicates with the relevant system;

“relevant system” has the meaning set out in regulation 2(1) of the Uncertificated Securities Regulations 2001(1),

“sponsoring system participant” has the meaning set out in regulation 3 of the Uncertificated Securities Regulations 2001 (in the definition of “system participant”),

“supplier” means the person controlling the provision of a supply to the institution under a licence, sub-licence or other arrangement, and includes a company that is a group undertaking (within the meaning of section 1161(5) of the CA 2006) in respect of the institution, but does not include payment system operators;

“supply” means a supply of—

(a)

services relating to the safeguarding of relevant funds;

(b)

computer hardware or software or other hardware used by the institution,

(c)

financial data,

(d)

infrastructure permitting electronic communication services,

(e)

data processing,

(f)

secure data networks provided by an accredited network provider, or

(g)

access to a relevant system by a sponsoring system participant,

but does not include any services provided for in the contract between the institution and the supplier beyond the provision of the supply.

(1)

S.I. 2001/3755, to which there are amendments not relevant to these Regulations.