The Risk Transformation Regulations 2017

• (b) in the case of a transfer made otherwise than in cash, to pay the protected cell company a sum equal to the value of the transfer (or part of it) at that time.

• (3) This regulation is without prejudice to any obligation imposed apart from this regulation on a person to repay a transfer which was made unlawfully to that person.

• (4) A payment made to a protected cell company in accordance with paragraph (2) must be held by the protected cell company on behalf of part A.

Perpetual debentures

150

A condition contained in debentures, or in a deed for securing debentures, is not invalid by reason only that the debentures are made redeemable only—

• (a) on the happening of a contingency (however remote); or

• (b) on the expiration of a period (however long),

any rule of equity notwithstanding.

Enforcement of contract to subscribe for debentures

151

A contract with a protected cell company to take up and pay for debentures may be enforced by an order for specific performance.

Debentures to bearer (Scotland)

152

Notwithstanding anything in the statute of the Scots Parliament of 1696, chapter 25, debentures to bearer issued in Scotland are valid and binding according to their terms.

Liability of trustees of debentures

153

• (1) A provision contained in—

• (a) a trust deed for securing an issue of debentures by a protected cell company; or

• (b) any contract with the holders of debentures issued by a protected cell company, secured by a trust deed,

is void insofar as it would have the effect of exempting a trustee (“T”) of the deed from, or indemnifying T against, liability for breach of trust where T fails to show the degree of care and diligence required of T as trustee, having regard to the provisions of the trust deed conferring on T any powers, authorities or discretions.

• (2) Paragraph (1) does not invalidate—

• (a) a release otherwise validly given in respect of anything done or omitted to be done by T before the giving of the release;

• (b) any provision enabling such a release to be given—

• (i) on being agreed to by a majority of not less than 75% in value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose; and

• (ii) either with respect to specific acts or omissions or on the trustee dying or ceasing to act.

CHAPTER 12 — Security interests

Creation of security interests

154

• (1) A protected cell company may only create or assert a security interest over assets held by the protected cell company on behalf of a part of the protected cell company if the security interest does not secure a liability or obligation which is incurred on behalf of, or which is attributable to, another part of the protected cell company.

• (2) A protected cell company may only create or assert a security interest over the undertaking of part of the protected cell company if the security interest does not secure a liability or obligation which is incurred on behalf of, or which is attributable to, another part of the protected cell company.

• (3) A security interest is void if it contravenes the requirements of paragraph (1) or (2).

• (4) In this regulation, “security interest” means—

• (a) a lien, pledge, charge or mortgage; or

• (b) a standard security, assignation in security or any other right in security constituted under the law of Scotland, including any heritable security.

Registration of charges

155

• (1) Part 25 (company charges) of the Companies Act 2006 applies in relation to a charge created by a protected cell company as it applies in relation to a charge created by a company registered under that Act .

• (2) In their application in relation to charges created by a protected cell company, the provisions of Part 25 of the Companies Act 2006 apply with the following modifications—

• (a) references to the registrar are to be treated as references to the FCA;

• (b) references to the registered number of a company which is a protected cell company are to be treated as references to the number given to the protected cell company by the FCA in accordance with regulation 31(1);

• (c) the modifications specified in the second column of Table 4 in relation to the sections of the Companies Act 2006 specified in the first column of Table 4.

Sections of Companies Act 2006	Modifications
Section 859D (particulars to be delivered to registrar)	In subsection (2)(b), treat the reference to the property and undertaking of the company as a reference to the property held by the protected cell company on behalf of the part of the protected cell company to which the charge relates and the undertaking of that part.
Section 859F (extension of period allowed for delivery)	In subsection (2)(a)(ii), treat the reference to the creditors or shareholders of the company as a reference to the persons who are creditors or shareholders in respect of the part of the protected cell company to which the charge relates.
Section 859H (consequence of failure to deliver charges)	In paragraphs (a) and (b) of subsection (3), treat the references to the company as references to the part of the protected cell company to which the charge relates. In paragraph (c) of subsection (3), treat the reference to a creditor of the company as a reference to a person who is a creditor in respect of the part of the protected cell company to which the charge relates.
Section 859K (registration of enforcement of security)	Ignore this section.
Section 859M (rectification of register)	In subsection (2)(a)(ii), treat the reference to the creditors or shareholders of the company as a reference to the persons who are creditors or shareholders in respect of the part of the protected cell company to which the charge relates.
Section 859P (companies to keep copies of instruments creating and amending charges)	Ignore subsection (5).
Section 859Q (instruments creating charges to be available for inspection)	In subsection (2)(b), treat the reference to a place specified in regulations under section 1136 of the Companies Act 2006 as a reference to an alternative inspection location notified to the FCA in accordance with regulation 67.
Section 859Q (instruments creating charges to be available for inspection)	In subsection (4)(a), treat the reference to any creditor or member of the company as a reference to any person who is a creditor or shareholder in respect of the part of the protected cell company to which the charge relates.
Section 893 (power to make provision for effect of registration in special register)	Ignore this section.
Section 894 (general power to make amendments to this Part)	Ignore this section.

• (3) In this regulation, “charge” has the meaning given by section 859A(7) of the Companies Act 2006.

CHAPTER 13 — Public offers of securities

Meaning of “securities”

156

In this Chapter, “securities” means shares or debentures.

Prohibition on offering securities to the public

157

• (1) A protected cell company must not—

• (a) offer to the public any securities issued on behalf of any part of the protected cell company; or

• (b) allot or agree to allot any securities issued on behalf of any part of the protected cell company with a view to their being offered to the public.

• (2) Unless the contrary is proved, an allotment or agreement to allot securities is presumed to be made with a view to their being offered to the public if an offer of the securities (or any of them) to the public is made—

• (a) within a period of six months beginning with the date of the allotment or agreement to allot; or

• (b) before the receipt by the protected cell company of the whole of the consideration to be received by it in respect of the securities.

Meaning of “offer to the public”

158

• (1) This regulation explains what is meant in regulation 157 by an offer of securities to the public.

• (2) An offer to the public includes an offer to any section of the public, however selected.

• (3) An offer is not to be regarded as an offer to the public if—

• (a) it is an offer made solely to qualified investors; and

• (b) it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in securities issued by the protected cell company becoming available to persons who are not qualified investors.

• (3A) In this regulation, “qualified investor” has the meaning given in regulation 10.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restraining order

159

• (1) The High Court or, in Scotland, the Court of Session may make an order under this regulation if it appears to the court on an application under this regulation that a protected cell company is proposing to act in contravention of regulation 157.

• (2) An order under this regulation is an order restraining the protected cell company from contravening that regulation.

• (3) An application for an order under this regulation may be made by—

• (a) the FCA;

• (b) a person holding securities issued by the protected cell company; or

• (c) a creditor of the protected cell company.

Remedial orders

160

• (1) A “remedial order” is an order for the purpose of putting a person affected by anything done in contravention of regulation 157 in the position the person would have been in if it had not been done.

• (2) The High Court or, in Scotland, the Court of Session may make a remedial order under this regulation if it appears to the court on an application under this regulation that a protected cell company has acted in contravention of regulation 157.

• (3) The following provisions are without prejudice to the generality of the power to make a remedial order.

• (4) Where a protected cell company has—

• (a) allotted securities pursuant to an offer to the public; or

• (b) allotted or agreed to allot securities with a view to their being offered to the public,

a remedial order may require any person knowingly concerned in the contravention of regulation 157 to offer to purchase any of those securities at such price and on such other terms as the court thinks fit.

• (5) A remedial order may be made—

• (a) against any person knowingly concerned in the contravention, whether or not the person is an officer of the protected cell company;

• (b) notwithstanding anything in the protected cell company's instrument of incorporation (which includes, for this purpose, the terms on which any securities are allotted or held);

• (c) whether or not the holder of the securities subject to the order is the person to whom the protected cell company allotted or agreed to allot them.

• (6) Where a remedial order is made in respect of a part of a protected cell company, the court may provide for the reduction of that part's capital accordingly.

Validity of allotment etc not affected

161

Nothing in this Chapter affects the validity of any allotment or sale of securities or of any agreement to allot or sell securities.

CHAPTER 14 — Accounts, reports, audit and auditors

Meaning of “Companies Act regime”

162

In this Chapter, “Companies Act regime” means Parts 15 (accounts and reports) and 16 (audit) of the Companies Act 2006 and all subordinate legislation made under those Parts.

Application of Companies Act regime

163

• (1) The Companies Act regime applies to protected cell companies as it applies to companies which—

• (a) are incorporated under the Companies Act 2006; and

• (b) are private companies limited by shares (within the meaning given by sections 3 and 4 of that Act).

• (2) In their application to protected cell companies, the provisions of the Companies Act regime apply with the following modifications—

• (a) references to the registrar are to be treated as references to the FCA;

• (b) references to the registered number of a company which is a protected cell company are to be treated as references to the number given to the protected cell company by the FCA under regulation 31(1);

• (c) references to the articles or constitution of a company which is a protected cell company are to be treated as references to the protected cell company's instrument of incorporation;

• (d) references to the members of a company which is a protected cell company are to be treated as references to the protected cell company's shareholders, except in the following sections of the Companies Act 2006 where they are to be treated as references to the persons holding shares issued by the protected cell company on behalf of the core—

• (i) section 485(4) (appointment of auditors of private company: general);

• (ii) section 488(1) (prevention by members of deemed re-appointment of auditor);

• (iii) section 492(1) (fixing of auditor's remuneration);

• (iv) section 502 (auditor's rights in relation to resolutions and meetings);

• (v) section 510(1) (resolution removing auditor from office);

• (vi) section 511 (special notice required for resolution removing auditor from office);

• (vii) section 515 (failure to re-appoint auditor: special notice required for resolution at general meeting) ;

• (viii) section 518 (rights of resigning auditor) ;

• (ix) section 536 (authorisation of agreement by members of the company);

• (e) references to an ordinary resolution of the members of a protected cell company are to be treated as references to a resolution of the persons holding shares issued by the protected cell company on behalf of the core which has been approved by a simple majority of the total voting rights of those shareholders who would be entitled to vote on the resolution;

• (f) references to the winding up of a company which is a protected cell company are to be treated as references to the winding up of any part of the protected cell company;

• (g) the modifications specified in the second column of Table 5 in relation to the provisions of the Companies Act 2006 specified in the first column of Table 5.

Provision	Modification
Section 388 (where and for how long records to be kept)	In subsection (1)(a), treat the reference to the registered office as including a reference to an alternative inspection location notified to the FCA in accordance with regulation 67.
Section 414C (contents of strategic report)	In subsection (1), treat the reference to section 172 of the Companies Act 2006 as a reference to that section as applied by regulation 83(1).
Section 502 (auditor's rights in relation to resolutions and meetings)	In subsection (1), treat the reference to Chapter 2 of Part 13 of the Companies Act 2006 as a reference to Chapter 10 of Part 4 of these Regulations.
Section 518 (rights of resigning auditor)	Where a protected cell company sends a notice or statement in accordance with this section, it must send a copy of that notice or statement to the persons holding shares or debentures issued by the protected cell company on behalf of a cell.
Section 518 (rights of resigning auditor)	Where such a person receives a copy of a notice of a general meeting, that person may attend (but not vote) at the general meeting.
Section 536 (authorisation of agreement by members of the company)	In subsection (2), treat the references to a resolution as references to a resolution of the persons holding shares issued by the protected cell company on behalf of the core.

Relationship with regulation 46

164

Any accounts or records which a protected cell company is required to keep in accordance with the Companies Act regime, as applied by regulation 163, are in addition to the accounts and records that the protected cell company must keep in accordance with regulation 46 (records and accounts of assets, liabilities and obligations).

Application of Part 42 (statutory auditors) of the Companies Act 2006

165

For the purposes of section 1210(1)(a) (meaning of “statutory auditor” etc) of the Companies Act 2006, a person appointed as an auditor of a protected cell company under Part 16 of the Companies Act 2006, as applied by regulation 163, is to be treated as an auditor appointed under Part 16 of that Act.

CHAPTER 15 — Insolvency

Insolvency of a cell

166

• (1) A cell of a protected cell company may be—

• (a) put into administration as if it were a company under Schedule B1 (administration) to the Insolvency Act 1986 or Schedule B1 (administration) to the Insolvency (Northern Ireland) Order 1989 ; or

• (b) wound up as if it were an unregistered company under Part 5 (winding up of unregistered companies) of the Insolvency Act 1986 or Part 6 (winding up of unregistered companies) of the Insolvency (Northern Ireland) Order 1989.

• (2) For these purposes, the insolvency legislation applies in relation to the cell with the modifications set out in Schedule 2.

• (3) Where a written demand is served on a cell by a creditor in accordance with section 222(1)(a) (inability to pay debts: unpaid creditor of £750 or more) of the Insolvency Act 1986 or Article 186(1)(a) (inability to pay debts: unpaid creditor of £750 or more) of the Insolvency (Northern Ireland) Order 1989, the cell may apply to the High Court (or in Scotland the Court of Session) for an injunction restraining (or in Scotland an interdict prohibiting) the creditor from presenting or giving notice of a winding-up petition as if the cell has distinct legal personality.

• (4) The entry of a cell of a protected cell company into administration or liquidation does not affect the power of the protected cell company or the directors of the protected cell company to act in relation to the core or the cells.

• (5) But the protected cell company and the directors of the protected cell company may not exercise a management power in relation to a cell in administration or liquidation without the consent of the administrator or liquidator of the cell.

• (6) For the purposes of paragraph (5)—

• (a) “management power” means a power which could be exercised so as to interfere with the exercise of the powers of the administrator or liquidator;

• (b) it is immaterial whether the power is conferred on the protected cell company or the directors by an enactment or an instrument; and

• (c) consent may be general or specific.

Insolvency of the core

167

• (1) The core of a protected cell company may be—

• (a) put into administration as if it were a company under Schedule B1 (administration) to the Insolvency Act 1986 or Schedule B1 (administration) to the Insolvency (Northern Ireland) Order 1989; or

• (b) wound up as if it were an unregistered company under Part 5 (winding up of unregistered companies) of the Insolvency Act 1986 or Part 6 (winding up of unregistered companies) of the Insolvency (Northern Ireland) Order 1989.

• (2) For these purposes, the insolvency legislation applies in relation to the core with the modifications set out in Schedule 3.

• (3) Where a written demand is served on the core by a creditor in accordance with section 222(1)(a) (inability to pay debts: unpaid creditor of £750 or more) of the Insolvency Act 1986 or Article 186(1)(a) (inability to pay debts: unpaid creditor of £750 or more) of the Insolvency (Northern Ireland) Order 1989, the core may apply to the High Court (or in Scotland the Court of Session) for an injunction restraining (or in Scotland an interdict prohibiting) the creditor from presenting or giving notice of a winding-up petition as if the core has distinct legal personality.

• (4) The entry of the core of a protected cell company into administration or liquidation does not affect the powers of the protected cell company or the directors of the protected cell company to act in relation to the core or the cells.

• (5) But the protected cell company and the directors of the protected cell company may not exercise a management power in relation to—

• (a) the core of the protected cell company; or

• (b) any cell of the protected cell company which is not in administration or liquidation,

without the consent of the administrator or liquidator of the core.

• (6) For the purposes of paragraph (5)—

• (a) “management power” means a power which could be exercised so as to interfere with the exercise of the powers of the administrator or liquidator;

• (b) it is immaterial whether the power is conferred on the protected cell company or the directors by an enactment or an instrument; and

• (c) consent may be general or specific.

Concurrent insolvency

168

Where two or more parts of a protected cell company are in administration or liquidation concurrently by virtue of regulation 166 or 167, then—

• (a) the insolvency legislation (as applied by regulations 166(2) or 167(2)) applies in relation to each part separately; and

• (b) the administrators or liquidators (as the case may be) of those parts must cooperate fully with each other in the discharge of their functions.

Disapplication of other insolvency proceedings

169

• (1) Except to the extent provided for in this Chapter—

• (a) a protected cell company may not propose a voluntary arrangement;

• (b) neither a protected cell company nor a part of a protected cell company may be placed into administration;

• (c) a receiver (including an administrative receiver) may not be appointed in respect of any property held by the protected cell company;

• (d) a protected cell company may not pass a resolution for the winding up of the protected cell company or any part of the protected cell company;

• (e) a winding-up order may not be made against the protected cell company or any part of the protected cell company;

• (f) the estate of a protected cell company or any part of a protected cell company may not be sequestrated under section 6 of the Bankruptcy (Scotland) Act 2016;

• (g) neither the protected cell company nor a part of the protected cell company may be subject to any other process under the insolvency legislation which applies to a person who is insolvent or who is likely to become insolvent .

• (2) The reference in paragraph (1)(d) to winding up includes a reference to a members' voluntary winding up under Chapter 3 of Part 4 of the Insolvency Act 1986 or Chapter 3 of Part 5 of the Insolvency (Northern Ireland) Order 1989.

CHAPTER 16 — Mergers and Divisions

Meaning of “transfer scheme”, “transferor” and “transferee”

170

• (1) A scheme is a transfer scheme for the purposes of this Chapter if it falls within Case 1, 2 or 3.

• (2) Case 1 is that the scheme results in the transfer of one or more cells from one protected cell company to another protected cell company.

• (3) Case 2 is that the scheme results in the transfer of the following from a protected cell company to another person—

• (a) all of the assets held by the protected cell company on behalf of a cell;

• (b) all of the liabilities incurred by the protected cell company on behalf of that cell;

• (c) all of the liabilities of the protected cell company which are attributable to the cell; and

• (d) all of the investments issued by the protected cell company on behalf of that cell;

and the scheme is not a Case 1 transfer scheme.

• (4) Case 3 is that the scheme results in the transfer of—

• (a) some or all of the assets of a person to a protected cell company, to be held by the protected cell company on behalf of a cell;

• (b) some or all of the liabilities of a person to the protected cell company, to be treated as liabilities incurred by the protected cell company on behalf of that cell; and

• (c) some or all of the investments issued by that person to the protected cell company, to be treated as investments issued by the protected cell company on behalf of that cell,

and the scheme is not a Case 1 transfer scheme.

• (5) In this Chapter—

• “the transferor” is the person transferring the cell, assets, liabilities or investments (as the case may be); and

• “the transferee” is the person to whom the cell, assets, liabilities or investments (as the case may be) are transferred.

Meaning of “reference date”

171

In this Chapter, the “reference date” means the date chosen by a person in accordance with paragraph (2) of regulation 173.

Meaning of “affected parties”

172

• (1) In this Chapter, “affected parties” means—

• (a) in a Case 1 transfer scheme—

• (i) the FCA;

• (ii) the PRA;

• (iii) an undertaking from whom the transferor has assumed a risk on behalf of a relevant cell;

• (iv) all investors holding investments issued by the transferor on behalf of a relevant cell;

• (v) any other person to whom the transferor has incurred a liability on behalf of a relevant cell; and

• (vi) so far as the transferor is aware, any other person to whom the transferor has incurred a liability which is attributable to a relevant cell;

• (b) in a Case 2 transfer scheme—

• (i) the FCA;

• (ii) the PRA;

• (iii) an undertaking from whom the transferor has assumed a risk on behalf of a relevant cell;

• (iv) all investors holding investments issued by the transferor on behalf of a relevant cell;

• (v) any other person to whom the transferor has incurred a liability on behalf of a relevant cell;

• (vi) so far as the transferor is aware, any other person to whom the transferor has incurred a liability which is attributable to a relevant cell; and

• (vii) any person to whom the transferee has a liability or to whom the transferee has issued an investment;

• (c) in a Case 3 transfer scheme—

• (i) the FCA;

• (ii) the PRA;

• (iii) any person to whom the transferor has a liability, or to whom the transferor has issued an investment, which is to be transferred to the transferee as a result of the transfer scheme;

• (iv) any undertaking from whom the transferee has assumed a risk on behalf of a relevant cell;

• (v) all investors holding investments issued by the transferee on behalf of a relevant cell;

• (vi) any other person to whom the transferee has incurred a liability on behalf of a relevant cell; and

• (vii) so far as the transferee is aware, any other person to whom the transferee has incurred a liability which is attributable to a relevant cell.

• (2) In this regulation, a “relevant cell” is the cell to which the transfer scheme relates and any other cell which has entered into enforceable arrangements with that cell.

Requirements on applicants

173

• (1) A person must comply with the following requirements before making an application under regulation 174 (fast track transfers) or regulation 175 (transfers sanctioned by court order).

• (2) The person who proposes to make the application must decide on a date (by virtue of regulation 171, this date is known as the “reference date”).

• (3) Within a period of 10 working days beginning with the reference date, a notice stating that the person proposes to make the application must be—

• (a) published—

• (i) in the London, Edinburgh and Belfast Gazettes;

• (ii) in two national newspapers in the United Kingdom; and

• (iii) in a national newspaper in each of the countries or territories in which a person who was an affected party on the reference date is located; and

• (b) sent to all the persons who were affected parties on the reference date.

• (4) The applicant must provide the following documents free of charge and without delay to the FCA, the PRA and any other person who requests them—

• (a) a statement setting out the terms of the proposed transfer scheme; and

• (b) a copy of the proposed application.

Application for fast track transfer

174

• (1) An application may be made to the FCA for a fast track transfer where—

• (a) the transfer scheme falls entirely within Case 1 or entirely within Case 2;

• (b) in the case of a transfer scheme falling within Case 2—

• (i) the transferee is a private company limited by shares and registered under the Companies Act 2006; and

• (ii) the directors of the transferee are permitted by the transferee's articles of association to do all the things necessary for the transferee to enter into and complete the transfer scheme;

• (c) the applicant has complied with the requirements of regulation 173;

• (d) all the affected parties have given their written consent to the transfer scheme;

• (e) the transferee has permission under Part 4A of FSMA to carry out the activity specified in article 13A of the Regulated Activities Order; and

• (f) the application is made before the end of a period of 30 working days beginning with the reference date.

• (2) The application may be made by—

• (a) the transferor;

• (b) the transferee;

• (c) if the core of the transferor is in administration or liquidation, the administrator or liquidator of the core; or

• (d) any combination of the above persons.

• (3) An application must be accompanied by—

• (a) a statement made by or on behalf of the transferor and transferee consenting to the transfer;

• (b) a statement made by the solicitor or counsel for the applicant verifying that the requirements of paragraph (1) are satisfied in relation to the transfer scheme; and

• (c) a statement made by the solicitor or counsel for the applicant setting out the changes which will need to be made to the information contained on the FCA's register as a result of the transfer scheme or, if no such changes are required, stating that fact.

• (4) Where the FCA considers that the application complies with the requirements of this regulation, the FCA must—

• (a) register the application; and

• (b) notify the applicant and the PRA accordingly.

• (5) For the purposes of deciding whether the application complies with the requirements of this regulation, the FCA may rely on the statement made by the solicitor or counsel for the applicant in accordance with paragraph (3)(b).

• (6) The notification under paragraph (4)(b) must state the time and date when the application was registered.

• (7) When the applicant receives notification under paragraph (4)(b), the applicant must do the following without delay—

• (a) inform the transferor (except where applicant is the transferor);

• (b) inform the transferee (except where the applicant is the transferee);

• (c) publish a notice confirming that the transfer scheme has taken effect in—

• (i) the London, Edinburgh and Belfast Gazettes;

• (ii) two national newspapers in the United Kingdom; and

• (iii) a national newspaper in each of the countries or territories in which a person who was an affected party on the reference date is located; and

• (d) send a notice confirming that the transfer scheme has taken effect to—

• (i) all the persons who were affected parties on the reference date; and

• (ii) if the applicant is aware that any other person has become an affected party since the reference date, that other person.

• (8) The notice referred to in sub-paragraphs (c) and (d) of paragraph (7) must state the time and date when the transfer scheme was registered.

Application for court order sanctioning transfer scheme

175

• (1) An application may be made to the court for an order sanctioning a transfer scheme.

• (2) An application may be made by—

• (a) the transferor;

• (b) the transferee;

• (c) where the transferor is a protected cell company and the core of the protected cell company is in administration or liquidation, the administrator or liquidator; or

• (d) any combination of the above persons.

• (3) “Court” means—

• (a) the High Court; or

• (b) in Scotland, the Court of Session.

• (4) The following are entitled to be heard on an application—

• (a) the FCA;

• (b) the PRA; and

• (c) any person who alleges that they would be adversely affected by the transfer scheme.

• (5) The court may make an order sanctioning a transfer scheme provided it is appropriate to sanction the scheme in all the circumstances of the case.

• (6) The court may not determine an application—

• (a) where the applicant has failed to comply with the requirements in paragraphs (3) and (4) of regulation 173; and

• (b) until after the end of a period of 15 working days beginning with the day the FCA and PRA were given the documents mentioned in paragraph (4) of regulation 173 (or if the FCA and PRA were given the documents on different dates, the later of the two dates).

• (7) But the court may waive the requirements of the following provisions in such circumstances and subject to such conditions as the court considers appropriate—

• (a) sub-paragraphs (ii) and (iii) of regulation 173(3)(a); and

• (b) paragraph (4) of regulation 173 in relation to any person other than the FCA and the PRA.

Effect of fast track transfer

176

• (1) A transfer scheme falling within regulation 174 takes effect on its registration by the FCA in accordance with paragraph (4)(a) of that regulation.

• (2) Where the transfer scheme falls within Case 1, the following occur as a result of registration—

• (a) the cell ceases to be a part of the transferor (and in relation to the transferor is deemed to be dissolved);

• (b) the cell becomes a part of the transferee (and in relation to the transferee is deemed to be created);

• (c) all of the assets held by the transferor on behalf of the cell are vested in the transferee and are deemed to be held by the transferee on behalf of the cell;

• (d) all of the liabilities or obligations incurred by the transferor on behalf of the cell become liabilities or obligations of the transferee and are deemed to be liabilities or obligations incurred by the transferee on behalf of the cell;

• (e) all of the liabilities or obligations of the transferor which are attributable to the cell become liabilities or obligations of the transferee and are deemed to be liabilities or obligations attributable to the cell;

• (f) where the transferor has, on behalf of the cell, entered into a contract with the transferee then, to the extent that the transferor was acting on behalf of the cell, regulation 74 applies to the contract after the transfer with the following modifications—

• (i) the contract is to be treated as if it were made between the cell and the part of the transferee on whose behalf the transferee was acting when it entered into the contract; and

• (ii) for the purposes of determining whether the requirements of regulation 69 or, where applicable, regulation 70 are satisfied in relation to the contract, the contract is to be treated as if it were made on the registration of the transfer scheme by the FCA;

• (g) where the transferor has, on behalf of the cell, entered into a contract with a person who is not the transferee then, to the extent that the transferor was acting on behalf of the cell, the contract is deemed to be novated to the transferee so that references to the transferor in the contract are (unless the context otherwise requires) read after the transfer as references to the transferee;

• (h) where the cell has entered into enforceable arrangements with another cell of the transferor, then—

• (i) where both cells are being transferred to the transferee at the same time, the enforceable arrangements take effect after the transfer as enforceable arrangements made between those cells by the transferee in accordance with these Regulations;

• (ii) in all other cases, the arrangements take effect after the transfer as if the terms of the arrangements are set out in a contract made between—

• (aa) the protected cell company on behalf of the other cell; and

• (bb) the transferee on behalf of the cell being transferred;

• (i) all of the investments issued by the transferor on behalf of the cell are deemed to be investments issued by the transferee on behalf of the cell;

• (j) where the investments concerned are shares, they are deemed to have been issued and allotted by the transferee in accordance with the requirements of this Part;

• (k) things done by the transferor on behalf of the cell are deemed to have been done by the transferee on behalf of the cell; and

• (l) things done to the transferor in respect of the cell are deemed to have been done to the transferee in respect of the cell.

• (3) Where the transfer scheme falls within Case 2, then the following occur as a result of registration—

• (a) all of the assets held by the transferor on behalf of the cell are vested in the transferee;

• (b) all of the liabilities or obligations incurred by the transferor on behalf of the cell become liabilities or obligations of the transferee;

• (c) all of the liabilities or obligations of the transferor which are attributable to the cell become liabilities or obligations of the transferee;

• (d) where the transferor has entered into a contract with the transferee on behalf of the cell then, to the extent that the transferor was acting on behalf of the cell, the terms of the contract cease to have effect after the transfer;

• (e) where the transferor has, on behalf of the cell, entered into a contract with a person who is not the transferee then, to the extent that the transferor was acting on behalf of the cell, the contract is deemed to be novated to the transferee so that references to the transferor in the contract are (unless the context otherwise requires) read after the transfer as references to the transferee;

• (f) where the cell has entered into enforceable arrangements with another cell of the transferor, those arrangements take effect after the transfer as if the terms of the arrangements are set out in a contract made between the protected cell company on behalf of the other cell and the transferee;

• (g) all of the investments issued by the transferor on behalf of the cell are deemed to be investments issued by the transferee;

• (h) things done by the transferor on behalf of the cell are deemed to have been done by the transferee;

• (i) things done to the transferor in respect of the cell are deemed to have been done to the transferee; and

• (j) the cell is deemed to be dissolved.

• (4) Where the investments referred to in paragraph (3)(g) are shares, then Chapter 3 (allotment of equity securities: existing shareholders' right of pre-emption) and Chapter 5 (payment for shares) of Part 17 (a company's share capital) of the Companies Act 2006 do not apply to the transferee in relation to the transfer of the shares.

• (5) Where property or a liability transferred in accordance with this regulation is governed by the law of any country or territory outside the United Kingdom, then the transferor must, if the transferee so requires, take all necessary steps for securing that the transfer is fully effective under the law of that country or territory.

• (6) Registration of a transfer scheme in accordance with regulation 174 is to be treated as an instrument of transfer for the purposes of any enactment requiring the delivery of an instrument of transfer for the registration of property.

Effect of court order sanctioning transfer scheme

177

• (1) If the court makes an order under regulation 175, it may by that or any subsequent order make such provision (if any) as it thinks fit—

• (a) for the transfer to the transferee of a cell forming part of the transferor;

• (b) for the transfer to the transferee of any property, liabilities or obligations of the transferor;

• (c) for the allotment or appropriation by the transferee of any shares or debentures issued by the transferor;

• (d) for the continuation by or against the transferee of any pending legal proceedings by or against the transferor;

• (e) for dealing with the interests of any person who, within such time and in such manner as the court may direct, objects to the transfer scheme;

• (f) for bringing the order to the attention of any person;

• (g) with respect to such incidental, consequential and supplementary matters as are, in its opinion, necessary to secure that the transfer scheme is fully and effectively carried out.

• (2) Where the court makes an order under paragraph (1) in respect of a protected cell company, the order may specify the part of the protected cell company to which the order relates.

• (3) An order under paragraph (1) may—

• (a) transfer property or liabilities whether or not the transferor otherwise has the capacity to effect the transfer in question;

• (b) make provision in relation to property which is held by the transferor as trustee;

• (c) make provision in relation to enforceable arrangements between cells;

• (d) make provision as to prospective or contingent rights or liabilities of the transferor, including provision as to the construction of instruments under which such rights or liabilities arise.

• (4) Paragraph (3)(a) is to be taken to include the power to make the following provision in an order—

• (a) for the transfer of property or liabilities which would not otherwise be capable of being transferred or assigned;

• (b) if the terms on which the transferor is entitled to property or is subject to liabilities include provision that has any of the effects specified in paragraph (5), for the transfer to take effect as if there were no such provision.

• (5) The effects mentioned in paragraph (4)(b) are that a transfer of the property or liability in question—

• (a) requires a person's consent or concurrence; or

• (b) contravenes or interferes with an interest or right, or otherwise incurs a liability.

• (6) Nothing in paragraph (4) is to be read as limiting the scope of paragraph (3).

• (7) If an order under paragraph (1) transfers a cell from the transferor to transferee, then the order has the effect specified in paragraph (2) of regulation 176, except to the extent that the order provides otherwise.

• (8) If an order under paragraph (1) makes provision for the transfer of property, liabilities or obligations, then the following occur as a result of the order—

• (a) the property is transferred to and vests in the transferee specified in the order; and

• (b) the liabilities or obligations are transferred to and become liabilities or obligations of the transferee specified in the order.

• (9) But if any property or liability included in an order under paragraph (1) is governed by the law of any country or territory outside the United Kingdom, the order may require the transferor, if the transferee so requires, to take all necessary steps for securing that the transfer is fully effective under the law of that country or territory.

• (10) Property transferred as a result of an order under paragraph (1) may, if the court so directs, vest free from any charge (or, in Scotland, security over property) which is (as a result of the transfer scheme) to cease to have effect.

• (11) An order under paragraph (1) which makes provision for the transfer of property is to be treated as an instrument of transfer for the purposes of any enactment requiring the delivery of an instrument of transfer for the registration of property.

• (12) The transferee must provide the FCA and PRA with two office copies of an order made under regulation 175 or 177 before the end of a period of 10 working days beginning with the making of the order, or such longer period as the FCA or PRA (as the case may be) directs.

CHAPTER 17 — Dissolution

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 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.

Dissolution of a cell: effect on property and liabilities

179

• (1) Where a cell of a protected cell company is dissolved in accordance with regulation 178—

• (a) the protected cell company is released from all outstanding liabilities and obligations which were incurred on behalf of the cell or which are attributable to the cell;

• (b) any enforceable arrangements made between the cell and any other cell are deemed to be cancelled; and

• (c) any property of the protected cell company which is held on behalf of the cell is deemed to be moved to the core.

• (2) A resolution of the protected cell company for the dissolution of a cell is to be treated as an instrument of transfer for the purposes of any enactment requiring the delivery of an instrument of transfer for the registration of property.

• (3) Paragraph (1) is subject to regulations 181 to 185 (which are concerned with restoration).

Dissolution of a protected cell company

180

• (1) A protected cell company may be dissolved in the following cases—

• (a) the protected cell company makes an application to the FCA for its dissolution;

• (b) the core of the protected cell company is put into administration and the protected cell company is 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 167);

• (c) the core of the protected cell company is put into liquidation and the protected cell company is dissolved after winding up (see sections 202 to 205 of the Insolvency Act 1986 and Articles 167 to 169 of the Insolvency (Northern Ireland) Order 1989 as applied by regulation 167).

• (2) But a protected cell company may only be dissolved if the protected cell company has no cells.

• (3) Where a protected cell company applies to the FCA for its dissolution, the application must contain, or be accompanied by, a statement made by the directors of the protected cell company, or by a majority of them, that the protected cell company has no cells.

• (4) Where the FCA receives an application made under paragraph (1)(a) which contains, or is accompanied by, the statement referred to in paragraph (3), the FCA must publish a notice in the London, Edinburgh and Belfast Gazettes—

• (a) identifying the protected cell company;

• (b) stating that the FCA has received an application from the protected cell company for its dissolution; and

• (c) inviting any person to show cause as to why the protected cell company should not be dissolved.

• (5) On the expiry of a period of three months beginning with the date that the notice referred to in paragraph (4) was published in the London, Edinburgh and Belfast Gazettes, or the last such date if the notices are published on different dates, the FCA may—

• (a) notify the protected cell company that it intends to strike the protected cell company off the register;

• (b) record on its register of protected cell companies that the protected cell company is struck off the register; and

• (c) publish notice to that effect in the London, Edinburgh and Belfast Gazettes.

• (6) If the FCA is aware that the protected cell company intends to acquire or redeem shares issued on behalf of the core, the FCA may postpone publication of the notices referred to in paragraph (5)(c) for such period as appears to the FCA to be reasonable.

• (7) On the publication of the notices referred to in paragraph (5)(c), or the last such notice if the notices are published on different dates, the protected cell company is dissolved.

• (8) However—

• (a) the liability (if any) of every director of the protected cell company continues and may be enforced as if the protected cell company had not been dissolved; and

• (b) nothing in this regulation affects the power of the court to wind up the core or a cell of the protected cell company which has been struck off the register.

• (9) All property and rights whatsoever vested in or held on trust for the protected cell company immediately before its dissolution (including leasehold property, but not including property held on trust for another person) are deemed to be bona vacantia.

• (10) Sections 1012 to 1023 of the Companies Act 2006 (property of dissolved company) apply to all such property and rights as they apply to the property and rights of a company incorporated under the Companies Act 2006, with the following modifications—

• (a) references to the restoration of the company are to be treated as references to the restoration of the protected cell company; and

• (b) references to the registrar are to be treated as references to the FCA.

Restoration: applications to court

181

• (1) Where a cell of a protected cell company has been dissolved, an application may be made to the court to restore the cell.

• (2) Where a protected cell company has been dissolved, an application may be made to the court to restore the protected cell company to the register.

• (3) Where an application is made to restore a cell of a protected cell company and the protected cell company has been dissolved, then the application must be accompanied by an application to restore the protected cell company to the register.

• (4) In this regulation, “court” means the High Court or, in Scotland, the Court of Session.

Restoration: who may apply

182

• (1) An application under regulation 181(1) may be made by—

• (a) any person who would have been entitled to receive notice of the cell's dissolution under regulation 178(2);

• (b) the protected cell company;

• (c) a director of the protected cell company;

• (d) a former administrator or liquidator of the cell; or

• (e) any other person appearing to have an interest in the matter.

• (2) An application under regulation 181(2) may be made by—

• (a) a person who is entitled to make an application under regulation 181(1) for the restoration of a cell which formed part of the protected cell company;

• (b) a former director of the protected cell company;

• (c) a person who would, but for the dissolution of the protected cell company, have been—

• (i) a creditor of the protected cell company; or

• (ii) in a contractual relationship with the protected cell company;

• (d) a person with a potential legal claim against the protected cell company;

• (e) a person having an interest in land or other property—

• (i) in which the protected cell company had a superior or derivative interest;

• (ii) that was subject to rights vested in the protected cell company; or

• (iii) that received the benefit of obligations owed by the protected cell company;

• (f) a person who held shares issued on behalf of the core of the protected cell company immediately prior to the dissolution of the protected cell company;

• (g) a former administrator or liquidator of the core of the protected cell company;

• (h) the FCA;

• (i) the PRA; or

• (j) any other person appearing to have an interest in the matter.

Restoration: when an application may be made

183

An application to restore a cell or a protected cell company must be made within a period of six years beginning with the date when the cell or protected cell company (as the case may be) was dissolved.

Decision on application for restoration

184

• (1) On an application under regulation 181(1), the court may order the restoration of a cell if—

• (a) the requirements of regulation 178 were not complied with in relation to the dissolution of the cell; or

• (b) the court considers it just to do so.

• (2) On an application under regulation 181(2), the court may order the restoration of a protected cell company if—

• (a) the requirements of regulation 180 were not complied with in relation to the dissolution of the protected cell company; or

• (b) the court considers it just to do so.

• (3) If the court orders the restoration of the cell or the protected cell company, the restoration takes effect on a copy of the court's order being delivered to the FCA.

• (4) Where a protected cell company is restored to the register, the FCA must publish notice of the restoration of the protected cell company in the London, Edinburgh and Belfast Gazettes.

• (5) The notices must state—

• (a) the name of the protected cell company;

• (b) the protected cell company's registered number; and

• (c) the date on which restoration took effect.

Effect of court order for restoration

185

• (1) The general effect of an order restoring a cell or a protected cell company is that the cell or protected cell company (as the case may be) is deemed to have continued in existence as if it had not been dissolved.

• (2) The court may give directions and make such provision as seems just for placing the cell or protected cell company and all other persons in the same position (as nearly as may be) as if the cell or protected cell company had not been dissolved.

• (3) In particular, the court may give directions as to—

• (a) the delivery of documents to the FCA or PRA;

• (b) payment of the FCA's or PRA's costs in relation to the proceedings for restoration;

• (c) where property or a right previously vested in or held on trust for the protected cell company has vested as bona vacantia, the payment of the costs (in Scotland, the expenses) of the Crown representative—

• (i) in dealing with the property during the period of dissolution; or

• (ii) in connection with the proceedings on the application.

• (4) In this regulation, the “Crown representative” means—

• (a) in relation to property vested in the Duchy of Lancaster, the Solicitor to that Duchy;

• (b) in relation to property vested in the Duke of Cornwall, the Solicitor to the Duchy of Cornwall;

• (c) in relation to property in Scotland, the Queen's and Lord Treasurer's Remembrancer;

• (d) in relation to other property, the Treasury Solicitor.

• (5) Section 1034 of the Companies Act 2006 (effect of restoration where property has vested as bona vacantia) applies on the restoration of a protected cell company as it applies on the restoration of a company incorporated under the Companies Act 2006, but with the reference to section 1012 in subsection (1) being treated as a reference to regulation 180(9).

CHAPTER 18 — Offences

Offences by a body corporate

186

Section 400 of FSMA (offences by bodies corporate etc) applies to an offence under these Regulations as it applies to an offence under FSMA.

Jurisdiction and procedure in respect of offences

187

Section 403 of FSMA (jurisdiction and procedure in respect of offences) applies to an offence under these Regulations as it applies to an offence under FSMA.

CHAPTER 19 — Miscellaneous

Time period for giving notice to FCA

188

• (1) Where a provision of this Part requires a protected cell company to give notice of an event to the FCA, the notice must be given to the FCA within a period of 10 working days beginning with the day the event occurred.

• (2) Paragraph (1) does not apply where a provision of this Part specifies a different period.

Imposition of further requirements by the FCA or PRA

189

Nothing in this Part is to be taken as preventing or restricting the FCA or PRA from imposing further requirements on a protected cell company in accordance with the powers conferred on the FCA or PRA by or under FSMA.

Consequential amendments to legislation

190

Schedule 4 has effect.

Transitional provision: existing companies registered under the Companies Act 2006

191

The amendment made to paragraph (3) of Schedule 2 to the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 by paragraph 7 of Part 2 of Schedule 4 to these Regulations does not apply in relation to a company which was registered under the Companies Act 2006 before the coming into force of these Regulations.

SCHEDULE 1 — Welsh equivalents of English words and expressions

English	Welsh
and company	a'r cwmni / a chwmni / a'I gwmni
company	cwmni
company limited	cwmni cyfyngedig
insurance	yswiriant
insured	wedi'i yswirio
insurer	yswiriwr
limited	cyfyngedig
PCC	CUG
PCC Limited	CUG Cyfyngedig
PCC Ltd	CUG Cyf
protected cell company	cwmni unedau gwarchodedig
public limited company	cwmni cyfyngedig cyhoeddus
reinsurance	ailyswiriant
reinsured	wedi'i ailyswirio
reinsurer	ailyswiriwr
unlimited	anghyfyngedig

SCHEDULE 2 — Administration and liquidation of cells: modification of insolvency legislation

Duties and powers confined to the cell

1

• (1) The appointment of a relevant office holder in respect of a cell, and the powers and duties of the relevant office holder, are confined to—

• (a) the cell;

• (b) the business and affairs of the cell; and

• (c) the property held by the protected cell company on behalf of the cell.

• (2) In sub-paragraph (1), a “relevant office holder” means—

• (a) an administrator;

• (b) a liquidator;

• (c) a provisional liquidator; or

• (d) a special manager.

General application of the insolvency legislation

2

The insolvency legislation applies to a cell as if—

• (a) the cell is a body corporate with distinct legal personality;

• (b) the cell was incorporated on its creation;

• (c) the cell is registered in the part of the United Kingdom in which the protected cell company has its registered office;

• (d) the registered office of the cell is the registered office of the protected cell company;

• (e) the registered name of the cell is the name or number of the cell followed by “of” and the name of the protected cell company;

• (f) the registrar of companies is the FCA;

• (g) a person who is or was a director, shadow director, officer, employee or agent of the protected cell company is or was a director, shadow director, officer, employee or agent of the cell (as the case may be);

• (h) shares issued by the protected cell company on behalf of the cell are shares issued by the cell;

• (i) the cell's property, assets, liabilities, debts and creditors are determined in accordance with regulation 48(6);

• (j) arrangements made between the cell and another cell in accordance with regulations 68 and 69 are contracts entered into between the cell and the protected cell company acting on behalf of that other cell;

• (k) things done by the protected cell company on behalf of the cell are things done by the cell;

• (l) things done to the protected cell company in respect of the cell are things done to the cell;

• (m) judgments or orders made against the protected cell company in respect of the cell are judgments or orders made against the cell;

• (n) the books, papers, records, registers and other documents of the protected cell company are, insofar as they relate to the cell, books, papers, records, registers and documents of the cell; and

• (o) an associate of the protected cell company (within the meaning given by section 435 of the Insolvency Act 1986 or Article 4 of the Insolvency (Northern Ireland) Order 1989) is an associate of the cell.

Jurisdiction within the United Kingdom

3

• (1) This paragraph specifies which court in the United Kingdom has jurisdiction in relation to the administration or winding up of a cell of a protected cell company.

• (2) Her Majesty's High Court of Justice in England has jurisdiction where the registered office of a protected cell company is located in England and Wales (or Wales).

• (3) The Court of Session has jurisdiction where the registered office of a protected cell company is located in Scotland.

• (4) Her Majesty's High Court of Justice in Northern Ireland has jurisdiction where the registered office of a protected cell company is located in Northern Ireland.

Restrictions on applying for winding up

4

A person holding an investment issued on behalf of any cell of a protected cell company may not apply for—

• (a) the winding up of a cell; or

• (b) the appointment of a provisional liquidator in respect of a cell.

Appointment of administrator

5

• (1) Only the court may appoint an administrator of a cell.

• (2) Where a person makes an application to court for the administration of a cell, the person must file with the court notice of the existence of any insolvency proceedings in relation to the protected cell company or the cell anywhere in the world as soon as the person becomes aware of them.

• (3) The duty imposed by sub-paragraph (2) ceases on the making of an administration order.

Giving of notice

6

In the insolvency legislation—

• (a) a requirement that a company give notice of, or file, something is to be treated as a requirement that the protected cell company give notice of, or file, that thing on behalf of the cell; and

• (b) any requirement to give notice of something on the company's website is to be ignored.

Part 24 of FSMA: references to “regulated activities” and “PRA-authorised person”

7

If the protected cell company has (or had) permission to carry on a regulated activity under Part 4A (permission to carry on regulated activities) of FSMA, then Part 24 (insolvency) of FSMA applies to the cell as if the cell has (or had) that permission.

Further modifications to specific provisions of the Insolvency Act 1986 and the Insolvency (Northern Ireland) Order 1989

8

• (1) The provisions of the Insolvency Act 1986 specified in the first column of Table 7 and the provisions of the Insolvency (Northern Ireland) Order 1989 specified in the second column of Table 7 apply to a cell with the modifications specified in the fourth column of Table 7.

Insolvency Act 1986	Insolvency (Northern Ireland) Order 1989	Subject Matter	Modification
Section 76	Article 63	Liability of past directors and shareholders	These provisions apply where a protected cell company has made a payment (“the relevant payment” for the purposes of these provisions) to redeem or acquire shares issued on behalf of the cell in breach of the requirements of regulation 106.
Section 76	Article 63	Liability of past directors and shareholders	The reference to the directors who signed the statement made in accordance with section 714(1) to (3) of the Companies Act 2006 for the purposes of the redemption or purchase is to be treated as a reference to the directors who authorised the redemption or purchase.
Section 103	Article 89	Cesser of directors' powers	Ignore these provisions.
Section 124	Article 104	Application for winding up	An administrator of the cell, or an administrator or liquidator of the core, may also present a petition for the winding up of a cell.
Section 216	Article 180	Restriction on re-use of names	Ignore these provisions.
Section 221	Article 185	Winding up of unregistered companies	Where an administrator or liquidator of the core of the protected cell company applies for the winding up of a cell, the cell may be wound up if the court is satisfied that the application is made in the discharge of the duty imposed on the administrator or liquidator by paragraph 2(2)(c) of Schedule 3 to these Regulations in relation to the cell.
Section 222	Article 186	Inability to pay debts: unpaid creditor for £750 or more	The written demand must be served on the cell by leaving it at the protected cell company's registered office or in such manner as the court may approve or direct.
Section 223	Article 187	Inability to pay debts: debt remaining unsatisfied after action brought	Ignore these provisions.
Paragraph 61 of Schedule B1	Paragraph 62 of Schedule B1	Administrator's general powers (removal and appointment of directors)	Ignore these paragraphs.
Paragraph 69 of Schedule B1	Paragraph 70 of Schedule B1	Administrator as agent	An administrator of a cell acts as agent for the protected cell company (on behalf of the cell).
Paragraph 83 of Schedule B1	Paragraph 84 of Schedule B1	Moving from administration to liquidation	Ignore these paragraphs.

Further modification to subordinate legislation

9

The provisions of any subordinate legislation made under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 apply to the cell with any necessary modifications.

SCHEDULE 3 — Administration and liquidation of the core: modification of insolvency legislation

Meaning of “relevant office holder”

1

In this Schedule, “relevant office holder” means—

• (a) an administrator;

• (b) a liquidator;

• (c) a provisional liquidator; or

• (d) a special manager.

Duties and powers of a relevant office holder appointed in respect of the core

2

• (1) The appointment of a relevant office holder in respect of the core, and the powers and duties of the relevant office holder, are confined to—

• (a) the core;

• (b) the business and affairs of the core; and

• (c) the property held by the protected cell company on behalf of the core,

except to the extent that sub-paragraphs (2) to (8) provide otherwise.

• (2) An administrator or liquidator appointed in respect of the core of a protected cell company has the following duties in relation to a cell of the protected cell company which is not in administration or liquidation—

• (a) a duty to ensure the protected cell company dissolves the cell in accordance with regulation 178;

• (b) if the administrator or liquidator considers that there is no realistic prospect of being able to carry out the duty referred to in sub-paragraph (a) in respect of the cell, a duty to enter into a transfer scheme in respect of the cell, or the assets and liabilities held by the protected cell company on behalf of the cell and the investments issued on the cell's behalf; or

• (c) if the administrator or liquidator considers that there is no realistic prospect of being able to carry out the duties referred to in sub-paragraphs (a) and (b) in respect of the cell, a duty to apply to the court for a winding-up order in respect of the cell.

• (3) But sub-paragraph (2) does not apply where—

• (a) the core of a protected cell company is in administration;

• (b) an objective of the administration is to rescue the core as a going concern; and

• (c) the administrator thinks that it is reasonably practicable to achieve that objective.

• (4) An administrator or liquidator appointed in respect of the core of a protected cell company may exercise the powers mentioned in sub-paragraph (5)—

• (a) in relation to a cell of the protected cell company which is not in administration or liquidation; or

• (b) in relation to a cell of the protected cell company which is in administration or liquidation provided the administrator or liquidator of the cell consents to the exercise of the power.

• (5) The powers referred to in sub-paragraph (4) are—

• (a) a power to fulfil a requirement imposed on the protected cell company by an enactment;

• (b) a power to fulfil an obligation incurred by the protected cell company on behalf of a cell or which is attributable to a cell;

• (c) a power to enter into a transfer scheme in respect of a cell, or the assets and liabilities held by the protected cell company on behalf of the cell and the investments issued on the cell's behalf;

• (d) a power to apply to court for a winding-up order in respect of a cell;

• (e) a power to dissolve a cell in accordance with regulation 178;

• (f) a power to do anything necessary or expedient to comply with a duty imposed on the administrator or liquidator by sub-paragraph (2).

• (6) Where a protected cell company has no cells, an administrator or liquidator of the core also has the power to dissolve the protected cell company in accordance with regulation 180.

• (7) Where this paragraph imposes a duty, or confers a power, on an administrator or liquidator, that duty or power is to be treated as if it were imposed or conferred on the administrator or liquidator by—

• (a) the Insolvency Act 1986 where the protected cell company has its registered office in England and Wales (or Wales) or Scotland;

• (b) the Insolvency (Northern Ireland) Order 1989 where the protected cell company has its registered office in Northern Ireland.

• (8) In this paragraph, “transfer scheme” means a transfer scheme within the meaning given by regulation 170.

General application of the insolvency legislation

3

The insolvency legislation applies to the core as if—

• (a) the core is a body corporate with distinct legal personality;

• (b) the core was incorporated when the protected cell company was incorporated;

• (c) the core is registered in the part of the United Kingdom in which the protected cell company has its registered office;

• (d) the registered office of the cell is the registered office of the protected cell company;

• (e) the registered name of the core is “the core of” followed by the name of the protected cell company;

• (f) the registrar of companies is the FCA;

• (g) a person who is or was a director, shadow director, officer, employee or agent of the protected cell company is or was a director, shadow director, officer, employee or agent of the core (as the case may be);

• (h) shares issued by the protected cell company on behalf of the core are shares issued by the core;

• (i) the core's property, assets, liabilities, debts and creditors are determined in accordance with regulation 48(6);

• (j) things done by the protected cell company on behalf of the core are things done by the core;

• (k) things done to the protected cell company in respect of the core are things done to the core;

• (l) judgments or orders made against the protected cell company in respect of the core are judgments or orders made against the core;

• (m) the books, papers, records, registers and other documents of the protected cell company are, insofar as they relate to the core, books, papers, records, registers and documents of the core; and

• (n) an associate of the protected cell company (within the meaning given by section 435 of the Insolvency Act 1986 or Article 4 of the Insolvency (Northern Ireland) Order 1989) is an associate of the core.

Jurisdiction within the United Kingdom

4

• (1) This paragraph specifies which court in the United Kingdom has jurisdiction in relation to the administration or winding up of the core of a protected cell company.

• (2) Her Majesty's High Court of Justice in England has jurisdiction where the registered office of a protected cell company is located in England and Wales (or Wales).

• (3) The Court of Session has jurisdiction where the registered office of a protected cell company is located in Scotland.

• (4) Her Majesty's High Court of Justice in Northern Ireland has jurisdiction where the registered office of a protected cell company is located in Northern Ireland.

Restriction on applying for winding up

5

A person holding an investment issued on behalf of a cell of a protected cell company may not apply for—

• (a) the winding up of the core; or

• (b) the appointment of a provisional liquidator in respect of the core.

Appointment of administrator

6

• (1) Only the court may appoint an administrator of the core.

• (2) Where a person makes an application to court for the administration of the core, the person must file with the court notice of the existence of any insolvency proceedings in relation to the protected cell company or the core anywhere in the world as soon as the person becomes aware of them.

• (3) The duty imposed by sub-paragraph (2) ceases on the making of an administration order.

Giving notice

7

In the insolvency legislation, a requirement that a company give notice of, or file, something is to be treated as a requirement that the protected cell company give notice of, or file, that thing on behalf of the core.

Dissolution

8

References in the insolvency legislation to the dissolution of the company are to be treated as references to dissolution of the protected cell company, but a protected cell company may only be dissolved where the protected cell company has no cells.

Part 24 of FSMA: references to “regulated activities” and “PRA-authorised person”

9

If the protected cell company has (or had) permission to carry on a regulated activity under Part 4A (permission to carry on regulated activities) of FSMA, then Part 24 (insolvency) of FSMA applies to the core as if the core has (or had) that permission.

Further modification to specific provisions of the Insolvency Act 1986 and the Insolvency (Northern Ireland) Order 1989

10

• (1) The provisions of the Insolvency Act 1986 specified in the first column of Table 8 and the provisions of the Insolvency (Northern Ireland) Order 1989 specified in the second column of Table 8 apply to the core with the modifications specified in the fourth column of Table 8.

Insolvency Act 1986	Insolvency (Northern Ireland) Order 1989	Subject Matter	Modification
Section 76	Article 63	Liability of past directors and shareholders	These provisions apply where a protected cell company has made a payment (“the relevant payment” for the purposes of these provisions) to redeem or acquire shares issued on behalf of the core in breach of the requirements of regulation 107.
Section 76	Article 63	Liability of past directors and shareholders	The reference to the directors who signed the statement made in accordance with section 714(1) to (3) of the Companies Act 2006 for the purposes of the redemption or purchase is to be treated as a reference to the directors who authorised the redemption or purchase.
Section 103	Article 89	Cesser of directors' powers	Ignore these provisions.
Section 124	Article 104	Application for winding up	An administrator of the core may also present a petition for the winding up of the core.
Section 216	Article 180	Restriction on re-use of names	Treat references to the name of the liquidating company as references to the name of the protected cell company.
Section 222	Article 186	Inability to pay debts: unpaid creditor for £750 or more	The written demand must be served on the core by leaving it at the protected cell company's registered office or in such manner as the court may approve or direct.
Section 223	Article 187	Inability to pay debts: debt remaining unsatisfied after action brought	Ignore these provisions.
Paragraph 45 of Schedule B1	Paragraph 46 of Schedule B1	Publicity	These paragraphs apply to all business documents issued by or on behalf of the protected cell company and all of the protected cell company's websites.
Paragraph 61 of Schedule B1	Paragraph 62 of Schedule B1	Administrator's general powers (removal and appointment of directors)	Ignore these paragraphs.
Paragraph 69 of Schedule B1	Paragraph 70 of Schedule B1	Administrator as agent	An administrator of the core acts as agent for the protected cell company (on behalf of the core).
Paragraph 74 of Schedule B1	Paragraph 75 of Schedule B1	Challenge to administrator's conduct	These paragraphs apply to a person who is a creditor or shareholder in respect of the core of the protected cell company or any cell of the protected cell company to which the administrator's powers extend.
Paragraph 75 of Schedule B1	Paragraph 76 of Schedule B1	Misfeasance	In sub-paragraphs (2) to (5), references to the company are to be treated as including, where appropriate, references to a cell of the protected cell company.
Paragraph 83 of Schedule B1	Paragraph 84 of Schedule B1	Moving from administration to liquidation	Ignore these paragraphs.
Paragraph 84 of Schedule B1	Paragraph 85 of Schedule B1	Moving from administration to dissolution	The notice given under sub-paragraph (1) must also state that the protected cell company has no cells.

Further modifications to subordinate legislation

11

• (1) The provisions of any subordinate legislation made under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 apply to the core with the following modifications.

• (2) Any provision of subordinate legislation prescribing the circumstances in which a person may act in the ways specified in section 216(3) of the Insolvency Act 1986 or Article 180(3) of the Insolvency (Northern Ireland) Order 1989 where the whole or substantially the whole of the business of a company is acquired from that company is to be ignored.

• (3) The provisions of the subordinate legislation apply with any other necessary modifications.

SCHEDULE 4 — Consequential amendments to legislation

PART 1 — Consequential amendments to primary legislation

Stock Transfer Act 1963

1

In the Stock Transfer Act 1963 , in section 1 (simplified transfer of securities), in subsection (4), after paragraph (f), insert—

(g) shares issued by a protected cell company within the meaning of Part 4 of the Risk Transformation Regulations 2017.

Stock Transfer Act (Northern Ireland) 1963

2

In the Stock Transfer Act (Northern Ireland) 1963 , in section 1 (simplified transfer of securities), in subsection (4), after paragraph (f), insert—

(g) shares issued by a protected cell company within the meaning of Part 4 of the Risk Transformation Regulations 2017.

Company Directors Disqualification Act 1986

3

In the Company Directors Disqualification Act 1986 , after section 22G (application of Act to further education bodies) , insert—