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The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021

Type Statutory-Instrument

Publication 2021-10-21

Last updated 2022-08-10

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Made: 21st October 2021

Laid before Parliament: 22nd October 2021

Coming into force: 12th November 2021

Before making these Rules, the Lord Chancellor consulted the committee existing for the purposes of section 413 of the Insolvency Act 1986.

PART 1 — Introductory Provisions

Citation

1

These Rules may be cited as the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021.

Commencement

2

These Rules come into force on 12th November 2021.

Extent

3

These Rules extend to England and Wales only.

Interpretation

4

(1) The following definitions apply to these Rules or may be seen at the places indicated—

Word or expression	Meaning
asset pool	together (a) the asset pool as defined in the Regulations and (b) any funds properly transferred into a relevant funds account following the commencement of the special administration
authenticate	to authenticate in accordance with rule 256
business address	the place where a person works
business day	any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of England and Wales or Scotland under or by virtue of the Banking and Financial Dealings Act 1971[^f00003]
contact details	a postal address, an email address or a telephone number through which a customer may be contacted
CPR	Civil Procedure Rules 1998[^f00004] and “CPR” followed by a Part or a rule number means the Part or rule with that number in those rules
customer	(a) user, which has the meaning set out in regulation 6, or (b) holder, which has the meaning set out in regulation 6
file with the court	deliver to the court for filing
the Gazette	the London Gazette
gazetted	advertised once in the Gazette
IP number	the number assigned to an office-holder as an insolvency practitioner by the Secretary of State
means of contacting	being able to contact that person specifically
practice direction	a direction as to the practice and procedure of any court within the scope of the CPR
prescribed part	has the same meaning as it does in section 176A(2)(a) of the IA 1986[^f00005] and the Insolvency Act 1986 (Prescribed Part) Order 2003[^f00006]
progress report	a report which complies with rule 87
registered number	has the meaning set out in section 1066 of the CA 2006[^f00007]
the registrar	an Insolvency and Companies Court Judge and unless the context otherwise requires includes a District Judge in a District Registry of the High Court
registrar of companies	the registrar of companies for England and Wales
the Regulations	the Payment and Electronic Money Institution Insolvency Regulations 2021[^f00008]
Payment Systems Regulator	the body established under section 40 of the Financial Services (Banking Reform) Act 2013[^f00009]	the body established under section 40 of the Financial Services (Banking Reform) Act 2013[^f00009]
requisitioned meeting	a meeting requested under paragraph 56(1)
shortfall claim	that part of a relevant funds claim which will not be met from the asset pool because of a shortfall in the amount available in the asset pool to settle relevant funds claims, including where the shortfall arises as a result of any deduction from the relevant funds of costs under rule 99 or amounts that the court orders be paid from the asset pool or from the relevant funds
standard contents	(a) in relation to a notice to be gazetted, the contents specified in rules 266 and 267, and (b) in relation to a notice to be advertised in any other way, the contents specified in rules 270 and 271
statement of concurrence	a statement, verified by a statement of truth, that that person concurs in the statement of affairs submitted by a nominated person
statement of truth	a statement of truth in accordance with CPR Part 22
witness statement	a witness statement verified by a statement of truth in accordance with CPR Part 22

(2) A fee or remuneration is charged when the work to which it relates is done.

(3) Reference to a notice or other document being given, delivered or sent under these Rules or in the Regulations shall be interpreted in accordance with Chapters 2 to 4 of Part 12 of these Rules.

(4) Expressions used both in these Rules and in the Regulations (including expressions used in the provisions of the IA 1986 applied by the Regulations) have, unless otherwise stated, the meaning set out in the Regulations.

(5) A reference to a numbered paragraph in these Rules shall, unless—

(a) it is a reference to a paragraph within the same Rule, or

(b) otherwise stated,

be to the paragraph so numbered in Schedule B1 to the IA 1986, as applied by regulation 37.

(6) A reference to a provision of the IA 1986, if that provision is listed in the Table in regulation 37, is a reference to that provision as applied and modified by the Regulations.

(7) A reference to a numbered regulation shall, unless otherwise stated, be to the regulation so numbered in the Regulations.

(8) For the purposes of these Rules:

(a) references to a customer, and

(b) references to relevant funds,

do not include a customer of, or relevant funds received by:

(i) a small payment institution, or

(ii) in the case of funds received for the execution of payment transactions that are not related to the issuance of electronic money, a small electronic money institution,

where the institution had not chosen to voluntarily safeguard the funds when it entered special administration.

(9) To the extent that a customer claims a shortfall as a creditor, that shortfall claim is to be treated as a debt owed to the customer by the institution arising before the institution entered special administration.

(10) A relevant funds claim which is held jointly by one or more customers shall be treated as a single relevant funds claim under these Rules.

Application of Rules

5

These Rules apply in respect of a special administration.

PART 2

Application for special administration order

Content of application

6

(1) An application for a special administration order must be made in writing and authenticated by the applicant.

(2) The application must state—

(a) the full name and registered number of the institution,

(b) any other trading names of the institution,

(d) the institution’s nominal capital and the amount of capital paid up,

(e) the address of the institution’s registered office,

(f) an email address for the institution,

(g) the identity of the person (or persons) nominated for appointment as administrator, and

(h) a statement setting out which of the grounds in regulation 9(1) the applicant is relying on in making the application.

Statement of proposed administrator

7

An application for a special administration order must be accompanied by a statement by the proposed administrator—

(a) specifying the name and business address of the person (or each person) proposed to be appointed,

(b) giving that person’s (or each person’s) consent to act,

(d) giving details of any prior professional relationship that the person (or any of them) has had with the institution.

Witness statement in support of application

8

(1) An application for a special administration order must be accompanied by a witness statement.

(2) If the application is made by—

(a) the institution or one of its directors, the witness statement must be made by one of its directors or the company secretary of the institution, stating that they make it on behalf of the institution or, as the case may be, on behalf of the directors,

(b) a creditor or a contributory of the institution, the witness statement must be made by a person acting under the authority of all the creditors, or, as the case may be, all the contributories, making the application,

(c) the FCA, the witness statement must identify the person making the statement and must include the capacity in which that person makes the statement and the basis for that person’s knowledge of the matters set out in the statement, or

(d) a combination of the persons listed in regulation 8(1)(a) to (e), the witness statement must be made by a person acting under the authority of all the applicants.

(3) The witness statement must—

(a) set out the reasons by which the applicant believes the ground in regulation 9(1) on which the application is based is satisfied,

(b) state the institution’s current financial position, specifying (to the best of the applicant’s knowledge and belief) the institution’s assets and liabilities, including contingent and prospective liabilities,

(d) specify the amount of relevant funds held by the institution to the best of the applicant’s knowledge and belief,

(e) specify how functions are going to be allocated where more than one person is to be appointed as administrator (stating in particular whether functions are to be exercisable jointly or by any or all of the persons appointed), and

(f) specify any other matters which the applicant thinks will assist the court in deciding whether to make the special administration order.

Filing of application

9

(1) The application and its accompanying documents must be filed with the court together with enough copies of the application and accompanying documents for service and proof of service under rule 10.

(2) The court must fix a venue for the hearing of the application.

(3) In fixing the venue the court must have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable, and

(b) the need for the institution’s representatives to be able to reach the venue in time for the hearing.

(4) Each of the copies filed—

(a) must have the seal of the court applied to it,

(b) must be endorsed with the date and time of filing, and

Service of application

10

(1) The application must be served on—

(a) the institution (if neither the institution nor its directors are the applicant),

(b) the person (or each of the persons) nominated for appointment as administrator,

(d) if there is in force for the institution a voluntary arrangement under Part 1 of the IA 1986, the supervisor of that arrangement.

(2) Service under paragraph (1) must be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 9.

(3) Service of the application must be effected by the applicant, or their solicitor, or by a person instructed by the applicant or the solicitor, as soon as is reasonably practicable before the hearing.

(4) Service must be effected as follows—

(a) on the institution (subject to paragraph (5)), by delivering the documents to its registered office, and

(b) on any other person (subject to paragraph (6)) by delivering the documents to that person’s proper address.

(5) If delivery to the institution’s registered office is not practicable, service may be effected by delivery to its last known principal place of business in England and Wales.

(6) For the purposes of paragraph (4)(b), a person’s proper address is any which that person has previously notified to the applicant as their address for service, but if no address has been notified, service may be effected by delivery to that person’s usual or last known address.

(7) Delivery or service of documents to any place or address under paragraph (4) or paragraph (5) may be made by leaving them there or by electronic delivery in accordance with rule 257, and where the document is sent electronically, it must be sent with a read receipt and the message shall be deemed to be delivered when the message is read.

Proof of service

11

(1) Service of the application must be verified by a witness statement specifying the date and time on which, and the manner in which, service was effected.

(2) The witness statement, with a sealed copy of the application exhibited to it, must be filed with the court—

(a) as soon as is reasonably practicable, and

(b) in any event, before the hearing of the application.

Further notification

12

As soon as is reasonably practicable after filing the application, the applicant must notify—

(a) any enforcement officer or other officer whom the applicant knows to be charged with effecting an execution or other legal process against the institution or its property,

(b) any person whom the applicant knows to have distrained against the institution or its property, and

The hearing

13

At the hearing of the application, any of the following may appear or be represented—

(a) the applicant,

(b) the institution,

(d) the person (or a person) nominated for appointment as administrator,

(e) any supervisor of a voluntary arrangement under Part 1 of the IA 1986,

(f) any person who has given notice to the FCA in respect of the institution under regulation 11(6),

(g) the FCA, and

(h) with the permission of the court, any other person who appears to have an interest.

The special administration order

14

If the court makes a special administration order, the order must state—

(a) the name and address of the applicant,

(b) the name, registered address and registered number of the institution to which the order refers,

(d) the name of any administrator appointed by the order,

(e) the date and time from which their appointment shall take effect,

(f) the terms for costs of the application, and

(g) any further particulars that the court thinks fit.

Costs

15

If the court makes a special administration order, the following are payable as an expense of the special administration—

(a) costs of the applicant, and

(b) any other costs allowed by the court.

Notice of special administration order

16

(1) If the court makes a special administration order, it must, as soon as is reasonably practicable, deliver 3 sealed copies to the applicant.

(2) The applicant must as soon as is reasonably practicable, deliver a sealed copy to—

(a) the administrator, and

(b) the FCA (if not the applicant).

(3) If the court makes an order under regulation 10(1)(d) or regulation 10(1)(f), it must give directions as to the persons to whom and how notice of that order is to be given.

PART 3 — Process of Special Administration

CHAPTER 1 — Notice of appointment and statement of affairs

Notification and advertisement of administrator’s appointment

17

(1) The notice of appointment under paragraph 46(2)(b) to be given by the administrator as soon as is reasonably practicable after appointment—

(a) must be gazetted, and

(b) may be advertised in such other manner as the administrator thinks fit.

(2) In addition to the standard contents, the notice must state that an administrator has been appointed and the date of the appointment.

(3) The administrator must as soon as is practicable after appointment give notice of the appointment to—

(a) any enforcement officer who, to the administrator’s knowledge, is charged with execution or other legal process against the institution,

(b) any person who, to the administrator’s knowledge, has distrained against the institution, and

(4) The administrator shall send the notice of appointment to the registrar of companies within seven days of the date of the order appointing them.

(5) Any notice required to be sent by the administrator under these Rules or under Schedule B1 must—

(a) contain details of the court where the proceedings are and the relevant court reference number,

(b) contain the full name, registered address, registered number, all trading names and principal trading office of the institution,

(c) contain the name, business address and IP number of the person or persons appointed as administrator and the date of their appointment, and

(d) be authenticated and dated by the administrator.

Notice requiring statement of affairs

18

(1) In this Part, “relevant person” has the meaning given to it in paragraph 47(3) and “nominated person” is the relevant person who has been required by the administrator to make out and deliver a statement of affairs to the administrator.

(2) The administrator must deliver notice to each relevant person who the administrator deems appropriate requiring that relevant person to make out and deliver a statement of the institution’s affairs.

(3) The notice must be headed “notice requiring statement of affairs” and must inform each of the nominated persons—

(a) that the proceedings are being held in the court and the court reference number,

(b) of the full name, registered address and registered number of the institution,

(d) of the name and addresses of all others (if any) to whom the same notice has been sent,

(e) of the date by which the statement must be delivered to the administrator, being before the end of the period of eleven days beginning with the day on which the nominated person receives notice of the requirement,

(f) of the effect of paragraph 48(4), and

(g) of the application to that nominated person, and to each other relevant person, of section 235 of the IA 1986[^f00010].

(4) The administrator must, on request, provide details to the nominated person as to how the statement should be prepared.

Statement of affairs: content

19

(1) The statement of the institution’s affairs must be headed “Statement of affairs” and must—

(a) identify the institution immediately below the heading, and

(b) state that it is a statement of the affairs of the institution on a specified date, being the date on which it entered special administration.

(2) The statement of affairs must contain (in addition to the matters required by paragraph 47(2))—

(a) a summary of the assets of the institution, setting out the book value and the estimated realisable value of—

(i) any assets subject to a fixed charge,

(ii) any assets subject to a floating charge,

(iii) any uncharged assets, and

(iv) the total value of all the assets available for preferential creditors,

(b) a summary of the liabilities of the institution, setting out—

(i) the amount of preferential debts,

(ii) an estimate of the deficiency with respect to preferential debts or the surplus available after paying the preferential debts,

(iii) an estimate of the prescribed part, if applicable,

(iv) an estimate of the total assets available to pay debts secured by floating charges,

(v) the amount of debts secured by floating charges,

(vi) an estimate of the deficiency with respect to debts secured by floating charges or the surplus available after paying the debts secured by fixed or floating charges,

(vii) the amount of unsecured debts (excluding preferential debts),

(viii) an estimate of the deficiency with respect to unsecured debts or the surplus available after paying unsecured debts,

(ix) any issued and called-up capital, and

(x) an estimate of the deficiency with respect to, or surplus available to, members of the institution,

(i) any creditors under hire-purchase, chattel leasing or conditional sales agreements, and

(ii) any creditors claiming retention of title over property in the institution’s possession, and

(d) the name and address of each member of the institution and the number, nominal value and other details of the shares held by each member.

(3) Subject to paragraphs (4) and (5), the list of creditors required by paragraph 47(2) and paragraph (2)(c) of this rule must contain the following details—

(a) the name and postal address of the creditor,

(b) the amount of the debt owed to the creditor,

(d) the date on which the security was given, and

(e) the value of any such security.

(4) Paragraph (5) applies where the particulars required by paragraph (3) relate to creditors who are either-

(a) employees or former employees of the institution, or

(b) consumers claiming amounts paid in advance for the supply of goods or services.

(5) Where this paragraph applies—

(a) the statement of affairs itself must state—

(i) the number of employees or former employees of the institution and the total of the debts owed to them, and

(ii) the number of consumers claiming amounts paid in advance for the supply of goods or services and the total of the debts owed to them, and

(b) the particulars required by paragraph (3) must be set out in a separate schedule to the statement of affairs for each of the employees, former employees and consumers referred to in paragraphs (4)(a) and (b).

(6) Subject to paragraph (7), the administrator must not—

(a) disclose to any person any schedule or any of the details contained in any schedule provided under paragraph (5)(b),

(b) send or deliver to any person (including the registrar of companies) any schedule provided under paragraph (5)(b) at the same time as sending or delivering the statement of affairs, or

(c) include a schedule or any of the details contained in any schedule provided under paragraph (5)(b) in a statement of proposals or revised statement of proposals under rule 26 or rule 32.

(7) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (5)(b).

Details of the asset pool, safeguarding measures and reconciliation

20

(1) In addition to the matters required by paragraph 47(2) and under rule 19, the statement of affairs must include particulars of the asset pool including the relevant funds held by the institution.

(2) The particulars must include—

(a) subject to paragraph (3), the names and contact details of each customer of the institution and each such customer’s relevant funds claim,

(b) details of the asset pool including details of—

(i) the safeguarding measures employed by the institution and the amount of relevant funds safeguarded in accordance with each of such measures,

(ii) any relevant funds invested (in the case of a payment institution) in secure, liquid assets approved by the FCA in accordance with regulation 23(6) of the PSR 2017[^f00011] or (in the case of an electronic money institution) in secure, liquid low-risk assets in accordance with regulation 21(2) of the EMR 2011[^f00012],

(iii) any insurance policy covering relevant funds,

(iv) the accounts in which relevant funds are held,

(v) any guarantee given by an authorised insurer or authorised credit institution covering relevant funds, and

(3) Where the particulars required by paragraph (2)(a) relate to customers who are individuals—

(a) the particulars must be set out in a separate schedule from the statement of affairs, and

(b) the statement of affairs must state the number of customers who are individuals and the total of the debts owed to them.

(4) Subject to paragraph (5), the administrator must not—

(a) disclose to any person any schedule or any of the details contained in any schedule provided under paragraph (3)(a),

(b) send or deliver to any person (including the registrar of companies) any schedule provided under paragraph (3)(a) at the same time as sending or delivering the statement of affairs, or

(c) include any schedule or any of the details contained in any schedule provided under paragraph (3)(a) in a statement of proposals or revised statement of proposals under rule 26 or rule 32.

(5) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (3)(a).

Verification, filing and statement of concurrence

21

(1) The statement of affairs must be verified by a statement of truth by the nominated person.

(2) The administrator may require any relevant person to submit a statement of concurrence.

(3) Where the administrator requires a statement of concurrence, the nominated person making the statement of affairs must be informed of that fact.

(4) The nominated person must deliver the statement of affairs together with the statement of truth, together with a copy, to the administrator.

(5) The nominated person must also deliver a copy of the statement of affairs to every person who has been required to submit a statement of concurrence.

(6) The relevant person required to submit a statement of concurrence must deliver the statement of concurrence together with a copy before the end of the period of five business days (or such other period as the administrator may agree) beginning on the day on which the statement of affairs being concurred with is received by that relevant person.

(7) A statement of concurrence—

(a) must identify the institution, and

(b) may be qualified in respect of matters dealt with by the statement of affairs, where the relevant person making the statement of concurrence-

(i) is not in agreement with the nominated person,

(ii) considers the statement of affairs to be erroneous or misleading, or

(iii) is without the direct knowledge necessary for concurring with it.

(8) Subject to paragraph (9) and rule 22, the administrator must as soon as is reasonably practicable deliver a copy of the statement of affairs and any statement of concurrence to the registrar of companies and file them with the court.

(9) The administrator must not deliver to the registrar of companies with the statement of affairs and any statement of concurrence any schedule required by rule 19(5)(b) or rule 20(3)(a).

Limited disclosure

22

(1) Where the administrator thinks that it would prejudice the conduct of the special administration (or might reasonably be expected to lead to violence against any person) for the whole or part of a statement of affairs or a statement of concurrence to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of the whole or any part of a statement of affairs or a statement of concurrence.

(2) The court may, on such application, order that the statement of affairs or any statement of concurrence or, as the case may be, a specified part of either must not be filed with the registrar of companies.

(3) The administrator must, as soon as is reasonably practicable, deliver a copy of the order, the statement of affairs and any statement of concurrence (to the extent provided by the order) to the registrar of companies.

(4) If a creditor or a customer seeks disclosure of a statement of affairs, a statement of concurrence or a specified part of either in relation to which an order has been made under this rule, that person may apply to the court for an order that the administrator disclose it or a specified part of it.

(5) An application under paragraph (4) must be supported by written evidence in the form of a witness statement.

(6) The applicant must give the administrator notice of the application at least three business days before the hearing.

(7) The court may make any order for disclosure subject to such conditions as to:

(a) confidentiality,

(b) duration,

(d) other matters,

as it thinks just.

(8) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as is reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

(9) The administrator must, as soon as is reasonably practicable after the making of an order under paragraph (8), file a copy of the statement of affairs and any statement of concurrence to the extent provided by the order with the registrar of companies.

(10) When the statement of affairs or a statement of concurrence is filed in accordance with paragraph (9), the administrator must, where they have sent a statement of proposals under paragraph 49, provide the creditors and the customers with a copy or summary of the statement of affairs and any statement of concurrence as filed.

(11) The provisions of CPR Part 31[^f00013] do not apply to an application under this rule.

Release from duty to submit statement of affairs

23

(1) The power of the administrator under paragraph 48(2) to revoke a requirement to submit a statement of affairs or to extend the period within which it must be submitted may be exercised at the administrator’s own discretion, or at the request of any nominated person who has been required to provide the statement of affairs.

(2) The nominated person may, if they request a revocation or extension and it is refused by the administrator, apply to the court for it and when such an application is made, the period referred to in paragraph 48(1) and rule 18(3)(e) is suspended pending the court’s decision.

(3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it without giving notice to any other party other than the applicant.

(4) If the application is not dismissed under paragraph (3), the court must fix a venue for it to be heard, and give notice to the relevant person and to the FCA accordingly.

(5) Where an application has been made under paragraph (2), the FCA may appear and be heard at the hearing or may make written representations.

(6) The applicant must, at least fourteen days before the hearing, deliver to the administrator a notice stating the venue and accompanied by a copy of the application and of any evidence on which the applicant intends to rely.

(7) The administrator may appear and be heard on the application and, whether or not they appear, the administrator may file a written report of any matters which they consider ought to be drawn to the court’s attention.

(8) If a report is filed under paragraph (7), a copy of it must be delivered by the administrator to the applicant not later than five business days before the hearing.

(9) Sealed copies of any order made on the application must be delivered by the court to the applicant and the administrator.

(10) On any application under this rule, the applicant’s costs must be paid in any event by the applicant and, unless the court otherwise orders, no allowance towards them must be made as an expense of the special administration.

Expenses of statement of affairs

24

(1) A nominated person making the statement of affairs or a relevant person making a statement of concurrence must be allowed, and paid by the administrator as an expense of the special administration, any expenses incurred by the nominated person or relevant person in so doing which the administrator considers reasonable.

(2) Any decision by the administrator under this rule is subject to appeal to the court.

(3) Nothing in this rule relieves a nominated person or a relevant person from any obligation with respect to:

(a) the preparation, verification and submission of the statement of affairs or a statement of concurrence, or

(b) the provision of information to the administrator.

Submission of accounts

25

(1) Any of the persons specified in section 235(3) of the IA 1986 must, at the request of the administrator, provide the administrator with the institution’s accounts as at such date and for such period as the administrator may specify.

(2) The period specified may begin from a date up to 3 years preceding the date the institution entered special administration, or from an earlier date to which the audited accounts of the institution were last prepared.

(3) The court may, on the administrator’s application, require accounts for an earlier period.

(4) Rule 24 applies (with the necessary modification) in relation to the accounts to be provided under this rule as it applies to the statement of affairs.

(5) The accounts must (if the administrator so requires) be verified by a statement of truth and (whether or not so verified) be delivered within twenty-one days of the request under paragraph (1) (or such longer period as the administrator may allow).

CHAPTER 2 — Statement of proposals

Administrator’s proposals

26

(1) The administrator must under paragraph 49 (or regulation 39 where the FCA has given a direction under regulation 38 which has not been withdrawn) make a statement of proposals, which is required by paragraph 49(4) to be delivered to the registrar of companies, creditors, every customer of whose claim the administrator is aware and who the administrator has a means of contacting, the FCA and members.

(2) In addition to the information required by paragraph 49 (or regulation 39, if applicable), the statement of proposals must include—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, any other trading names, the registered address and registered number of the institution,

(c) details of the administrator’s appointment (including the date of appointment and details of who applied for the appointment),

(d) in the case of joint administrators, details of the apportionment of functions,

(e) the names of the directors and secretary of the institution and details of any shareholdings in the institution they have,

(f) an account of the circumstances giving rise to the application for the appointment of the administrator,

(g) if a statement of affairs has been submitted:

(i) a copy or summary of it, except so far as an order under rule 22 limits disclosure of it, and excluding any schedule referred to in rule 19(5)(b) or rule 20(3)(a) or the particulars relating to creditors or customers contained in any such schedule, and

(ii) any comments which the administrator may have on the statement of affairs,

(h) if an order limiting the disclosure of the statement of affairs has been made under rule 22, a statement of that fact, as well as—

(i) details of who submitted the statement of affairs,

(ii) the date of the order for limited disclosure, and

(iii) the details or a summary of the details that are not subject to that order,

(i) subject to sub-paragraphs (j) and (k), if a full statement of affairs is not submitted, or if no statement of affairs is submitted, the name, postal address and the amount of the debt owing to each creditor of the institution including details of any security held and the value of any such security,

(j) sub-paragraph (k) applies where the particulars required by sub-paragraph (i) relate to creditors who are either—

(i) employees or former employees of the institution, or

(ii) consumers claiming amounts paid in advance for the supply of goods or services,

(k) where this paragraph applies—

(i) the particulars required under sub-paragraph (i) must state separately for each of sub-paragraphs (j)(i) and (ii) the number of such creditors and the total of the debts owed to them, and

(ii) the particulars required by sub-paragraph (i) in respect of such creditors under sub-paragraph (j)(i) and (ii) must be set out in separate schedules,

(l) subject to sub-paragraph (m), if a full statement of affairs is not submitted, or if no statement of affairs is submitted, the name and (to the extent known to the administrator after making all reasonable enquiries) the contact details of each customer of the institution and each customer’s relevant funds claim together with:

(i) details as to any security interest held by the institution or another person in respect of the asset pool, and

(ii) details of the asset pool and the measures used by the institution to safeguard relevant funds,

(m) where customers are individuals—

(i) the particulars required under sub-paragraph (l) must state separately the number of such customers and the total of the debts owed to them, and

(ii) the remaining details required under sub-paragraph (l) in relation to such customers must be set out in a separate schedule,

(n) if no statement of affairs is submitted, details of the financial position of the institution at the latest practicable date (which must, unless the court otherwise orders, be a date not earlier than that on which the institution entered special administration), and an explanation as to why there is no statement of affairs,

(o) the basis upon which it is proposed that the administrator’s remuneration should be fixed under rule 163, and, if this basis has already been set, details as to what has been set and any proposals for this to be changed,

(p) a statement complying with paragraph (6),

(q) details of whether (and why) the administrator proposes to apply to the court under section 176A(5) of the IA 1986 (unless the administrator intends to propose a company voluntary arrangement),

(r) an estimate of the value of the prescribed part for the purposes of section 176A of the IA 1986 (unless the institution intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief,

(s) an estimate of the value of the institution’s net property (unless the administrator intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief,

(t) an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FCA has given a direction under regulation 38, an explanation as to how this has dictated the priority given to a particular objective),

(u) the manner in which the affairs and business of the institution have been managed and financed since the date of the administrator’s appointment (including the reasons for and terms of any disposal of assets),

(v) details as to the order in which the administrator aims to pursue the special administration objectives and the manner in which the affairs and business of the institution will be managed and financed if the administrator’s proposals are approved,

(w) details of any reconciliation undertaken by the administrator (whether under regulation 13 or otherwise),

(x) details of the steps taken by the administrator to constitute any asset pool,

(y) whether the administrator expects a dividend to be paid to creditors and an estimate of the amount of this dividend,

(z) how it is proposed that the special administration shall end, in accordance with Objective 3 as set out in regulation 12(4), and

(aa) any other information which the administrator thinks necessary to enable creditors and customers to decide whether or not to approve the statement of proposals.

(3) Subject to paragraph (4), the administrator must not—

(a) disclose any schedule or any of the details contained in any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) to any person,

(b) send or deliver any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) with a statement of proposals or revised statement of proposals to any person (including the registrar of companies).

(4) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii).

(5) In this Part—

(a) “pre-administration costs” are—

(i) fees charged, and

(ii) expenses incurred,

by the administrator, or another person qualified to act as an insolvency practitioner, before the institution entered special administration but with a view to its doing so, and

(b) “unpaid pre-administration costs” are pre-administration costs which had not been paid when the institution entered special administration.

(6) A statement of pre-administration costs complies with this paragraph if it includes—

(a) details of any agreement under which the fees were charged and expenses incurred, including the parties to the agreement and the date on which the agreement was made,

(b) details of the work done for which the fees were charged and expenses incurred,

(c) an explanation of why the work was done before the institution entered special administration and how it would further the achievement of the special administration objectives,

(d) a statement of the amount of the pre-administration costs, setting out separately—

(i) the costs incurred in connection with the pursuit of Objective 1,

(ii) the costs incurred in connection with the pursuit of Objectives 2 and 3,

(iii) the fees charged by the administrator,

(iv) the expenses incurred by the administrator,

(v) the fees charged (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately), and

(vi) the expenses incurred (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately),

(e) a statement of the amounts of pre-administration costs which have already been paid (set out separately as under sub-paragraph (d)),

(f) the identity of the person who made the payment or, if more than one person made the payment, the identity of each such person and of the amounts paid by each such person set out separately as under sub-paragraph (d),

(g) a statement of the amounts of unpaid pre-administration costs (set out separately as under sub-paragraph (d)), and

(h) a statement that the payment of unpaid pre-administration costs as an expense of the special administration is—

(i) subject to approval under rule 100, and

(ii) not part of the proposals subject to approval under paragraph 53.

(7) The statement of proposals—

(a) may exclude information the disclosure of which could seriously prejudice the commercial interests of the institution, and

(b) must include a statement of any exclusion.

(8) In addition to the standard contents, a notice published by the administrator under paragraph 49(6) must:

(a) identify the proceedings,

(b) be advertised in such manner as the administrator thinks fit, and

(c) be published as soon as is reasonably practicable after the administrator has delivered the statement of proposals to the institution’s creditors and customers but no later than eight weeks (or such other period as may be agreed by the creditors and customers or as the court may order) from the date on which the institution entered special administration.

(9) In addition to the standard contents, a notice published by the administrator under paragraph 49 that the statement of proposals is to be provided free of charge to a payment system operator must:

(a) identify the proceedings,

(b) include a statement confirming that a copy of the statement of proposals will also be provided free of charge to the Payment Systems Regulator if it applies in writing to a specified address,

(d) be published as soon as is reasonably practicable after the administrator has delivered the statement of proposals to the institution’s creditors and customers but no later than eight weeks (or such other period as may be agreed by the creditors and customers or as the court may order) from the date on which the institution entered special administration.

(10) Following an application by the administrator under paragraph 107, where the court orders an extension of the period of time in paragraph 49(5), the administrator must as soon as is possible after the order has been made deliver a notice of the extension to—

(a) every creditor of the institution of whose address the administrator is aware,

(b) every customer of the institution who the administrator has a means of contacting and of whose relevant funds claim the administrator is aware,

(d) any relevant payment system operator,

(e) the registrar of companies, and

(f) the FCA.

(11) A notice under paragraph (10) must:

(a) identify the proceedings,

(b) state the date to which the court has ordered an extension, and

(12) The administrator is taken to have complied with paragraph (10)(c) if the administrator publishes a notice which:

(a) contains the standard contents,

(b) contains the information in paragraph (9),

(d) states that the member may request in writing a copy of the notice of the extension, and states the address to which to write, and

(e) is published as soon as is reasonably practicable after the administrator has delivered the notice of the extension to the institution’s creditors and customers.

(13) The administrator is taken to have complied with paragraph (10)(d) if the administrator publishes a notice which:

(a) contains the standard contents,

(b) contains the information in paragraph 9,

(d) states that the payment system operator may request in writing a copy of the notice of the extension free of charge, and states the address to which to write, and

(e) is published as soon as is reasonably practicable after the administrator has delivered the notice of the extension to the institution’s creditors and customers.

Limited disclosure of the statement of proposals

27

(1) Where the administrator thinks that it would prejudice the conduct of the special administration (or might reasonably be expected to lead to violence against any person) for any of the matters specified in rule 26(2)(i) to (n) to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of any specified part of the statement of proposals.

(2) The court may, on such application, order that some or all of the specified part of the statement must not be sent to the registrar of companies or to creditors, customers or members of the company as otherwise required by paragraph 49(4) or to a payment system operator or to the Payment Systems Regulator.

(3) The administrator must as soon as is reasonably practicable deliver to the persons specified in paragraph (2) the statement of proposals (to the extent provided by the order) and an indication of the nature of the matter in relation to which the order was made.

(4) The administrator must also deliver a copy of the order to the registrar of companies.

(5) A creditor who seeks disclosure of a part of the statement of proposals in relation to which an order has been made under this rule may apply to the court for an order that the administrator disclose it, and the application must be supported by written evidence in the form of a witness statement.

(6) The applicant must give the administrator notice of the application at least three business days before the hearing.

(7) The court may make any order for disclosure subject to such conditions as to:

(a) confidentiality,

(b) duration,

(d) other matters,

as it thinks just.

(8) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as is reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

(9) The administrator must, as soon as is reasonably practicable after the making of an order under paragraph (7), deliver to the persons specified in paragraph (2) a copy of the statement of proposals to the extent provided by the order.

(10) The provisions of CPR Part 31 do not apply to an application under this rule.

CHAPTER 3 — Initial meeting to consider proposals

Initial meeting

28

(1) As soon as is reasonably practicable after an invitation to the initial meeting has been sent out in accordance with paragraph 51(1), the administrator must have gazetted—

(a) that an initial meeting of creditors and customers is to take place,

(b) the venue fixed for the meeting, and

(2) The information required to be gazetted under paragraph (1) may also be advertised in such other manner as the administrator thinks fit.

(3) Where the court orders an extension to the period set out in paragraph 51(2)(b), the administrator must notify each person who was sent notice in accordance with paragraph 49(4).

(4) This rule does not apply where the FCA has given a direction under regulation 38 and the direction has not been withdrawn.

Notice to officers

29

(1) Where rule 28 applies, notice to attend the meeting must be given to every present or former officer of the institution whose presence the administrator thinks is required at the same time that notice is sent to creditors and customers.

(2) That notice must contain—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, registered address, registered number and any other trading names of the institution,

(d) details of the venue of the meeting.

(3) Every person who receives a notice under paragraph (1) must attend.

Business of the initial meeting

30

(1) At the initial meeting of creditors and customers—

(a) a creditors’ committee may be established in accordance with Chapter 8 of this Part, and

(b) the statement of proposals must be approved as follows.

(2) Creditors and customers must vote as separate classes on whether to approve the proposals.

(3) The proposals must not be approved unless both classes of voter have voted to approve them.

(4) If the proposals are approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposals as modified.

(5) Where the administrator is unable to get the requisite majority of a class of voter for approval of the statement of proposals (with or without any modifications), rule 31 applies.

(6) This rule does not apply where the FCA has given a direction under regulation 38 and the direction has not been withdrawn.

Adjournment of meeting to approve the statement of proposals

31

(1) If, at the initial meeting of creditors and customers, there is not the requisite majority for approval of the statement of proposals (with or without any modifications) for each class of voter, the administrator may, and must if a resolution is passed to that effect, adjourn the meeting for not more than fourteen days (subject to any direction by the court).

(2) If there are subsequently further adjournments, the final adjournment must not be to a day later than fourteen days after the date on which the meeting was originally held, (subject to any direction by the court).

(3) Where a meeting is adjourned under this rule, proofs and proxies may be used if lodged at any time up to 12.00 hours on the business day immediately before the adjourned meeting.

(4) Where at the initial meeting, the proposals were approved (whether or not with modifications) by one class of voter but not the other, that approval must no longer stand at the adjourned meeting unless the version of the proposals to be voted on has not been modified from the version that was approved.

(5) If the administrator is unable to get the requisite majority of creditors or customers for approval of the statement of proposals, the administrator may apply to the court for directions under paragraph 63.

Revision of the statement of proposals

32

(1) The administrator must under paragraph 54 (or regulation 40 where the FCA has given a direction under regulation 38 which has not been withdrawn) make a statement setting out the proposed revisions to the statement of proposals (“the revised statement”).

(2) The revised statement, which must be delivered in accordance with paragraph 54(2)(b) and (c), must include—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, registered address, registered number and any other trading names of the institution,

(d) in the case of joint administrators, details of the apportionment of functions,

(e) the names of the directors and secretary of the institution and details of any shareholdings in the institution they have,

(f) a summary of the initial proposals and the reasons for proposing a revision,

(g) details of the proposed revision including details of the administrator’s assessment of the likely impact of the proposed revision upon the creditors generally or upon each class of creditor or upon the customers (as the case may be), and

(h) any other information that the administrator thinks necessary to enable creditors and customers (where applicable) to decide whether or not to approve the proposed revisions.

(3) A copy of the revised statement must be delivered to the FCA at the same time as the revised statement is delivered to others in accordance with paragraph 54(2).

(4) Where the administrator considers that the revision proposed will only affect creditors or, as the case may be, customers, the notice of the meeting to consider the revised statement must be sent to both creditors and customers, but must state who is invited to the meeting.

(5) Subject to paragraph 54(3), within five business days of delivering the revised statement the administrator must deliver a copy of the statement to every member of the institution of whose address the administrator is aware.

(6) Any notice to be published under paragraph 54(3) must be advertised in such a manner as the administrator thinks fit.

(7) The notice must be published as soon as is reasonably practicable after the administrator delivers the revised statement in accordance with paragraph 54(2) and, in addition to the standard contents, must—

(a) state that members can write for a copy of the statement of revised proposals and

(b) state the address to which to write.

(8) Paragraph (4) shall not apply where the FCA has given a direction under regulation 38 which has not been withdrawn at the time the administrator proposes a revision to the statement of proposals.

(9) In this rule, a reference to—

“paragraph 54(2)” also includes a reference to regulation 40(4), and

“paragraph 54(3)” also includes a reference to regulation 40(5).

Meeting to approve the revised statement of proposals

33

(1) This rule applies to a meeting of creditors, a meeting of customers or a meeting of creditors and customers to approve the revisions to the statement of proposals.

(2) Where the revisions are being approved by a meeting of creditors and customers—

(a) creditors and customers must vote as separate classes on whether to approve the revisions,

(b) the revisions shall not be approved unless both classes of voter have voted to approve them, and

(c) where the revisions are approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposals as modified.

(3) If the administrator is unable to get the requisite majority of creditors or customers for approval of the revised statement of proposals, the administrator may apply to the court for directions under paragraph 55.

(4) Where the FCA has given a direction under regulation 38 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals, this rule shall not apply.

Notice to creditors and customers

34

(1) As soon as is reasonably practicable after the conclusion of a meeting of creditors, of customers, or of creditors and customers to consider the administrator’s proposals or revised proposals, the administrator must—

(a) deliver notice of the result of the meeting to every person who received a copy of the original proposals,

(b) deliver notice of the result of the meeting to the Payment Systems Regulator and any payment system operator,

(c) attach a copy of the proposals considered at the meeting to the notice sent to each creditor and each customer who did not receive notice of the meeting but of whose claim the administrator has subsequently become aware, and

(d) file with the court a copy of the proposals considered at the meeting and notice of the result of the meeting.

(2) The administrator is taken to have complied with paragraph (1)(b) if the administrator publishes a notice which:

(a) contains the standard contents,

(b) identifies the proceedings,

(d) is advertised in such manner as the administrator thinks fit,

(e) states that the payment system operator may request in writing a copy of the notice of the result of the meeting free of charge, and states the address to which to write, and

(f) is published as soon as is reasonably practicable after the administrator has delivered the notice of the result of the meeting to those who received a copy of the original proposals.

CHAPTER 4 — Meetings generally

Meetings generally

35

Except where different provision is made in the Regulations or these Rules, this Chapter applies to meetings summoned by the administrator under—

(a) paragraph 51;

(b) paragraph 54(2);

or following a request or a direction from the court under paragraph 56.

Venue

36

(1) In fixing the venue for a meeting, the convener must have regard to the convenience of those attending.

(2) Meetings must be summoned for commencement between 10.00 and 16.00 hours on a business day (subject to any direction by the court).

(3) In this rule, “meeting” includes an adjourned meeting.

Notice of meeting by individual notice: when and where sent

37

(1) This rule applies except where the court orders under rule 39 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must be delivered at least fourteen days before the day fixed for the meeting as provided in paragraph (3).

(3) Notice must be sent—

(a) for a meeting involving the creditors, to all the creditors of whose address the administrator is aware and who had claims against the institution at the date when it entered special administration (except for those who have subsequently been paid in full);

(b) for a meeting involving the customers, to all customers of whose relevant funds claim the administrator is aware and has a means of contacting (except for those who have no outstanding relevant funds claims);

(c) for a meeting of contributories, to every person appearing (by the institution’s books or otherwise) to be a contributory of the institution and of whose address the administrator is aware.

(4) The FCA must also be notified of any such meeting.

Notice of meeting by individual notice: content and accompanying documents

38

(1) This rule applies except where the court orders under rule 39 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must specify the purpose of and venue for the meeting and state that a creditor or customer wishing to vote at the meeting must lodge claims (including relevant funds claims) or proofs and (if applicable) proxies at a specified place not later than 12.00 hours on the business day before the date fixed for the meeting.

(3) A blank proxy complying with rule 90 must be sent out with every notice summoning a meeting.

Notice of meeting by advertisement only

39

(1) The court may order that notice of any meeting under these Rules be given by advertisement and not by individual notice to the persons concerned.

(2) In considering whether so to order, the court must have regard to:

(a) the cost of advertisement,

(b) the amount of assets available, and

Content of notice for meetings

40

(1) Notice of a meeting of the creditors, the customers or a meeting of creditors and customers, must contain the following information—

(a) a statement that the proceedings are being held in the court and the court reference number;

(b) the full name, registered address, registered number and any other trading names of the institution;

(d) details of the venue of the meeting;

(e) whether the meeting is—

(i) an initial creditors’ and customers’ meeting under paragraph 51,

(ii) to consider revisions to the administrator’s proposals under paragraph 54(2),

(iii) a further creditors’, or creditors and customers’, or customers’ meeting under paragraph 56, or

(iv) a meeting under paragraph 62,

unless the court orders that it be given by advertisement only in accordance with rule 39.

(2) Where the court orders an extension to the period set out in paragraph 51(2)(b), the administrator must notify each person who was sent notice in accordance with paragraph 49(4).

Gazetting and advertisement of meetings

41

(1) The administrator, in convening a meeting under these Rules, must have gazetted a notice which, in addition to the standard contents, must state—

(a) that a meeting of:

(i) creditors,

(ii) customers,

(iii) creditors and customers,

(iv) members, or

(v) contributories

is to take place,

(b) the venue fixed for the meeting,

(d) the time and date by which, and place at which, those attending who wish to vote must lodge proxies and (in the case of a meeting of creditors, customers or both) claims or proofs.

(2) Notice under this rule must be gazetted before or as soon as is reasonably practicable after notice is given to those attending.

(3) Information to be gazetted under this rule may also be advertised in such other manner as the administrator thinks fit.

Non-receipt of notice of meeting

42

Where, in accordance with the Regulations or these Rules, a meeting is summoned by notice, the meeting is presumed to have been duly summoned and held, even if not all those to whom the notice is to be given have received it.

Requisition of meetings

43

(1) A request for a requisitioned meeting must contain the following information—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, registered address and registered number of the institution,

(d) the full amount of that creditor’s claim.

(2) The request for a requisitioned meeting must include a statement of the purpose of the proposed meeting and—

(a) either—

(i) a list of the creditors concurring with the request and of the amounts of their respective claims, and

(ii) written confirmation of concurrence from each creditor concurring, or

(b) a statement that the requesting creditor’s debt alone is sufficient without the concurrence of other creditors.

(3) A requisitioned meeting must be held within twenty-eight days of the date of the administrator’s receipt of the notice.

(4) The administrator—

(a) must notify the FCA of the details and purpose of the requisitioned meeting, and

(b) may, if the administrator thinks appropriate, also summon customers to the requisitioned meeting.

Expenses of requisitioned meetings

44

(1) The expenses of summoning and holding a requisitioned meeting must be paid by the person who makes the request, who must deposit with the administrator security for their payment.

(2) The security to be deposited must be such sum as the administrator may determine, and the administrator must not act without the security having been deposited.

(3) The meeting may resolve that the expenses of summoning and holding it are to be payable out of the assets of the institution as an expense of the special administration.

(4) To the extent that any deposit made under this rule is not required for the payment of expenses of summoning and holding the meeting, it must be repaid to the person who made it.

Quorum at meetings

45

(1) A meeting of creditors, customers, creditors and customers or contributories is not competent to act unless a quorum is present.

(2) A quorum is—

(a) in the case of a meeting of creditors, at least one creditor entitled to vote;

(b) in the case of a meeting of customers, at least one customer entitled to vote;

(c) in the case of a meeting of creditors and customers, at least one creditor and one customer who are each entitled to vote;

(d) in the case of a meeting of contributories, at least two contributories so entitled, or all the contributories, if their number does not exceed two.

(3) Where—

(a) the provisions of this rule as to a quorum being present are satisfied by the attendance of—

(i) the chair alone, or

(ii) one other person in addition to the chair, and

(b) the chair is aware, by virtue of claims or proofs and proxies received or otherwise, that one or more additional persons would, if attending, be entitled to vote,

the meeting must not commence until at least the expiry of 15 minutes after the time appointed for its commencement.

Chair at meetings

46

(1) At any meeting of the creditors, the customers, or creditors and customers summoned by the administrator, either the administrator must be the chair, or a person nominated by the administrator in writing to act in the administrator’s place.

(2) A person so nominated must be either—

(a) one who is qualified to act as an insolvency practitioner in relation to the institution, or

(b) an employee of the administrator or the administrator’s firm who is experienced in insolvency matters.

(3) Where the chair holds a proxy which includes a requirement to vote for a particular resolution and no other person proposes that resolution—

(a) the chair must propose it unless the chair considers that there is good reason for not doing so, and

(b) if the chair does not propose it, the chair must as soon as is reasonably practicable after the meeting notify the principal of the reason why not.

Adjournment by chair

47

(1) The chair may, and must if the meeting so resolves, adjourn the meeting to such time and place as seems to the chair to be appropriate in the circumstances.

(2) An adjournment under this rule must not be for a period of more than fourteen days, subject to any direction by the court.

(3) If there are further adjournments, the final adjournment must not be to a day later than fourteen days after the date on which the meeting was originally held.

(4) Rule 36 applies with regard to the venue fixed for a meeting adjourned under this rule.

(5) This rule does not apply to the initial meeting of creditors and customers.

Adjournment in absence of chair

48

(1) If within 30 minutes from the time fixed for commencement of a meeting there is no person present to act as chair, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

(2) If within 30 minutes from the time fixed for the commencement of the meeting those persons attending the meeting do not constitute a quorum, the chair may adjourn the meeting to such time and place as the chair may appoint.

Claims, proofs and proxies in adjournment

49

Where a meeting under these Rules is adjourned, claims, proofs and proxies may be used if lodged at any time up to 12.00 hours on the business day immediately before the adjourned meeting.

Suspension

50

Once only in the course of a meeting, the chair may, without an adjournment, declare it suspended for any period up to one hour.

Venue and conduct of company meetings

51

(1) Where the administrator summons a meeting of members of the institution, the administrator must fix a venue for it having regard to their convenience.

(2) The chair of the meeting must be the administrator or a person nominated by the administrator in writing to act in the administrator’s place.

(3) A person so nominated must be—

(a) one who is qualified to act as an insolvency practitioner in relation to the institution, or

(b) an employee of the administrator or the administrator’s firm who is experienced in insolvency matters.

(4) If within 30 minutes from the time fixed for commencement of the meeting there is no person present to act as chair, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

(5) Subject to anything to the contrary in the Regulations and these Rules, the meeting must be summoned and conducted in accordance with the law of England and Wales, including any applicable provision in or made under CA 2006.

(6) The chair of the meeting must ensure that minutes of its proceedings are entered in the company’s minute book.

CHAPTER 5 — Entitlement to vote at meetings

Entitlement to vote (creditors)

52

(1) A creditor is entitled to vote at a meeting of creditors, or at a meeting of creditors and customers, only if—

(a) the administrator has been given written details of the debt which is claimed as due to that person from the institution, including any calculation for the purposes of rule 53 or rule 54,

(b) the details were given to the administrator—

(i) not later than 12.00 hours on the business day before the day fixed for the meeting, or

(ii) later than that time but the chair of the meeting is satisfied that that was due to circumstances beyond that person’s control,

(d) there has been lodged with the administrator any proxy intended to be used on behalf of that person.

(2) Where under rule 56(4) the administrator has become aware that a customer has a shortfall claim:

(a) the administrator shall treat the customer as having provided details of the shortfall claim under paragraphs (1)(a) and (b);

(b) the claim shall be admitted under paragraph 1(c) for the purposes of entitlement to vote, and

(c) the customer does not need to submit a separate claim under paragraph (1) in order to be entitled to vote as a creditor at a meeting of creditors and customers in respect of its shortfall claim but a customer should if relevant lodge a proxy in accordance with paragraph (1)(d).

(3) For the purposes of this Chapter, written details of a claim, once lodged or given in accordance with this rule, need not be lodged or given again.

(4) The chair of a meeting of creditors, or of a meeting of creditors and customers, may call for any document or other evidence to be produced if the chair thinks it necessary for the purpose of substantiating the whole or any part of a claim.

Calculation of voting rights (creditors)

53

(1) Votes are calculated according to the amount of each creditor’s claim as at the date on which the institution entered special administration, less any payments that have been made to the creditor after that date in respect of the claim and any adjustment by way of set-off in accordance with rule 132 as if that rule were applied on the date on which the votes are counted.

(2) A creditor may vote in respect of a debt which is for an unliquidated amount or the value of which is not ascertained if the chair decides to put upon it an estimated minimum value for the purpose of entitlement to vote and admits the claim for that purpose.

(3) Paragraph (2) does not apply to a shortfall claim.

(4) A creditor may not vote in respect of any claim or part of a claim—

(a) where the claim or part is secured, except where the vote is cast in respect of the balance (if any) of the debt after deduction of the value of the security as estimated by the creditor, or

(b) where the claim is in respect of a debt wholly or partly on, or secured by, a current bill of exchange or promissory note, unless the creditor is willing—

(i) to treat as a security in the creditor’s hands the liability on the bill or note of every person who is liable on it antecedently to the institution, and—

(aa) in the case of a company, has not gone into liquidation, or

(bb) in the case of an individual, against whom a bankruptcy order has not been made or whose estate has not been sequestrated, and

(ii) to estimate the value of the security and for the purposes of voting (but not otherwise) to deduct it from the claim.

Calculation of voting rights: special cases (creditors)

54

(1) An owner of goods under a hire-purchase or chattel leasing agreement, or a seller of goods under a conditional sale agreement, is entitled to vote in respect of the amount of the debt due and payable by the institution on the date on which it entered special administration.

(2) In calculating the amount of any debt for the purpose of paragraph (1), no account is to be taken of any amount attributable to the exercise of any right under the relevant agreement so far as the right has become exercisable solely by virtue of—

(a) the making of a special administration application, or

(b) the institution entering special administration.

Procedure for admitting creditors’ claims for voting

55

(1) At a meeting of creditors, the chair must ascertain the entitlement of persons wishing to vote as creditors and admit or reject their claims accordingly.

(2) The chair may admit or reject a claim in whole or in part.

(3) If the chair is in any doubt whether a claim should be admitted or rejected, the claim must be marked as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained.

Entitlement to vote (customers)

56

(1) A customer is entitled to vote at a meeting of creditors and customers, or customers only if—

(a) the administrator has been given written details of the customer’s relevant funds claim in accordance with rule 102,

(b) the details were given to the administrator—

(i) not later than 12.00 hours on the business day before the day fixed for the meeting, or

(ii) later than that time but the chair of the meeting is satisfied that the delay was due to circumstances beyond that customer’s control,

(d) there has been lodged with the administrator any proxy intended to be used on behalf of that person.

(2) Subject to paragraph (4), for the purposes of this Chapter, written details of a relevant funds claim, once lodged or given in accordance with this rule, need not be lodged or given again.

(3) The chair at a meeting of customers, or creditors and customers, may call for any document or other evidence to be produced if the chair thinks it necessary for the purpose of substantiating the whole or any part of a relevant funds claim.

(4) If at any time prior to the initial meeting or to a meeting of creditors and customers, or customers only, the administrator has become aware that a customer has a shortfall claim, the administrator must—

(a) adjust the relevant funds claim submitted under paragraph (1), subtracting the value of the shortfall claim from that relevant funds claim,

(b) submit a claim under rule 52(1)(c) on behalf of the customer as to the shortfall claim,

(d) as soon as is reasonably practicable, notify the customer—

(i) of the amended relevant funds claim and the shortfall claim, and

(ii) that a claim for the shortfall claim has been submitted under rule 52.

(5) For the purposes of this Chapter, a customer’s voting rights are calculated according to the value of the customer’s relevant funds claim submitted under this rule, taking into account any shortfall claim identified prior to the meeting.

Procedure for admitting customers’ relevant funds claims for voting

57

(1) At a meeting of creditors and customers, or customers only, the chair must ascertain the entitlement of persons wishing to vote as customers and admit or reject their relevant funds claims accordingly.

(2) The chair may admit or reject a relevant funds claim in whole or in part.

(3) If the chair is in any doubt whether a relevant funds claim should be admitted or rejected, the relevant funds claim must be marked as objected to and votes allowed to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the relevant funds claim is sustained.

Voting at meetings of creditors and customers

58

(1) This rule applies to meetings of creditors and customers.

(2) If the administrator thinks it appropriate, the creditors and customers may vote on the same resolution at the meeting, however the creditors and the customers must vote in separate classes on the resolution.

Requisite majorities

59

(1) Subject to paragraph (2), at a meeting of creditors or customers, or of creditors and customers, a resolution is passed when a majority (in value) of those present and voting in each class, in person or by proxy, have voted at the relevant meeting in favour of it.

(2) Any resolution is invalid if those voting against it include more than half in value of the creditors, or, as the case may be, customers, to whom notice of the meeting was sent and who are not, to the best of the chair’s belief, persons connected with the institution.

(3) “Persons connected with the institution” has the same meaning in respect of the institution as a person connected with a company in accordance with section 249 of the IA 1986.

Requisite majorities at contributories’ meetings

60

At a meeting of contributories, voting rights are as at a general meeting of the institution, subject to any provision of the articles affecting entitlement to vote, either generally or at a time when the institution is in liquidation.

Appeals against decisions under this Chapter

61

(1) The chair’s decisions under this Chapter are subject to appeal to the court by any creditor, customer, contributory or member.

(2) If the chair’s decision is reversed or varied, or votes are declared invalid, the court may order another meeting to be summoned or make such order as it thinks just.

(3) An appeal under this rule may not be made later than twenty-one days after the date of the meeting.

(4) The chair is not personally liable for costs incurred by any person in respect of an appeal under this rule unless the court makes an order to that effect.

CHAPTER 6 — Correspondence and remote attendance

Correspondence instead of meetings

62

(1) The administrator may seek to obtain the passing by creditors, customers, or contributories of a written resolution by delivering a notice to that effect to every creditor, customer, or contributory (as the case may be) who would be entitled to be notified of a meeting at which the resolution could be passed.

(2) Notice under paragraph (1) must contain the following information—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, registered address and registered number of the institution,

(d) the resolution to be voted on, and

(e) the closing date by which the recipient must respond to the administrator.

(3) In order to be counted, votes must—

(a) be received by the administrator by 12.00 hours on the closing date specified in the notice, and

(b) in the case of a vote cast by a creditor or by a customer, be accompanied by a statement of entitlement to vote on the resolution unless one has already been lodged with or given to the administrator.

(4) A statement of entitlement is written details of the creditor’s claim or the customer’s relevant funds claim.

(5) The closing date is to be set at the discretion of the administrator, but must be not less than fourteen days from the date of issue of the notice.

(6) Votes must be disregarded if—

(a) the requisite statement of entitlement had not accompanied them or previously been lodged with or given to the administrator, or

(b) in the application of Chapter 5 of this Part, the administrator decides that the creditor or customer is not entitled to cast the votes.

(7) For the resolution to be passed, the administrator must receive at least one valid vote in favour by the closing date specified in the notice or where the resolution is one which were it to be passed at a meeting of creditors and customers would require approval by each class voting separately, at least one valid vote from each class.

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