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The Payment and Electronic Money Institution Insolvency (Scotland) Rules 2022

Type Statutory-Instrument

Publication 2022-11-25

Last updated 2025-02-26

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(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

58

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

59

(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 called 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

60

(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 (which must be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient of the copy so sent),

(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 the closing date specified in the notice,

(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,

(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.

(8) If no valid vote is received by the closing date, the administrator must call a meeting of creditors, creditors and customers, customers or contributories (as the case may be) to consider the resolution.

(9) Creditors whose debts amount to at least ten per cent of the total debts of the institution may, within five business days of the date of issue of the notice, require the administrator to call a meeting of creditors and customers (if relevant) to consider the resolution.

(10) Customers whose relevant funds claims amount to at least ten per cent of the total relevant funds claims may, within five business days of the date of issue of the notice, require the administrator to call a meeting of customers and creditors (if relevant) to consider the resolution.

(11) Contributories whose claims represent at least ten per cent of the total voting rights of all contributories having the right to vote at a meeting of contributories may, within five business days of the date of issue of the notice, require the administrator to call a meeting of contributories to consider the resolution.

(12) If the administrator’s proposed resolution is rejected by the creditors or by the customers pursuant to this rule, the administrator may call a meeting of creditors, customers or creditors and customers, as the case may be.

(13) A reference in these Rules to anything done or required to be done at, or in connection with, or in consequence of, a meeting of creditors, customers or contributories extends to anything done in the course of correspondence in accordance with this rule.

Remote attendance at meetings conducted in accordance with section 246A of the IA 1986

61

(1) This rule applies to a request for the administrator under section 246A(9) of the IA 1986[^f00015] to specify a place for the meeting.

(2) The request must be accompanied by—

(a) in the case of a request by creditors, a list of the creditors making or concurring with the request and the amounts of their respective debts in the special administration,

(b) in the case of a request by customers, a list of the customers making or concurring with the request and the amounts of their respective relevant funds claims in the special administration,

(c) in the case of a request by contributories, a list of the contributories making or concurring with the request and their respective values (being the amounts for which they may vote at the meeting),

(d) in the case of a request by members, a list of the members making or concurring with the request and their voting rights,

(e) from each person concurring, written confirmation of that person’s concurrence.

(3) The request must be made within seven business days of the date on which the administrator sent the notice of the meeting in question.

(4) Where the administrator considers that the request has been properly made in accordance with the Regulations and this rule, the administrator must—

(a) give notice to all those previously given notice of the meeting—

(i) that it is to be held at a specified place,

(ii) as to whether the date and time are to remain the same or not,

(b) set a venue (including specification of a place) for the meeting, the date of which must be not later than twenty-eight days after the original date for the meeting,

and the notices required by sub-paragraphs (a) and (c) may be given at the same or different times.

(5) Where the administrator has specified a place for the meeting in response to a request to which this rule applies, the chair of the meeting must attend the meeting by being present in person at that place.

(6) Rule 42 does not apply to the calling and holding of a meeting at a place specified in accordance with section 246A(9) of the IA 1986.

Action where person excluded

62

(1) In this rule and rules 63 and 64, an “excluded person” means a person who—

(a) has taken all steps necessary to attend a meeting under the arrangements put in place to do so by the administrator under section 246A(6) of the IA 1986,

(b) is not permitted by those arrangements to attend the whole or part of that meeting.

(2) Where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may—

(a) continue the meeting,

(b) declare the meeting void and call the meeting again, or

(3) Where the chair continues the meeting, the meeting is valid unless—

(a) the chair decides in consequence of a complaint under rule 64 to declare the meeting void and hold the meeting again, or

(b) the court directs otherwise.

(4) Without prejudice to paragraph (2), where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may, without an adjournment, declare the meeting suspended for any period up to 1 hour.

Indication to excluded person

63

(1) A person who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion (an “indication”).

(2) A request under paragraph (1) must be made as soon as is reasonably practicable and, in any event, no later than 16.00 hours on the business day following the day on which the exclusion is claimed to have occurred.

(3) A request under paragraph (1) must be made to—

(a) the chair, where it is made during the course of the business of the meeting, or

(b) the administrator where it is made after the conclusion of the business of the meeting.

(4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made under paragraph (3) must give the indication as soon as is reasonably practicable and, in any event, no later than 16.00 hours on the business day following the day on which the request was made under paragraph (1).

Complaint

64

(1) Any person who—

(a) is, or claims to be, an excluded person, or

(b) attends the meeting (in person or by proxy) and considers that they have been adversely affected by a person’s actual, apparent or claimed exclusion,

(“the complainant”) may make a complaint.

(2) The person to whom the complaint must be made (“the relevant person”) is—

(a) the chair, where it is made during the course of the meeting, or

(b) the administrator where it is made after the meeting.

(3) The relevant person must—

(a) consider whether there is an excluded person,

(b) where satisfied that there is an excluded person, consider the complaint,

and, where satisfied that there has been prejudice, take such action as the relevant person considers fit to remedy the prejudice.

(4) Paragraph (5) applies where—

(a) the relevant person is satisfied that the complainant is an excluded person,

(b) during the period of the person’s exclusion, a resolution was put to the meeting and was voted on,

(5) Subject to paragraph (6), where satisfied that the effect of the intended vote in paragraph (4), if cast, would have changed the result of the resolution, the relevant person must—

(a) count the intended vote as being cast in accordance with the complainant’s stated intention,

(b) amend the record of the result of the resolution,

(c) where those entitled to attend the meeting have been notified of the result of the resolution, notify them of the change.

(6) Where satisfied that more than one complainant in paragraph (4) is an excluded person, the relevant person must have regard to the combined effect of the intended votes.

(7) The relevant person must notify the complainant in writing of any decision.

(8) A complaint must be made as soon as is reasonably practicable and, in any event, no later than 16.00 hours on the business day following—

(a) the day on which the person was, appeared or claimed to be excluded, or

(b) where an indication is sought under rule 63, the day on which the complainant received the indication.

(9) A complainant who is not satisfied by the action of the relevant person may apply to the court for directions and any application must be made within two business days of the date of receiving the decision of the relevant person.

CHAPTER 7 — Records, returns and reports

Minutes

65

(1) The chair of any meeting under the Regulations or these Rules, other than a company meeting (for which see rule 49(6)), must ensure minutes of its proceedings are kept.

(2) The minutes must be authenticated by the chair and be retained by the chair as part of the records of the special administration and as part of the sederunt book.

(3) The minutes must include—

(a) a list of the names of creditors who attended a meeting of creditors or a meeting of both creditors and customers (personally, by proxy or by corporate representative) and their claims,

(b) a list of the names of customers who attended a meeting of customers or a meeting of both creditors and customers (personally, by proxy or by corporate representative) and their relevant funds claims,

(d) if a creditors’ committee has been established, the names and addresses of those elected to be members of the creditors’ committee,

(e) a record of every resolution passed.

Returns or reports of meetings

66

(1) In addition to the information required by rule 183, the notification of a return or a report of a meeting must specify—

(a) the purpose of the meeting including the regulation or rule under which it was called,

(b) the venue fixed for the meeting,

(d) if the meeting took place, the outcome of the meeting (including any resolutions passed at the meeting).

(2) The chair must keep a copy of the report of the meeting as part of the sederunt book.

CHAPTER 8 — The creditors’ committee

Constitution of creditors’ committee

67

(1) Where it is resolved by a meeting of creditors and customers to establish a creditors’ committee (see paragraph 57) for the purposes of the special administration, the creditors’ committee must consist of at least three and not more than five persons elected at the meeting.

(2) Where paragraph (1) applies, before receiving nominations for members of the creditors’ committee, the administrator will set out the maximum number of members to be elected onto the creditors’ committee by each class of voter so as to ensure that the make-up of the creditors’ committee is a reflection of all parties with an interest in the achievement of the special administration objectives.

(3) The classes of voters mentioned in paragraph (2) are—

(a) creditors,

(b) customers.

(4) A person claiming to be a creditor is entitled to be a member of the committee provided that the following conditions are met—

(a) that person’s claim has not been—

(i) wholly disallowed for voting purposes, or

(ii) wholly rejected for the purpose of distribution or dividend,

(b) the claim mentioned in sub-paragraph (a) is not fully secured.

(5) A person claiming to be a customer is entitled to be a member of the creditors’ committee provided that that person’s relevant funds claim has not been—

(a) wholly disallowed for voting purposes, or

(b) wholly rejected for the purpose of settling relevant funds claims.

(6) A body corporate may be a member of the creditors’ committee, but it cannot act as such otherwise than by a representative appointed under rule 72.

Formalities of establishment

68

(1) The creditors’ committee does not come into being and accordingly cannot act until the administrator has issued a certificate of its due constitution.

(2) The certificate must state that the creditors’ committee of the institution has been duly constituted and must include the following—

(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 name and address of each member of the creditors’ committee.

(3) If the chair of the meeting of creditors and customers which resolves to establish the creditors’ committee is not the administrator, the chair must as soon as is reasonably practicable give notice of the resolution to the administrator and inform the administrator of the names and addresses of the persons elected to be members of the creditors’ committee.

(4) No person may act as a member of the creditors’ committee unless and until they have agreed to do so and, unless the relevant proxy or authorisation contains a statement to the contrary, such agreement may be given by their proxy-holder present at the meeting establishing the creditors’ committee or, in the case of a corporation, by its duly appointed representative.

(5) The administrator’s certificate of the creditors’ committee’s due constitution must not be issued before the persons elected to be members of the creditors’ committee in accordance with rule 67 have agreed to act and must be issued as soon as is reasonably practicable afterwards.

(6) If any further members are elected to the creditors’ committee at a later date, the administrator must issue an amended certificate as and when those persons have agreed to act.

(7) A copy of the certificate, and of any amended certificate, must be sent to the registrar of companies by the administrator, as soon as is reasonably practicable.

(8) If after the establishment of the creditors’ committee there is any change in its membership, the administrator must as soon as is reasonably practicable report the change to the registrar of companies by filing a copy of the amended certificate.

Functions and meetings of the creditors’ committee

69

(1) In addition to any functions conferred on the creditors’ committee by any provision of the Regulations, the creditors’ committee must assist the administrator in discharging the administrator’s functions and act in relation to the administrator in such manner as may be agreed from time to time.

(2) Subject to paragraphs (3) to (7), meetings of the creditors’ committee must be held at a time and place determined by the administrator.

(3) The administrator must call a first meeting of the creditors’ committee to take place within six weeks of the creditors’ committee’s establishment.

(4) After the calling of the first meeting, the administrator must call a meeting—

(a) if so requested by a member of the creditors’ committee or the member’s representative (the meeting then to be held within twenty-one days of the request being received by the administrator),

(b) for a specified date, if the creditors’ committee has previously resolved that a meeting be held on that date.

(5) Subject to paragraph (7), the administrator must give five business days’ written notice of the venue of any meeting to every member of the creditors’ committee (or their representative designated for that purpose) unless in any case the requirement of notice has been waived by or on behalf of any member. Waiver may be signified either at or before the meeting.

(6) The FCA must also be given the notice in paragraph (5).

(7) Where the administrator has determined that a meeting should be conducted and held in the manner referred to in rule 78, the notice period mentioned in paragraph (5) is seven business days.

The chair at meetings

70

(1) The chair at any meeting of the creditors’ committee must be the administrator, or a person appointed by the administrator in writing to act.

(2) A person so appointed 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.

Quorum

71

A meeting of the creditors’ committee is duly constituted if due notice of it has been given to all the members, and at least two members are present or represented.

Creditors’ committee members’ representatives

72

(1) A member of the creditors’ committee may, in relation to the business of the creditors’ committee, be represented by another person duly authorised by the member for that purpose.

(2) A person acting as a representative of a creditors’ committee member must hold a letter of authority entitling them so to act (either generally or specially) and authenticated by or on behalf of the creditors’ committee-member.

(3) For the purpose of paragraph (2), any proxy in relation to any meeting of creditors, or customers, or creditors and customers must, unless it contains a statement to the contrary, be treated as a letter of authority to act generally, authenticated by or on behalf of the creditors’ committee-member.

(4) The chair at any meeting of the creditors’ committee may call on a person claiming to act as a creditors’ committee-member’s representative to produce the letter of authority, and may exclude that person if it appears that their authority is deficient.

(5) No member may be represented by—

(a) another member of the creditors’ committee,

(b) a person who is at the same time representing another creditors’ committee member,

(d) an undischarged bankrupt,

(e) a disqualified director,

(f) a person whose estate has been sequestrated and who has not been discharged,

(g) a person who has granted a trust deed for the benefit of creditors,

(h) a person who has made a composition with creditors,

(i) a person to whom a moratorium period under a debt relief order applies,

(j) a person who is subject to a bankruptcy restrictions order (including an interim order), a bankruptcy restrictions undertaking, a debt relief restrictions order (including an interim order) or a debt relief restrictions undertaking.

(6) Where a member’s representative authenticates any document on the member’s behalf, the fact that the representative so authenticates must be stated below the authentication.

Resignation

73

A member of the creditors’ committee may resign by notice in writing delivered to the administrator.

Termination of membership

74

(1) Membership of the creditors’ committee is automatically terminated if the member—

(a) becomes bankrupt or that person’s estate is sequestrated,

(b) grants a trust deed for the benefit of creditors,

(d) is a person to whom a moratorium under a debt relief order applies,

(e) at three consecutive meetings of the creditors’ committee is neither present nor represented (unless at the third of those meetings it is resolved that this rule is not to apply in that member’s case),

(f) subject to paragraph (3), if voted onto the creditors’ committee under rule 67 by the creditors of the institution, ceases to be a creditor and a period of three months has elapsed from the date that that member ceased to be a creditor or is found never to have been a creditor, or

(g) subject to paragraph (4), if voted onto the creditors’ committee under rule 67 by the customers of the institution, has had all relevant funds claims settled (subject to there being an identified shortfall claim or any amounts being retained by the administrator under rule 109(2)(d)), or is found never to have been a customer.

(2) If the cause of termination is the member’s bankruptcy or their estate is sequestrated, their trustee in bankruptcy or the trustee in sequestration must replace them as a member of the creditors’ committee.

(3) A person to whom paragraph (1)(f) applies must not have their membership terminated if the following conditions are met—

(a) that person is also a customer of the institution,

(b) that person has not had all relevant funds claims settled (subject to there being an identified shortfall claim or any amount being retained by the administrator under rule 109(2)(d)),

but the administrator may require that person to resign if the administrator thinks that the make-up of the creditors’ committee does not reflect all parties with an interest in the achievement of the special administration objectives.

(4) A person to whom paragraph (1)(g) applies must not have their membership terminated if they are also a creditor of the institution but the administrator may require them to resign if the administrator thinks that the make-up of the creditors’ committee does not reflect all parties with an interest in the achievement of the special administration objectives.

Removal

75

(1) A member of the creditors’ committee may be removed by resolution at a meeting of creditors and customers, provided that at least fourteen days’ notice has been given of the intention to move that resolution.

(2) The resolution in paragraph (1) will be voted on only by the relevant class of voter in respect of the member to be removed.

Vacancies

76

(1) The following applies if there is a vacancy in the membership of the creditors’ committee.

(2) The vacancy need not be filled if the administrator and a majority of the remaining members of the creditors’ committee so agree, provided that—

(a) the total number of members does not fall below three,

(b) the administrator thinks that the make-up of the creditors’ committee will continue to reflect all parties with an interest in the achievement of the special administration objectives.

(3) The administrator may appoint a person (being qualified under these Rules to be a member of the creditors’ committee) from the same class of voters as the previous member to fill the vacancy, if—

(a) a majority of the other members of the creditors’ committee who are from the same class of voters agree to the appointment,

(b) the person concerned consents to act.

Procedure at meetings

77

(1) At any meeting of the creditors’ committee, each member of it (whether present or represented) has one vote, and a resolution is passed when a majority of the members present or represented have voted in favour of it.

(2) Every resolution passed must be recorded in writing and authenticated by the chair, either separately or as part of the minutes of the meeting, and the record must be placed in the sederunt book.

Remote attendance at meetings of creditors’ committee

78

(1) This rule applies to any meeting of a creditors’ committee held under these Rules.

(2) Where the administrator considers it appropriate, the meeting may be conducted and held in such a way that persons who are not present together at the same place may attend it.

(3) Where a meeting is conducted and held in the manner referred to in paragraph (2), a person attends the meeting if that person is able to exercise any rights which that person may have to speak and vote at the meeting.

(4) For the purposes of this rule—

(a) a person is able to exercise the right to speak at a meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting,

(b) a person is able to exercise the right to vote at a meeting when—

(i) that person is able to vote, during the meeting, on resolutions or determinations put to the vote at the meeting,

(ii) that person’s vote can be taken into account in determining whether or not such resolutions or determinations are passed at the same time as the votes of all the other persons attending the meeting.

(5) Where a meeting is to be conducted and held in the manner referred to in paragraph (2), the administrator must make whatever arrangements the administrator considers appropriate to—

(a) enable those attending the meeting to exercise their rights to speak or vote,

(b) ensure the identification of those attending the meeting and the security of any electronic means used to enable attendance.

(6) Any requirement under these Rules to specify a place for the meeting may be satisfied by specifying the arrangements the administrator proposes to enable persons to exercise their rights to speak or vote where in the reasonable opinion of the administrator—

(a) a meeting will be attended by persons who will not be present together at the same place,

(b) it is unnecessary or inexpedient to specify a place for the meeting.

(7) In making the arrangements referred to in paragraph (5) and in forming the opinion referred to in paragraph (6)(b), the administrator must have regard to the legitimate interests of the creditors’ committee members or their representatives attending the meeting in the efficient despatch of the business of the meeting.

(8) The administrator must specify a place for the meeting if—

(a) the notice of a meeting does not specify a place for the meeting,

(b) the administrator is requested in accordance with rule 79 to specify a place for the meeting,

Procedure for requests that a place for a meeting should be specified

79

(1) This rule applies to a request to the administrator of a meeting under rule 78 to specify a place for the meeting.

(2) The request must be made within five business days of the date on which the administrator sent the notice of the meeting in question.

(3) Where the administrator considers that the request has been properly made in accordance with this rule, the administrator must—

(a) give notice to all those previously given notice of the meeting—

(i) that it is to be held at a specified place,

(ii) as to whether the date and time are to remain the same or not,

(b) set a venue (including specification of a place) for the meeting, the date of which must be not later than seven business days after the original date for the meeting,

(4) The notices required by paragraphs (3)(a) and (3)(c) may be given at the same or different times.

(5) Where the administrator has specified a place for the meeting in response to a request to which this rule applies, the chair of the meeting must attend the meeting by being present in person at that place.

Resolutions of creditors’ committees by post

80

(1) The administrator may seek to obtain the agreement of members of the creditors’ committee to a resolution by delivering to every member of the creditors’ committee (or designated representative) a copy of the proposed resolution.

(2) Where the administrator makes use of this procedure, the administrator must notify each member or their representative of each proposed resolution on which a decision is sought.

(3) The FCA must also be notified of each proposed resolution under this rule.

(4) Any member of the creditors’ committee may, within seven business days of the date of the administrator notifying them of a resolution, require the administrator to call a meeting of the creditors’ committee to consider matters raised by the resolution.

(5) In the absence of such a request, the resolution is deemed to have been passed by the creditors’ committee if and when the administrator is notified in writing by a majority of the members that they agree with the resolution.

(6) A copy of every resolution passed under this rule and a note that the creditors’ committee’s concurrence was obtained must be filed in the sederunt book.

Information from administrator

81

(1) Where the creditors’ committee resolves to require the attendance of the administrator under paragraph 57(3)(a), the notice to the administrator must be in writing, authenticated by the majority of the members of the creditors’ committee for the time being.

(2) A member’s authentication under paragraph (1) may be made by that member’s representative.

(3) The meeting at which the administrator’s attendance is required must be fixed by the creditors’ committee for a business day, and must be held at such time and place as the administrator determines.

(4) The administrator must notify the FCA of the time and place of the meeting.

(5) Where the administrator so attends, the members of the creditors’ committee may elect any one of their number to be chair of the meeting, in place of the administrator or the administrator’s nominee.

Expenses of members

82

(1) The administrator must pay any reasonable travelling expenses directly incurred by members of the creditors’ committee or their representatives in relation to their attendance at the creditors’ committee’s meetings, or otherwise on the creditors’ committee’s business.

(2) Where the expenses referred to in paragraph (1) are incurred by a creditor member of the creditors’ committee, the expenses will be paid out of assets of the institution as an expense of the special administration in the order of priority of payments laid down by rule 95.

(3) Where the expenses referred to in paragraph (1) are incurred by a customer member of the creditors’ committee, the expenses will be paid out of the relevant funds as an expense of the special administration in the order of priority of payments laid down by rule 96.

(4) Paragraph (1) does not apply to any meeting of the creditors’ committee held within six weeks of a previous meeting, unless the meeting in question is called at the instance of the administrator.

Members dealing with the institution

83

(1) Membership of the creditors’ committee does not prevent a person from dealing with the institution while it is in special administration, provided that any transactions in the course of such dealings are in good faith and for value.

(2) The court may, on the application of any person interested, set aside any transaction which appears to it to be contrary to the requirements of this rule, and may give such consequential directions as it thinks just for compensating the institution for any loss which it may have incurred in consequence of the transaction.

Formal defects

84

The acts of the creditors’ committee established for a special administration are valid despite any defect in the appointment, election or qualifications of any member of the creditors’ committee or any creditors’ committee-member’s representative or in the formalities of its establishment.

CHAPTER 9 — Progress reports

Content of progress report

85

(1) A progress report must include—

(a) a statement that the special administration order was made by the court and the court reference number,

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

(d) the date of appointment of the administrator and (subject to paragraph (6)) details of any changes in the administrator since the previous report,

(e) where there are joint administrators, details of the apportionment of functions,

(f) whether the FCA have given a direction under regulation 38 and whether that direction has been withdrawn,

(g) details of progress during the period of the report in accordance with paragraph (2) below,

(h) details of any assets of the institution that remain to be realised,

(i) details of whether a bar date has been set and progress made in pursuit of Objective 1 of the special administration objectives,

(j) where no distribution plan has been approved by the court, how the administrator proposes that the expenses of the special administration, to be paid out of the relevant funds in accordance with Part 4, are to be allocated where the institution has more than one asset pool,

(k) where a distribution is to be made to creditors in respect of an accounting period, the scheme of division,

(l) any other relevant information for the creditors or the customers.

(2) The details of the progress during the period of the report must include—

(a) a receipts and payments account stating what assets of the institution have been realised, for what value and what payments have been made to creditors, in the form of a summary showing—

(i) receipts and payments during the relevant accounting period, or

(ii) where the administrator has ceased to act, receipts and payments during the period from the end of the last accounting period to the time when the administrator ceased to act (or, where the administrator has made no previous progress report, receipts and payments in the period since the administrator’s appointment), or

(b) where—

(i) no claim for outlays and remuneration is submitted under rule 129, or

(ii) a claim for outlays and remuneration is submitted under rule 129 but no determination fixing the amount of outlays and remuneration in accordance with rule 129(8) has been made in respect of such a claim—

(aa) a receipts and payments account which meets the requirements of paragraph (2)(a),

(bb) an estimate of the remuneration due to the administrator during the accounting period together with the basis or bases set out in rule 129(2) on which the estimate is based,

(cc) where remuneration due is not yet determined from the immediately preceding accounting period, an estimate of the remuneration due during that period,

(dd) any outlays incurred,

(c) the receipts and payments account must include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A of the IA 1986.

(3) Where the basis for the remuneration is a set amount under rule 129(2)(c), it may be shown as that amount without any apportionment to the period of the report.

(4) Where the administrator has made a statement of pre-administration costs under rule 24(2)(p)—

(a) if they are approved under rule 97 the first progress report after the approval must include a statement setting out the date of the approval and the amounts approved,

(b) each successive report, so long as any of the costs remain unapproved, must include a statement—

(i) of any steps taken to get approval, or

(ii) that the administrator has decided, or (as the case may be) another insolvency practitioner entitled to seek approval has told the administrator of that practitioner’s decision, not to seek approval.

(5) A change in administrator is only required to be shown in the next report after the change.

(6) Where the current administrator is seeking repayment of pre-administration expenses from a former administrator, the change in office-holder must be noted in each report until the claim is settled.

Sending a progress report

86

(1) The administrator must, within six weeks of the end of each accounting period and within six weeks of that person ceasing to act as administrator, send a copy of the progress report—

(a) to the creditors and to the customers,

(b) to the court,

(2) For the purposes of these Rules, except for Part 7, “accounting period” in relation to a special administration shall be construed as follows—

(a) the first accounting period is the period of six months beginning with the date on which the institution entered special administration,

(b) any subsequent accounting period is the period of six months beginning with the end of the last accounting period.

(3) The court may, on the administrator’s application, extend the period of six weeks mentioned in paragraph (1), or make such other order in respect of the content of the report as it thinks just.

(4) An administrator who fails to send a progress report within the time periods referred to in paragraph (1) is guilty of an offence.

(5) This rule is without prejudice to the requirements of Part 7.

CHAPTER 10 — Proxies and corporate representation

Definition of proxy

87

(1) For the purposes of these Rules, a “proxy” is a document made by a creditor, customer, member or contributory (the “principal”) which directs or authorises another person (“the proxy-holder”) to act as the representative of the principal at one or more meetings by speaking, voting on, abstaining from, or proposing resolutions.

(2) A proxy-holder must be an individual aged 18 or over.

(3) Proxies are for use at meetings called under the Regulations or these Rules.

(4) Only one proxy-holder may be appointed by a principal for any one meeting at which the principal wants to be represented, but the principal may specify one or more proxy-holders in the alternative, in the order in which they are named in the proxy.

(5) Without prejudice to paragraph (4), a proxy for a particular meeting may be given to whoever is to be the chair of the meeting.

(6) Where a proxy appoints the chair (howsoever described in the proxy) as proxy-holder, the chair may not refuse to be the proxy-holder.

(7) A proxy may be—

(a) a specific proxy which relates to a specific meeting, or

(b) a continuing proxy for the duration of the special administration.

(8) A proxy is to be treated as a specific proxy for the meeting which is identified in the proxy unless it states that it is a continuing proxy for the duration of the special administration.

(9) A specific proxy must—

(a) direct the proxy-holder how to act at the meeting by giving specific instructions,

(b) authorise the proxy-holder to act at the meeting without specific instructions, or

(10) A continuing proxy must authorise the proxy-holder to attend, speak, vote on or abstain from voting on, or propose resolutions without giving the proxy-holder any specific instructions how to do so.

(11) A continuing proxy may be superseded by a proxy for a specific meeting or withdrawn by a written notice to the administrator.

Issue and use of forms

88

(1) Forms of proxy must be sent out with every notice calling a meeting to be held in the special administration and such form must be a “blank proxy”.

(2) A “blank proxy” is a document which—

(a) complies with the requirements in this rule,

(b) when completed with the details specified in paragraph (4) will be a proxy as described in rule 87.

(3) A blank proxy must state that the principal named in the document (when completed) appoints a person who is named or identified as the proxy-holder of the principal.

(4) The specified details are—

(a) the name and address of the creditor, customer, member or contributory,

(b) either the name of the proxy-holder or the identification of the proxy-holder (such as the chair of the meeting or the administrator),

(i) for a specific meeting, which is identified in the proxy, or

(ii) a continuing proxy for the proceedings,and

(d) if the proxy is for a specific meeting, instructions as to the extent to which the proxy-holder is directed to vote in a particular way, to abstain or to propose any resolution.

(5) When it is delivered to the principal, a blank proxy must not contain the name or description of any person as proxy-holder, or instructions as to how a proxy-holder is to act.

(6) A blank proxy must have a note to the effect that the proxy may be completed with the name of the person or the chair of the meeting who is to be proxy-holder.

(7) A form of proxy must be authenticated by the principal, or by some person authorised by that principal (either generally or with reference to a particular meeting).

(8) If the form is authenticated by a person other than the principal, the nature of the person’s authority must be stated.

Use of proxies at meetings

89

(1) A proxy for a specific meeting must be delivered to the chair at or before the meeting.

(2) A continuing proxy must be delivered to the administrator and may be exercised by the proxy-holder at any meeting which begins after the proxy is delivered.

(3) A proxy given for a particular meeting may be used at any adjournment of that meeting but if a different proxy is given for use at a resumed meeting, that proxy must be delivered to the chair before the start of the resumed meeting.

(4) Where the administrator holds proxies to be used by the administrator as chair of a meeting, and some other person acts as chair, the other person may use the administrator’s proxies as if that person was the proxy-holder.

(5) Where a proxy directs a proxy-holder to vote for or against a resolution for the nomination or appointment of a person as the administrator, the proxy-holder may, unless the proxy states otherwise, vote for or against (as they think fit) any resolution for the nomination or appointment of that person jointly with another or others.

(6) A proxy-holder may propose any resolution which is one on which the proxy-holder would be entitled to vote if someone else proposed it.

(7) Where a proxy gives specific directions as to voting, this does not, unless the proxy states otherwise, preclude the proxy-holder from voting at their discretion on resolutions put to the meeting which are not dealt with in the proxy.

Retention of proxies

90

(1) Subject to paragraph (2), proxies used for voting at any meeting must be retained by the chair of the meeting.

(2) The chair must deliver the proxies, as soon as is reasonably practicable after the meeting, to the administrator (where the administrator is someone other than the chair).

(3) The administrator must retain all proxies in the sederunt book.

Right of inspection

91

(1) So long as proxies lodged with the administrator are in the administrator’s hands, the administrator must allow them to be inspected, at all reasonable times on any business day, by—

(a) the creditors, in the case of proxies used at a meeting of creditors or at a meeting of creditors and customers,

(b) the customers, in the case of proxies used at a meeting of customers or at a meeting of creditors and customers,

(c) the institution’s members or contributories, in the case of proxies used at a meeting of the institution or of its contributories.

(2) The reference in paragraph (1) to creditors or to customers is to persons who have submitted in writing a claim to be creditors or, as the case may be, customers of the institution, but does not include a person whose claim has been wholly rejected for purposes of voting, dividend or otherwise.

(3) The right of inspection given by this rule is also exercisable by the directors of the institution in special administration.

(4) Any person attending a meeting in the course of the special administration is entitled, immediately before or during the meeting, to inspect proxies or any statement of claim or documentary evidence of debt delivered in accordance with the notice convening the meeting sent or given, in accordance with directions contained in any notice convening the meeting, to the chair of that meeting or to any other person by a creditor, customer, member or contributory for the purpose of that meeting.

(5) This rule is subject to rule 190.

Proxy-holder with financial interest

92

(1) A proxy-holder must not vote in favour of any resolution which would—

(a) directly or indirectly place the proxy-holder, or any associate of the proxy-holder, in a position to receive any remuneration, fees or expenses out of the insolvent estate or the asset pool, or

(b) fix or change the amount of or the basis of any remuneration, fees or expenses receivable by the proxy-holder or any associate of the proxy-holder from the insolvent estate or the asset pool.

(2) However, a proxy-holder may vote for a resolution described in paragraph (1) if the proxy specifically directs the proxy-holder to vote in that way.

(3) Where the administrator is appointed as proxy-holder and that proxy is used under rule 89(4) by another person acting as chair, the administrator is deemed to be an associate of the person acting as chair.

Corporate representation

93

(1) Where a person is authorised to represent a corporation (other than as proxy-holder) at a meeting held under the Regulations or these Rules, that person must produce to the chair of the meeting a copy of the resolution from which that person’s authority is derived.

(2) The resolution must have been signed or subscribed (or in the case of an electronic document, authenticated) by or on behalf of the corporation in accordance with the Requirements of Writing (Scotland) Act 1995[^f00016], and the copy must be certified by the secretary or a director of the corporation to be a true copy.

(3) Nothing in this rule requires the authority of a person to authenticate a proxy on behalf of a principal which is a corporation to be in the form of a resolution of that corporation.

(4) In this rule “authenticated” has the meaning given in the Requirements of Writing (Scotland) Act 1995.

CHAPTER 11 — Disposal of charged property

Application to dispose of secured property

94

(1) This rule applies where the administrator applies to the court under paragraph 71 for authority to dispose of property which is subject to a security (other than a floating charge), or under paragraph 72 for authority to dispose of goods in the possession of the institution under a hire purchase agreement.

(2) The court must fix a venue for the hearing of the application, and the administrator must as soon as is reasonably practicable afterwards give notice of the venue to the person who is the holder of the security or the owner of the goods.

(3) If an order is made under paragraph 71 or 72, the court must deliver two copies of the order certified by the court to the administrator.

(4) The administrator must deliver—

(a) a certified copy of the order to the person who is the holder of the security or owner of the goods,

(b) a certified copy of the order to the registrar of companies.

(5) The administrator must place in the sederunt book a copy of any order granted under paragraph 71 or 72.

PART 4 — Expenses of the special administration

Expenses to be paid out of the institution’s assets

95

(1) Subject to rule 96, the expenses of the special administration to be paid out of the assets of the institution are payable in the following order of priority—

(a) expenses properly incurred by the administrator in performing the administrator’s functions in the special administration (other than unpaid pre-administration costs approved under rule 97 for work done in pursuit of Objectives 2 and 3),

(b) failure-related costs approved under regulation 42,

(d) the costs of the applicant for the special administration order and any person appearing on the hearing of the application,

(e) any amount payable to a person employed or authorised, under Chapter 1 of Part 3 of these Rules, to assist in the preparation of a statement of affairs or statement of concurrence,

(f) any allowance made, by order of the court, towards costs on an application for release from the obligation to submit a statement of affairs or statement of concurrence,

(g) any necessary disbursements incurred by the administrator in the course of the special administration (including any expenses incurred by members of the creditors’ committee or their representatives and allowed for by the administrator under rule 82, but not including any payment of corporation tax in circumstances referred to in sub-paragraph (j) below),

(h) the remuneration or emoluments of any person who has been employed by the administrator to perform any services for the institution, as required or authorised under the Regulations or these Rules,

(i) the administrator’s remuneration for services in pursuit of Objectives 2 and 3 the basis of which has been fixed under Chapter 1 of Part 8 of these Rules, and unpaid pre-administration costs approved under rule 97 for work done in pursuit of Objectives 2 and 3,

(j) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the institution (without regard to who the realisation is effected by).

(2) The priorities laid down by paragraph (1) of this rule are subject to the power of the court to make orders under paragraph (3) of this rule where the assets are insufficient to satisfy the liabilities.

(3) The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the expenses incurred in the special administration in such order of priority as the court thinks just.

(4) For the purposes of paragraph 99(3) and subject to rule 96, the former administrator’s remuneration and expenses shall comprise all those items set out in paragraph (1) of this rule.

Expenses to be paid out of the relevant funds

96

(1) The expenses of the special administration to be paid out of the relevant funds held by the institution are payable in the following order of priority—

(a) expenses properly incurred by the administrator in pursuing Objective 1 (other than unpaid pre-administration costs approved under rule 97 for work done in pursuit of Objective 1),

(b) any failure-related costs approved under regulation 42 to the extent that the institution’s assets are insufficient to satisfy such liabilities,

(c) any necessary disbursements incurred by the administrator in the course of the special administration specific to the achievement of Objective 1 (including any expenses incurred by customer members of the creditors’ committee or their representatives and allowed for by the administrator under rule 82 but not including any payment of corporation tax in circumstances referred to in rule 95(1)(j),

(d) the remuneration or emoluments of any person who has been employed by the administrator to perform any services for the institution specific to the achievement of Objective 1, as required or authorised under the Regulations or these Rules,

(e) the administrator’s remuneration the basis of which has been fixed under rule 129 and unpaid pre-administration costs approved under rule 97 in respect of the work done in pursuance of Objective 1.

(2) The priorities laid down by paragraph (1) of this rule are subject to the power of the court to make orders under paragraph (3) of this rule where there are insufficient relevant funds to satisfy the liabilities.

(3) The court may, in the event of the relevant funds being insufficient to satisfy the liabilities, make an order as to the payment out of the relevant funds of the expenses incurred in the special administration in such order of priority as the court thinks just.

(4) For the purposes of paragraph 99(3) the former administrator’s remuneration and expenses incurred in respect of the pursuit of Objective 1 shall comprise all those items set out in paragraph (1) of this rule.

(5) The “costs of distribution” referred to in regulation 18(5) comprise the expenses set out in this rule.

Pre-administration costs

97

(1) Where the administrator has made a statement of pre-administration costs under rule 24(2)(p), the creditors’ committee may determine whether and to what extent the unpaid pre-administration costs set out in the statement are approved for payment.

(2) Paragraph (3) applies if—

(a) there is no creditors’ committee,

(b) the creditors’ committee does not make the necessary determination, or

(c) the creditors’ committee makes the necessary determination, but the administrator or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient.

(3) When this paragraph applies, determination of whether and to what extent the unpaid pre-administration costs are approved for payment must be by resolution of—

(a) a meeting of customers where the pre-administration costs were incurred wholly in pursuance of Objective 1,

(b) a meeting of creditors where the pre-administration costs were incurred in pursuance of Objectives 2 and 3,

(c) a meeting of creditors and customers where the pre-administration costs were incurred in pursuance of Objective 1, Objective 2 and Objective 3.

(4) The administrator must call a meeting of the creditors’ committee or a meeting under paragraph (3) if so requested for the purposes of paragraphs (1) to (3) by another insolvency practitioner who has charged fees or incurred expenses as pre-administration costs, and the administrator must give notice of the meeting within twenty-eight days of receipt of the request.

(5) The administrator (where the fees were charged or expenses incurred by the administrator) or other insolvency practitioner (where the fees were charged or expenses incurred by that practitioner) may apply to the court for a determination of whether and to what extent the unpaid pre-administration costs are approved for payment if—

(a) there is no determination under paragraph (1) or (3),

(b) there is such a determination, but the administrator or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient.

(6) Paragraphs (2) to (4) of rule 130 apply to an application under paragraph (5) of this rule as they do to an application under paragraph (1) of that rule (references to the administrator being read as references to the insolvency practitioner who has charged fees or incurred expenses as pre-administration costs).

(7) Where the administrator fails to call a meeting of the creditors’ committee or a meeting under paragraph (3) in accordance with paragraph (4), the other insolvency practitioner may apply to the court for an order requiring the administrator to do so.

Allocation of expenses to be paid from the relevant funds

98

The administrator must set out, in the distribution plan under rule 109, how the administrator proposes that the expenses of the special administration, to be paid out of the relevant funds in accordance with this Chapter, are to be allocated where the institution has more than one asset pool.

PART 5 — Relevant funds claims

Content of relevant funds claim

99

(1) This rule applies to the submission of relevant funds claims.

(2) A person submitting a relevant funds claim must submit that claim in writing to the administrator.

(3) The relevant funds claim must—

(a) be made out by, or under the direction of, the claimant and must be authenticated by the claimant or a person authorised on its behalf,

(b) contain the claimant’s name and address,

(4) The relevant funds claim must include the following information to the extent that the information is known by the claimant—

(a) the amount of the relevant funds claim as at the time the institution entered special administration less any payments made after that date in relation to the relevant funds claim,

(b) details of how and when the debt was incurred by the institution including details of all PS or EMI contracts the claimant has entered into under which, at the time the relevant funds claim is submitted, liabilities are still owed from either the institution to the claimant or vice versa,

(5) Where a relevant funds claim does not include the information set out in paragraph (4)(a) or where such information differs from the information held by the institution, the administrator shall be entitled to rely on their and the institution’s own records to assess the amount of the relevant funds claim.

(6) The relevant funds claim must specify details of any documents by reference to which the relevant funds claim can be substantiated but, subject to paragraph (7), it is not essential that such documents be attached to the relevant funds claim or submitted with it.

(7) Where the administrator thinks it necessary for the purpose of substantiating the whole or any part of a relevant funds claim submitted, the administrator may—

(a) call for any document or other evidence to be produced,

(b) send a request in writing for further information from the claimant.

Debt in a foreign currency

100

(1) A relevant funds claim payable in a foreign currency must state the amount of the relevant funds claim in that currency.

(2) The administrator must convert all such relevant funds claims into sterling at a single rate for each currency determined by the administrator by reference to the exchange rates prevailing in the London market at the close of business on the date the institution entered special administration.

Costs of making a claim

101

Unless the court orders otherwise, every claimant under rule 99 bears the cost of making a relevant funds claim, including costs incurred in providing documents or evidence or responding to requests for further information.

New administrator appointed

102

(1) If a new administrator is appointed in place of another, the former administrator must as soon as is reasonably practicable transmit to the new administrator all relevant funds claims received, together with an itemised list of them.

(2) The new administrator must authenticate the list by way of receipt for the relevant funds claims and return it to the former administrator.

(3) From then on, all relevant funds claims submitted under rule 99 must be sent to and retained by the new administrator.

Admission and rejection of relevant funds claim

103

(1) The administrator may admit or reject a relevant funds claim in whole or in part.

(2) If the administrator rejects a relevant funds claim in whole or in part, the administrator must prepare a written statement of reasons for doing so, and deliver it as soon as is reasonably practicable to the claimant.

(3) The administrator must include the following information in the sederunt book—

(a) details of a decision of the administrator to accept a relevant funds claim (whether in whole or in part) under paragraph (1) including the amount of the claim accepted,

(b) details of the administrator’s reasons for rejecting a relevant funds claim (whether in whole or in part) under paragraph (2),

(d) any decision of the court on an application made under rule 106.

Appeal against decision on relevant funds claim

104

(1) If a claimant is dissatisfied with the administrator’s decision with respect to their relevant funds claim, that claimant may apply to the court for the decision to be reversed or varied.

(2) An application under paragraph (1) must be made within twenty-one days (or such other period as the administrator may agree or the court may order) of the claimant receiving the statement sent under rule 103.

(3) The applicant must give notice of an application under paragraph (1) to the FCA.

(4) Where application is made to the court under this rule, the court must fix a venue for the application to be heard.

(5) The applicant must send notice of the venue fixed by the court under paragraph (4) to—

(a) the administrator,

(b) the FCA.

(6) The administrator must, on receipt of the notice, lodge with the court the relevant funds claim, together (if relevant) with a copy of the statement sent under rule 103.

(7) After the application has been heard and determined, the documentation relating to the relevant funds claim must, unless the relevant funds claim has been wholly disallowed, be returned by the court to the administrator.

(8) The administrator is not personally liable for costs incurred by any person in respect of an application under this rule unless the court otherwise orders.

(9) Except with the permission of the court, the administrator must not make a distribution out of the asset pool so long as there is pending any application to the court to reverse or vary the administrator’s decision on a relevant funds claim, or to exclude a statement of claim or to reduce the amount claimed.

(10) If the court gives permission under paragraph (9), the administrator must make such provision in respect of the relevant funds claim in question as the court directs.

Withdrawal or variation of relevant funds claim

105

A relevant funds claim may at any time, with the agreement of the administrator, be withdrawn or varied as to the amount claimed.

Exclusion of relevant funds claim by the court

106

(1) The court may exclude a relevant funds claim or reduce the amount claimed—

(a) on the administrator’s application, where the administrator thinks that the relevant funds claim has been improperly admitted, or ought to be reduced,

(b) on the application of a creditor or customer, if the administrator declines to interfere in the matter.

(2) Where an application is made to the court under this rule, the court must fix a venue for the application to be heard.

(3) The applicant must send notice of the venue fixed by the court under paragraph (2)—

(a) in the case of an application by the administrator, to the claimant who made the relevant funds claim,

(b) in the case of an application by a customer or creditor, to the administrator and to the claimant who made the relevant funds claim (if the applicant is not the same customer).

(4) Except with the permission of the court, the administrator must not make a distribution out of the asset pool so long as there is pending any application to the court to reverse or vary the administrator’s decision on a relevant funds claim, or to reduce the amount claimed.

(5) If the court gives permission under paragraph (3), the administrator must make such provision in respect of the relevant funds claim in question as the court directs.

PART 6 — Objective 1

CHAPTER 1 — Setting a bar date and further notifications

Notice of the bar date

107

(1) This rule applies where the administrator sets a bar date for the submission of relevant funds claims as set out in regulation 20(1) and 21(1) (and for the purposes of this rule “bar date” includes a hard bar date).

(2) The administrator must give notice of the bar date—

(a) to each customer of whose relevant funds claim the administrator is aware and whom the administrator has a means of contacting,

(b) to each person whom the administrator believes has a right to assert a security interest or other entitlement over the asset pool and whom the administrator has a means of contacting.

(3) Notice of the bar date must also be sent to the FCA.

(4) Notice of the bar date—

(a) must be gazetted,

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

(5) In advertising the date under paragraph (4), the administrator must aim to ensure that the bar date comes to the attention of as many of those persons who are eligible to submit a relevant funds claim as the administrator considers practicable.

Notifying potential claimants after bar date has passed

108

(1) This rule applies where, after the bar date under regulation 20 has passed—

(a) there is evidence from—

(i) the records of the institution, or

(ii) information received by the administrator,

that there is a customer who is eligible to make a relevant funds claim but that the administrator has not received a relevant funds claim from that customer,

(b) the administrator has a means of contacting that customer.

(2) The administrator must send notice to that customer in writing stating that the administrator believes that customer is eligible to submit a relevant funds claim.

(3) The notice under paragraph (2) must state that—

(a) the administrator believes that that customer has a relevant funds claim,

(b) in making the distribution plan under rule 109, the administrator intends to calculate that customer’s relevant funds claim according to the information available to the administrator unless—

(i) that customer advises the administrator that it is not owed any relevant funds within fourteen business days of receipt of the notice or such longer period as may be agreed by the administrator,

(ii) that customer submits a relevant funds claim in accordance with rule 99 within fourteen business days of receipt of the notice or such longer period as may be agreed by the administrator, or

(iii) the court directs otherwise following an application made in accordance with rule 106.

CHAPTER 2 — Distribution plan

Distribution plan

109

(1) This rule applies where after setting a bar date under regulation 20, the administrator proposes to make a distribution from the asset pool.

(2) The administrator must draw up a distribution plan setting out—

(a) subject to paragraph (3), a schedule of dates on which a distribution is to be made from the asset pool (“a distribution”),

(b) the identity of the customers to whom a distribution is to be made,

(i) any liabilities owed by the customer to the institution under a PS or EMI contract,

(ii) any liabilities owed to the customer by the institution under a PS or EMI contract,

(iii) any shortfall claim of the customer,

(d) the amount to be retained by the administrator from the asset pool to pay the expenses of the special administration in accordance with rules 96 and 98 and how the retention of these amounts will affect the amount paid to settle relevant funds claims,

(e) the amount to be retained by the administrator from the asset pool by way of provision for any third party fees and expenses in respect of which a third party has a right of set-off or security right which takes priority over relevant funds claims in terms of regulation 18 and how the retention of these amounts will affect the amount paid to settle relevant funds claims.

(3) In setting out the schedule of dates for distributions, no date must be earlier than three months after the bar date.

(4) For the purpose of calculating the customer’s relevant funds claim so that the claim can be paid out (or partly paid out) before the contingency occurs or the dispute is resolved, the distribution plan must also set out—

(a) where any liabilities under paragraph (2)(c) are contingent, how the administrator intends to value the liability,

(b) where any liabilities are disputed, whether the administrator intends to make an assumption as to the outcome of the dispute.

(5) Where an institution has more than one asset pool, the administrator must draw up a distribution plan for each asset pool.

Approval by the creditors’ committee

110

(1) Where there is a creditors’ committee, the administrator must call a meeting of that committee to approve the distribution plan.

(2) The administrator must send the proposed distribution plan to each member of the creditors’ committee when sending out notice of the meeting.

(3) The creditors’ committee may approve the distribution plan with or without modification.

Approval by the court

111

(1) This rule applies where a meeting of the creditors’ committee has taken place in accordance with rule 110 or where there is no creditors’ committee.

(2) The administrator must apply to the court for approval of the distribution plan.

(3) The administrator must send a copy of the distribution plan together with details as to how to find out the venue of the hearing, to the following—

(a) all persons who have submitted a relevant funds claim,

(b) any customer notified under rule 108,

(4) The court, on receiving an application under paragraph (2) must fix the venue for the hearing and in fixing the venue must have regard to the desirability of the application being heard as soon as is reasonably practicable subject to the persons notified under paragraph (3) and the members of the creditors’ committee being able to attend and make representations at the hearing.

(5) On hearing the application under paragraph (2) the court may—

(a) make an order approving the distribution plan with or without modification if satisfied that—

(i) where rule 108 applies, the administrator has made the necessary notifications in accordance with that rule,

(ii) where there is a creditors’ committee, either that the committee has approved the distribution plan with or without modification or where the committee has been unable to approve the plan, the court has heard from the members of the committee or has given them an opportunity to explain why the committee were unable to approve the plan,

(b) dismiss the application,

(d) make any other order which the court thinks appropriate.

Treatment of late claimants

112

(1) This rule applies where the administrator receives a relevant funds claim after the bar date set under regulation 20.

(2) Where the relevant funds claim is not submitted in accordance with rule 99, the administrator must notify the claimant accordingly and ask them to resubmit their relevant funds claim in accordance with the relevant rule.

(3) Where the relevant funds claim is submitted in accordance with rule 99 after the bar date set under regulation 20 but before a distribution under either regulation 20 or a distribution plan, the administrator must, so far as is reasonably practicable, include within the distribution any such relevant funds claim in accordance with regulation 20(5).

(4) Where the relevant funds claim is submitted in accordance with rule 99 after a distribution under either regulation 20 or a distribution plan, the administrator must, so far as is reasonably practicable include within any subsequent distribution any such relevant funds claim in accordance with regulation 20(9).

(5) The administrator may amend the distribution plan to reflect distributions under this rule without the need for the plan to be approved again by either the court or the creditors’ committee.

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