The Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019

Publication Date:January 01, 2019

2019No. 755

FINANCIAL SERVICES AND MARKETS

INSOLVENCY

The Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019

Made29thMarch2019

Laid before Parliament1stApril2019

Coming into force23rdApril2019

The Treasury make the following Regulations, except regulation 8, in exercise of the powers conferred by section 2(2) of the European Communities Act 1972( 1).

The Treasury are designated( 2) for the purposes of the European Communities Act 1972 in relation to—

(a) measures relating to collateral security provided to the central banks of member States or to the European Central Bank;

(b) the insolvency of insurers; and

(c) financial services.

The Treasury, with the consent of the Secretary of State, make regulation 8 in exercise of the power conferred by section 360 of the Financial Services and Markets Act 2000( 3).

Citation and commencement

1. These Regulations may be cited as the Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019 and come into force on 23rd April 2019.

Amendment of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999

2.—(1) The Financial Markets and Insolvency (Settlement Finality) Regulations 1999( 4) are amended as follows.

(2) In regulation 14 (proceedings of designated system take precedence over insolvency proceedings), in paragraph (5)(a)(ii)—

(a) for “Rules 4.30(3) and 4.218(2)(b) of the Insolvency Rules 1986( 5) substitute “rules 6.42(2)(b) and 7.38(3) of the Insolvency (England and Wales) Rules 2016( 6); and

(b) for “rule 4.5(3) of the Insolvency (Scotland) Rules 1986”( 7) substitute “rule 5.9(4) of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018( 8).

(3) In regulation 15 (net sum payable on completion of action taken under default arrangements), in paragraph (2)(b) for “Rule 2.85( 9) of the Insolvency Rules 1986” substitute “rule 14.24 of the Insolvency (England and Wales) Rules 2016”.

Amendment of the Financial Collateral Arrangements (No. 2) Regulations 2003

3.—(1) The Financial Collateral Arrangements (No. 2) Regulations 2003( 10) are amended as follows.

(2) In regulation 12 (close-out netting provisions to take effect in accordance with their terms) for paragraph (4) substitute—

“(4) The following provisions of the Insolvency (England and Wales) Rules 2016, or, in Scotland, any rule of law with the same or similar effect to the effect of these Rules, do not apply to a close-out netting provision unless paragraph (2)(a) applies—

(a) in rule 14.24 (administration: mutual dealings and set-off), in paragraph (6), in the definition of “mutual dealings”, paragraphs (a) and (d); and

(b) in rule 14.25 (winding up: mutual dealings and set-off), in paragraph (6), in the definition of “mutual dealings”, paragraph (c).

(4A) Rules 2.086(2)(a) and (d) and 4.096(2)(c) of the Insolvency Rules (Northern Ireland) 1991( 11) (mutual credits and set off) do not apply to a close-out netting provision unless paragraph (2)(a) applies.”.

(3) In regulation 14 (modification of the Insolvency Rules 1986 and the Insolvency Rules (Northern Ireland) 1991)—

(a) for “rule 4.91 (liquidation), or rule 2.86 (administration)( 12) of the Insolvency Rules 1986 (debt in foreign currency)” substitute “rule 14.21 of the Insolvency (England and Wales) Rules 2016 (debts in foreign currency)”; and

(b) in the heading for “Insolvency Rules 1986” substitute “Insolvency (England and Wales) Rules 2016”.

(4) In regulation 15 (modification of the Insolvency (Scotland) Rules 1986)—

(a) for “rules 4.16 and 4.17 of the Insolvency (Scotland) Rules 1986 and the provisions of the Bankruptcy (Scotland) Act 1985 referred to in those rules and such rules and provisions as applied by rule 2.41 of the Insolvency (Scotland) Rules 1986” substitute “rule 7.25 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 and rule 3.114 of the Insolvency (Scotland) Company Voluntary Arrangements and Administration Rules 2018”( 13); and

(b) in the heading for “Insolvency (Scotland) Rules 1986” substitute “Insolvency (Scotland) (Receivership and Winding up) Rules 2018 and the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018”.

Amendment of the Insurers (Reorganisation and Winding Up) Regulations 2004

4.—(1) The Insurers (Reorganisation and Winding Up) Regulations 2004( 14) are amended as follows.

(2) In regulation 2(1) (interpretation)—

(a) in the definition of “claim” for the words from “proof of debt” to the end substitute “a proof within the meaning given in rule 1.2 of the Insolvency Rules, a proof of debt within the meaning given in Rule 4.079(4) of the Insolvency Rules (Northern Ireland) or in Scotland a claim made in accordance with rule 7.16 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 (in relation to a winding up) or rule 3.105 of the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 (in relation to an administration)”;

(b) in the definition of “debt”—

(i) in paragraph (a)(i) for “Rule 13.12( 15)” substitute “rule 14.1(3)”;

(ii) for paragraph (a)(ii) substitute—

“(ii) in a case where a voluntary arrangement has effect in relation to a UK insurer, means a debt which would constitute a debt in relation to the winding up (not immediately preceded by an administration) of that insurer, except that in paragraph (c) of the definition of “relevant date” in rule 14.1(3) of the Insolvency Rules and in paragraph (1A) of Article 5 of the 1989 Order( 16) the reference to the date on which the company went into liquidation has effect as a reference to the date on which the voluntary arrangement had effect;”;

(iii) for paragraph (b)(i) substitute—

“(i) in relation to a winding up of a UK insurer, shall be interpreted in accordance with rule 7.22 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018, and, in relation to an administration of a UK insurer, has the meaning given in rule 1.2 of the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018,”;

(iv) for paragraph (b)(ii) substitute—

“(ii) in a case where a voluntary arrangement has effect in relation to a UK insurer, means a debt which would constitute a debt in relation to the winding up (not immediately preceded by an administration) of that insurer, except that references in rule 7.22 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 to the date on which the company went into liquidation have effect as a reference to the date on which the voluntary arrangement had effect;”; and

(c) for the definition of “the Insolvency Rules” substitute—

““the Insolvency Rules” means the Insolvency (England and Wales) Rules 2016;”;

(d) omit the definition of “the Insolvency (Scotland) Rules”.

(3) In regulation 7 (confirmation by the court of a creditors' voluntary winding up)—

(a) in paragraph (1) for “Rule 7.62( 17)” substitute “Rule 21.4”; and

(b) for paragraph (2) substitute—

“(2) For the purposes of this regulation, rule 21.4 of the Insolvency Rules has effect as if after paragraph (2) there were inserted—

“(2A) Where the company is a UK insurer (within the meaning given in regulation 2(1) of the Insurers (Reorganisation and Winding Up) Regulations 2004), paragraph

(2) does not apply, but the liquidator may apply to court for an order confirming the winding up as a creditors' voluntary winding up for the purposes of Articles 274 and 280 of the Solvency 2 Directive( 18).”.

(3) For the purposes of this regulation, rule 7.56 of the Insolvency Rules (Northern Ireland) has effect as if for paragraph (1) there were substituted—

“(1) Where a UK insurer (within the meaning given in regulation 2(1) of the Insurers (Reorganisation and Winding Up) Regulations 2004) has passed a resolution for voluntary winding up and no declaration under Article 75 has been made, the liquidator may apply to the court for an order confirming the winding up as a creditors' voluntary winding up for the purposes of Articles 274 and 280 of the Solvency 2 Directive.”.”.

(4) In regulation 12 (notification to creditors: winding up proceedings)—

(a) in paragraph (9)—

(i) omit “Rule 4.74( 19) of the Insolvency Rules,”; and

(ii) for “or Rule 4.15(2) of the Insolvency (Scotland) Rules as applicable in cases where any of those rules applies” substitute “in cases where those rules apply”;

(b) in paragraph (10) for “Rule 2.3( 20)” substitute “rule 3.3”.

(5) In regulation 13 (submission of claims by EEA creditors), in paragraph (5)(a)—

(a) omit “Rule 4.74 of the Insolvency Rules,”; and

(b) omit “or rule 4.15(2) of the Insolvency (Scotland) Rules as the case may be”;

(6) In regulation 19 (application of Part 4: certain assets excluded from insolvent estate of UK insurer( 21)), in paragraph (2)(c)(i) for “Rule 13.8( 22)” substitute “rule 1.2”.

(7) In regulation 29 (composite insurers: general meetings of creditors), in paragraph (2), after “the Insolvency (Scotland) Rules” insert “1986”.

(8) In regulation 30 (composite insurers: apportionment of costs payable out of the assets), in paragraph (1)—

(a) for “Rule 4.218” substitute “rule 6.42 (general rule as to priority in creditors' voluntary winding up) or 7.108( 23) (general rule as to priority in winding up by the court)”; and

(b) for “rule 4.67 (order of priority of expenses of liquidation) of the Insolvency (Scotland) Rules” substitute “rule 7.28 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018”.

(9) In regulation 35 (application of Part 5: certain assets excluded from insolvent estate of UK insurer( 24)), in paragraph (2)(c) for “Rule 13.8” substitute “rule 1.2”.

Amendment of the Credit Institutions (Reorganisation and Winding up) Regulations 2004

5.—(1) The Credit Institutions (Reorganisation and Winding up) Regulations 2004( 25) are amended as follows.

(2) In regulation 2(1) (interpretation)—

(a) in the definition of “claim” for the words from “a...

To continue reading

Request your trial