The Investment Bank Special Administration (England and Wales) Rules 2011

Cited as:SI 2011/1301
Jurisdiction:England & Wales

2011No. 1301

FINANCIAL SERVICES AND MARKETS

INSOLVENCY

The Investment Bank Special Administration (England and Wales) Rules 2011

15thMay2011

23rdMay2011

30thJune2011

The Lord Chancellor makes the following Rules in the exercise of powers under sections 411(1A)(a), (2), (2C) and (3) of the Insolvency Act 1986( 1), as applied by the Investment Bank Special Administration Regulations 2011( 2).

The Treasury concur in the making of the Rules.

The Chancellor of the High Court (by the authority of the Lord Chief Justice under section 411(7) of the Insolvency Act 1986) concurs in the making of the Rules in so far as they affect court procedure.

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 Investment Bank Special Administration (England and Wales) Rules 2011.

Commencement

2. These Rules come into force on 30th June 2011.

Extent

3. These Rules extend to England and Wales only.

Interpretation

4.-(1) In these Rules-

"the 1986 Act" means the Insolvency Act 1986;

"the 2006 Act" means the Companies Act 2006( 3);

"the 2009 Act" means the Banking Act 2009( 4);

"business address" means the place where a person works;

"business day" means 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 under or by virtue of the Banking and Financial Dealings Act 1971( 5);

"certificate of service" means a certificate of service verified by a statement of truth;

"CPR" means the Civil Procedure Rules 1998( 6) and "CPR" followed by a Part or a rule number means the Part or rule with that number in those rules;

"file in court and file with the court" means deliver to the court for filing;

"financial contract" means a bilateral or multilateral contract entered into with the investment bank before it entered special administration, relating to transactions or positions of a financial nature, including contracts for the delivery or custody of client assets (but not including contracts which are purely administrative or contracts for services);

"the Gazette" means the London Gazette;

"gazetted" means advertised once in the Gazette;

"investment bank" has the meaning set out in section 232 of the 2009 Act( 7);

"market price" has the meaning set out in regulation 12(9);

"means of contacting" means being able to contact that person specifically;

"person connected with the investment bank" has the same meaning in respect of the investment bank as a person connected with a company in accordance with section 249 of the 1986 Act;

"practice direction" means a direction as to the practice and procedure of any court within the scope of the CPR;

"prescribed order of priority" means the order of priority of payments laid down by rule 134;

"prescribed part" has the same meaning as it does in section 176A(2)(a) of the 1986 Act( 8) and the Insolvency Act 1986 (Prescribed Part) Order 2003( 9);

"registered number" of the investment bank has the meaning set out in section 1066 of the 2006 Act;

"registrar of companies" means the registrar of companies for England and Wales;

"the Regulations" means the Investment Bank Special Administration Regulations 2011;

"resolution fund order" has the meaning set out in section 49(3) of the 2009 Act;

"special administration" means, unless otherwise stated, special administration, special administration (bank insolvency) or special administration (bank administration) as the case may be;

"standard contents" means-

(a) in relation to a notice to be gazetted, the contents specified in rules 305 and 306; and

(b) in relation to a notice to be advertised in any other way, the contents specified in rules 309 and 310;

"statement of truth" means a statement of truth in accordance with CPR Part 22; and

"witness statement" means 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) Expressions used both in these Rules and in the Regulations (including expressions used in the provisions of the 1986 Act applied by the Regulations) have, unless otherwise stated, the meaning set out in the Regulations.

(4) 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 1986 Act( 10), as applied by regulation 15.

(5) A reference to a provision of the 1986 Act, if that provision is listed in Table 1 or 2 in regulation 15, is, unless otherwise stated and subject to paragraph (5), a reference to that provision as applied by regulation 15.

(6) A reference to a provision of the 1986 Act being applied by regulation 15 in a special administration (bank administration), means that provision as applied by section 145 of the 2009 Act, together with the modifications (if any) set out in the table in paragraph 6 of Schedule 2 to the Regulations.

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

Application of rules

5.-(1) The rules apply as follows-

(a) Part 2, Chapter 1 applies where an application is made for a special administration order;

(b) Part 2, Chapter 2 applies where an application is made for a special administration (bank insolvency) order; and

(c) Part 2, Chapter 3 applies where an application is made for a special administration (bank administration) order.

(2) Unless otherwise stated, the remaining rules apply in respect of special administration, special administration (bank insolvency) and special administration (bank administration).

PART 2

Application for Order

CHAPTER 1

Application for special administration order

Content of application

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

(2) The application must state-

(a) the full name and registered number of the investment bank;

(b) any other trading names;

(c) the investment bank's date of incorporation;

(d) the investment bank's nominated capital and the amount of capital paid up;

(e) the address of the investment bank's registered office;

(f) an email address for the investment bank;

(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 6(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;

(c) giving details of the person's (or each person's) qualification to act as an insolvency practitioner; and

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

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 investment bank or one of its directors, the witness statement shall be made by one of its directors or the company secretary of the investment bank, stating that they make it on behalf of the investment bank or, as the case may be, on behalf of the directors;

(b) a creditor or a contributory of the investment bank, the witness statement shall 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 FSA, 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 5(1)(a) to (e), the witness statement shall be made by a person acting under the authority of all the applicants.

(3) The witness statement shall-

(a) set out the reasons by which the applicant believes the ground in regulation 6 on which the application is based is satisfied;

(b) state the investment bank's current financial position, specifying (to the best of the applicant's knowledge and belief) the investment bank's assets and liabilities, including contingent and prospective liabilities;

(c) specify any security known or believed to be held by the creditors of the investment bank;

(d) specify the amount of client assets held by the investment bank 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 in court together with enough copies of the application and accompanying documents for service and proof of service under rule 10.

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

(3) In fixing the venue the court shall have regard to-

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

(b) the need for the investment bank's representatives to be able to reach the venue in time for the hearing.

(4) Each of the copies filed-

(a) shall have the seal of the court applied to it;

(b) shall be endorsed with the date and time of filing;

(c) shall be endorsed with the venue for the hearing of the application.

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