The Payment and Electronic Money Institution Insolvency Regulations 2021
| Jurisdiction | UK Non-devolved |
| Citation | SI 2021/716 |
| Year | 2021 |
2021 No. 716
Financial Services And Markets
The Payment and Electronic Money Institution Insolvency Regulations 2021
Made 17th June 2021
Coming into force 8th July 2021
The Treasury make these Regulations in exercise of the powers conferred by—
(a) sections 233 and 234 of the Banking Act 20091as applied and modified by regulation 24A of, and paragraphs 2 and 3 of Schedule 2ZA to, the Electronic Money Regulations 20112(“EMR 2011”) and regulation 23A of, and paragraphs 2 and 3 of Schedule 3A to, the Payment Services Regulations 20173(“PSR 2017”), and section 259(1) of that Act, and
(b) in respect of regulation 49 (and regulations 1 to 4 so far as they relate to regulation 49), section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 20184.
The Treasury have consulted in accordance with section 235(3) of the Banking Act 2009 as applied and modified by regulation 24A of, and paragraph 4 of Schedule 2ZA to, the EMR 2011 and regulation 23A of, and paragraph 4 of Schedule 3A to, the PSR 2017.
A draft of these Regulations has been laid before and approved by a resolution of each House of Parliament in accordance with section 235(2) of the Banking Act 2009 as applied and modified by regulation 24A of, and paragraph 4 of Schedule 2ZA to, the EMR 2011 and regulation 23A of, and paragraph 4 of Schedule 3A to, the PSR 2017, and paragraph 1(3) of Schedule 7 to the European Union (Withdrawal) Act 2018.
Citation
1. These Regulations may be cited as the Payment and Electronic Money Institution Insolvency Regulations 2021.
Commencement
2. These Regulations come into force on the twenty-first day after the day on which they are made.
Extent
3.—(1) These Regulations extend to England and Wales and Scotland, subject as follows.
(2) Regulations 48 and 49 extend to England and Wales, Scotland and Northern Ireland.
(3) A modification made by Schedule 3 has the same extent as the provision modified.
(4) An amendment made by Schedule 4 has the same extent as the provision amended.
Overview
4.—(1) Regulations 7 to 48 and Schedules 1 to 4 make provision about the insolvency of payment institutions and electronic money institutions (“institutions”).
(2) Regulations 7 to 47 and Schedules 1 to 4 set out a special alternative procedure for the insolvency of institutions.
(3) The procedure is to be known as—
(a)
(a) payment institution special administration, where the institution is a payment institution, or
(b)
(b) electronic money institution special administration, where the institution is an electronic money institution.
(4) Regulation 48 applies with modifications various provisions of Part 24 of the Financial Services and Markets Act 20005(“FSMA 2000”) to institutions except in respect of special administration.
(5) Regulation 49 corrects a defect in an instrument relating to the United Kingdom’s withdrawal from the European Union and bank recovery and resolution.
Application: Scottish LLPs and partnerships
5. Regulations 7 to 47 do not apply to the insolvency of limited liability partnerships or partnerships formed under the law of Scotland.
Definitions
6. In these Regulations, the words and expressions in the first column of the Table have the meaning indicated in the second column—
Word or expression |
Meaning |
BA 2009 |
|
CA 2006 |
|
FSMA 2000 |
has the meaning given in regulation 4(4) |
IA 1986 |
|
SBEEA 2015 |
|
EMR 2011 |
Electronic Money Regulations 201111 |
IBSAR 2011 |
Investment Bank Special Administration Regulations 201112 |
PSR 2017 |
Payment Services Regulations 201713 |
administrator (except in the expression Schedule B1 administrator) |
person appointed under regulation 7 |
agency or distribution services (in the case of electronic money institutions) |
services provided by an agent or distributor within the meaning of regulation 2(1) of the EMR 2011 |
agency services (in the case of a payment institutions) |
services provided by an agent within the meaning of regulation 2(1) of the PSR 2017 |
asset pool (in the case of electronic money institutions) |
(a) in the case of funds received for the execution of payment transactions which are not related to the issuance of electronic money, see regulation 23(18) of the PSR 2017, or (b) in any other case, see regulation 24(4) of the EMR 2011 |
asset pool (in the case of payment institutions) |
see regulation 23(18) of the PSR 2017 |
authorised payment institution |
see regulation 2(1) of the PSR 2017 |
Authorities |
the Bank of England, the Treasury and the FCA |
contributory |
has the same meaning as in the IA 1986 (see section 79 of that Act) as applied and modified by these Regulations |
court |
(a) in England and Wales, the High Court, and (b) in Scotland, the Court of Session |
electronic money |
see regulation 2(1) of the EMR 2011 |
electronic money institution |
see regulation 2(1) of the EMR 2011 |
enactment |
includes— (a) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament, (b) an enactment contained in, or in an instrument made under, a Measure or Act of Senedd Cymru, and (c) any retained direct EU legislation |
fair |
has the same meaning as in Part 2 of the BA 2009 (see section 93(8) of that Act) |
FCA |
Financial Conduct Authority |
foreign property |
has the same meaning as in the BA 2009 (see section 39(2) of that Act) |
holder |
electronic money holder |
special administration insolvency rules |
rules made under section 411 of the IA 1986 as applied and modified by these Regulations to give effect to these Regulations |
institution |
has the meaning given in regulation 4(1) |
institution’s own bank accounts |
includes any account, other than a relevant funds account, opened by the administrator for the purposes of the special administration |
Objective 1 |
has the meaning given in regulation in 12(2) |
Objective 2 |
has the meaning given in regulation in 12(3) |
Objective 3 |
has the meaning given in regulation in 12(4) |
payment institution |
authorised payment institution or small payment institution |
payment services |
see regulation 2(1) of the PSR 2017 |
payment system |
has the same meaning as in the BA 2009 (see section 182 of that Act14) |
payment system operator |
has the same meaning as in the BA 2009 (see section 183 of that Act15) |
payment transaction |
see regulation 2(1) of the PSR 2017 |
PPTA |
has the meaning given in regulation 24(3) |
PS or EMI contract |
contract for payment services or electronic money issuance |
relevant funds (in the case of electronic money institutions) |
(a) in the case of funds received for the execution of payment transactions which are not related to the issuance of electronic money, see regulation 23(1) and (2) of the PSR 2017 (b) in any other case, see regulation 20(1) of the EMR 2011 |
relevant funds (in the case of payment institutions) |
see regulation 23(1) and (2) of the PSR 2017 |
relevant funds account |
account which an institution maintains in order to safeguard relevant funds |
relevant funds claim |
claim, of a user or holder, for the return of relevant funds |
reverse transfer |
has the meaning given in regulation 30(1)(a) |
safeguard (in the case of electronic money institutions) |
(a) in the case of relevant funds received for the execution of payment transactions which are not related to the issuance of electronic money, has the same meaning as in the PSR 2017 (see regulation 23 of those Regulations), or (b) in any other case, has the same meaning as in the EMR 2011 (see regulations 20 to 22 of those Regulations) |
safeguard (in the case of payment institutions) |
has the same meaning as in the PSR 2017 (see regulation 23 of those Regulations) |
Schedule B1 |
Schedule B1 to the IA 1986 |
Schedule B1 administration |
the administration procedure set out in Schedule B1 |
Schedule B1 administration order |
administration order made under Schedule B1 (see paragraph 10 of that Schedule) |
Schedule B1 administrator |
administrator appointed under Schedule B1 |
small electronic money institution |
see regulation 2(1) of the EMR 2017 |
small payment institution |
see regulation 2(1) of the PSR 2017 |
special administration (except in the expression investment bank special administration) |
payment institution special administration or electronic money institution special administration (see regulation 4(3)) |
special administration objectives |
Objective 1, Objective 2 and Objective 3 |
special administration order |
has the meaning given in regulation 7 |
statement of proposals |
statement of proposals drawn up by the administrator in accordance with— (a) paragraph 49 of Schedule B1 as applied and modified by these Regulations, or (b) where the FCA has given a direction, regulation 39 |
TA |
has the meaning given in regulation 24(2) |
transferee |
has the meaning given in regulation 24(2) |
user |
payment service user (see regulation 2(1) of the PSR 2017) |
voluntarily safeguard (in the case of small electronic money institutions) |
voluntarily safeguard pursuant to regulation 20(6) of the EMR 2011 and regulation 23(16) of the PSR 2017 |
voluntarily safeguard (in the case of small payment institutions) |
voluntarily safeguard pursuant to regulation 23(16) of the PSR 2017 |
Special administration order
7.—(1) A special administration order is an order appointing a person as the administrator of an institution.
(2) A person is eligible for appointment as administrator under a special administration order if they are qualified to act as an insolvency practitioner in relation to the institution.
(3) An appointment may be made only if the person has consented to act.
(4) For the purposes of these Regulations—
(a)
(a) an institution is “in special administration” while the appointment of the administrator has effect,
(b)
(b) an institution “enters special administration” when the appointment of the administrator...
To continue reading
Request your trial