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The Credit Institutions (Reorganisation and Winding up) Regulations 2004

Type Statutory-Instrument

Publication 2004-04-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

Reform history JSON API PDF

Made: 1st April 2004

Laid before Parliament: 5th April 2004

Coming into force: 5th May 2004

The Treasury, being a government department designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to measures relating to credit and financial institutions and to the taking of deposits or other repayable funds from the public, in exercise of the powers conferred by that section, hereby make the following Regulations:

PART 1 — General

Citation and commencement

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These Regulations may be cited as the Credit Institutions (Reorganisation and Winding up) Regulations 2004, and come into force on 5th May 2004.

Interpretation

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(1) In these Regulations—

“the 1986 Act” means the Insolvency Act 1986 ;

“the 2000 Act” means the Financial Services and Markets Act 2000 ;

“the 2006 Act” means the Companies Act 2006;

“the 1989 Order” means the Insolvency (Northern Ireland) Order 1989 ;

“administrator” has the meaning given by paragraph 13 of Schedule B1 to the 1986 Act , paragraph 14 of Schedule B1 to the 1989 Order, section 8(2) of the 1986 Act or Article 21(2) of the 1989 Order as the case may be;

“capital requirements regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012;

“claim” means a claim submitted by a creditor of a UK credit institution in the course of—a winding up,an administration, ora voluntary arrangement,with a view to recovering his debt in whole or in part, and includes 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);

“creditors' voluntary winding up” has the meaning given by section 90 of the 1986 Act or Article 76 of the 1989 Order as the case may be;

“debt”—in relation to a winding up or administration of a UK credit institution, has the meaning given by rule 14.1(3) of the Insolvency Rules or Article 5(1) of the 1989 Order except that where the credit institution is not a company, references in rule 14.1(3) or Article 5(1) to a company are to be read as references to the credit institution, andin a case where a voluntary arrangement has effect in relation to a UK credit institution, means a debt which would constitute a debt in relation to the winding up (not immediately preceded by an administration) of that credit institution, 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 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;in Scotland—in relation to a winding up of a UK credit institution, 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 credit institution, has the meaning given in rule 1.2 of the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 andin a case where a voluntary arrangement has effect in relation to a UK credit institution, 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 has effect as a reference to the date on which the voluntary arrangement had effect;

“the FCA” means the Financial Conduct Authority;

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

“the Insolvency Rules (Northern Ireland)” means the Insolvency Rules (Northern Ireland) 1991 ;

“liquidator”... includes any person or body appointed by the administrative or judicial authorities whose task is to administer winding-up proceedings in respect of a UK credit institution which is not a body corporate;

“officer”, in relation to a company, has the meaning given by section 1173(1) of the Companies Act 2006;

“the PRA” means the Prudential Regulation Authority;

“PRA-authorised person” has the meaning given in section 2B of the 2000 Act;

“recovery and resolution directive” means Directive 2014/59/EU of the European Parliament and of the Council of 15th May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms ..., as it had effect immediately before IP completion day;

“section 899 compromise or arrangement” means a compromise or arrangement sanctioned by the court in relation to a UK credit institution under section 899 of the 2006 Act but does not include a compromise or arrangement falling within section 900 (powers of court to facilitate reconstruction or amalgamation) or Part 27 (mergers and divisions of public companies) of that Act;

“stabilisation instrument” means any of the following— a “mandatory reduction instrument” made under section 6B of the Banking Act 2009;a “resolution instrument” made under section 12A of the Banking Act 2009;a “share transfer instrument” as defined in section 15 of the Banking Act 2009;a “share transfer order” as defined in section 16 of the Banking Act 2009;a “property transfer instrument” as defined in section 33 of the Banking Act 2009; ora “third country instrument” made under section 89H of the Banking Act 2009;

“supervisor” has the meaning given by section 7 of the 1986 Act or Article 20 of the 1989 Order as the case may be;

“UK credit institution” means an undertaking whose head office is in the United Kingdom with permission under Part 4 of the 2000 Act to accept deposits or to issue electronic money as the case may be but does not include—an undertaking which also has permission under Part 4 of the 2000 Act to effect or carry out contracts of insurance; ora credit union within the meaning of section 1 of the Credit Unions Act 1979 ;

“voluntary arrangement” means a voluntary arrangement which has effect in relation to a UK credit institution in accordance with section 4A of the 1986 Act or Article 17A of the 1989 Order as the case may be; and

“winding up” means—winding up by the court, ora creditors' voluntary winding up.

(1A) In the definition of “capital requirements regulation” the reference to Regulation (EU) No. 575/2013 is to be treated as a reference to that EU Regulation as it forms part of assimilated law.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In these Regulations, references to the law of insolvency of the United Kingdom include references to every provision made by or under the 1986 Act or the 1989 Order as the case may be; and in relation to partnerships, limited liability partnerships or building societies, references to the law of insolvency or to any provision of the 1986 Act or the 1989 Order are to that law as modified by the Insolvent Partnerships Order 1994 , the Insolvent Partnerships Order (Northern Ireland) 1995 , the Limited Liability Partnerships Regulations 2001 , the Limited Liability Partnerships Regulations (Northern Ireland) 2004 or the Building Societies Act 1986 (as the case may be).

(4) References in these Regulations to “accepting deposits” and a “contract of insurance” must be read with—

(a) section 22 of the 2000 Act;

(b) any relevant order made under that section; and

(5) For the purposes of the 2000 Act, functions imposed or falling on the FCA or the PRA under these Regulations shall be deemed to be functions under the 2000 Act.

PART 2 — Insolvency Measures and Proceedings: Jurisdiction in Relation to Credit Institutions

Prohibition against winding up etc. EEA credit institutions in the United Kingdom

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Schemes of arrangement

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Reorganisation measures and winding-up proceedings in respect of EEA credit institutions effective in the United Kingdom

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Confirmation by the court of a creditors' voluntary winding up

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PART 3 — Modifications of the Law of Insolvency: Notification and Publication

Modifications of the law of insolvency

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The general law of insolvency has effect in relation to UK credit institutions subject to the provisions of this Part.

Consultation of the Authority prior to a voluntary winding up

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(1) Where, on or after 5th May 2004, a UK credit institution (“the institution”) intends to pass a resolution to wind up the institution under paragraph (b) or (c) of section 84(1) of the 1986 Act or sub-paragraph (b) or (c) of Article 70(1) of the 1989 Order, the institution must give written notice of the resolution to the FCA and, if the institution is a PRA-authorised person, the PRA before it passes the resolution.

(2) Where notice is given under paragraph (1), the resolution may be passed only after the end of the period of five business days beginning with the day on which the notice was given.

Notification of relevant decision to the FCA and, if the institution is a PRA-authorised person, the PRA

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(1) Where on or after 5th May 2004 the court makes a decision, order or appointment of any of the following kinds—

(a) an administration order under paragraph 13 of Schedule B1 to the 1986 Act , paragraph 14 of Schedule B1 to the 1989 Order, section 8(1) of the 1986 Act or Article 21(1) of the 1989 Order;

(b) a winding-up order under section 125 of the 1986 Act or Article 105 of the 1989 Order;

(c) the appointment of a provisional liquidator under section 135(1) of the 1986 Act or Article 115(1) of the 1989 Order;

(d) the appointment of an administrator in an interim order under paragraph 13(1)(d) of Schedule B1 to the 1986 Act , paragraph 14(1)(d) of Schedule B1 to the 1989 Order, section 9(4) of the 1986 Act or Article 22(4) of the 1989 Order,

it must immediately inform the FCA and, if the institution is a PRA-authorised person, the PRA, or cause the FCA and, if the institution is a PRA-authorised person, the PRA to be informed, of the order or appointment which has been made.

(2) Where a decision with respect to the approval of a voluntary arrangement has effect, and the arrangement which is the subject of that decision is a qualifying arrangement, the supervisor must forthwith inform the FCA and, if the institution is a PRA-authorised person, the PRA of the arrangement which has been approved.

(3) Where a liquidator is appointed as mentioned in section 100 of the 1986 Act, paragraph 83 of Schedule B1 to the 1986 Act , paragraph 84 of Schedule B1 to the 1989 Order or Article 86 of the 1989 Order (appointment of liquidator in a creditors' voluntary winding up), the liquidator must inform the FCA and, if the institution is a PRA-authorised person, the PRA forthwith of his appointment.

(4) Where in the case of a members' voluntary winding up, section 95 of the 1986 Act (effect of company’s insolvency) or Article 81 of the 1989 Order applies, the liquidator must inform the FCA and, if the institution is a PRA-authorised person, the PRA forthwith that he is of that opinion.

(5) Paragraphs (1), (2) and (3) do not require the FCA to be informed in any case where the FCA was represented at all hearings in connection with the application in relation to which the decision, order or appointment is made.

(5A) Paragraphs (1), (2) and (3) do not require the PRA to be informed in any case where the PRA was represented at all hearings in connection with the application in relation to which the decision, order or appointment is made.

(6) For the purposes of paragraph (2), a “qualifying arrangement” means a voluntary arrangement which—

(a) varies the rights of creditors as against the credit institution and is intended to enable the credit institution, and the whole or any part of its undertaking, to survive as a going concern; or

(b) includes a realisation of some or all of the assets of the credit institution, with a view to terminating the whole or any part of the business of that credit institution.

(7) A supervisor, administrator or liquidator who fails without reasonable excuse to comply with paragraph (2), (3), or (4) (as the case may be) commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Notification to EEA regulators

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Withdrawal of authorisation

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(1) For the purposes of this regulation—

(a) a qualifying decision means a decision with respect to the approval of a voluntary arrangement where the voluntary arrangement includes a realisation of some or all of the assets of the credit institution with a view to terminating the whole or any part of the business of that credit institution;

(b) a qualifying order means—

(i) a winding-up order under section 125 of the 1986 Act or Article 105 of the 1989 Order; or

(ii) an administration order under paragraph 13 of Schedule B1 to the 1986 Act or paragraph 14 of Schedule B1 to the 1989 Order in the prescribed circumstances;

(i) the appointment of a provisional liquidator under section 135(1) of the 1986 Act or Article 115(1) of the 1989 Order; or

(ii) the appointment of a liquidator as mentioned in section 100 of the 1986 Act, Article 86 of the 1989 Order (appointment of liquidator in a creditors' voluntary winding up) or paragraph 83 of Schedule B1 to the 1986 Act or paragraph 84 of Schedule B1 to the 1989 Order (moving from administration to creditors' voluntary liquidation).

(2) The prescribed circumstances are where, after the appointment of an administrator, the administrator concludes that it is not reasonably practicable to achieve the objective specified in paragraph 3(1)(a) of Schedule B1 to the 1986 Act or paragraph 4(1)(a) of Schedule B1 to the 1989 Order.

(3) When the FCA or the PRA is informed of a qualifying decision, qualifying order or qualifying appointment, that authority will as soon as reasonably practicable exercise its power under section 55J of the 2000 Act to vary or to cancel the UK credit institution’s permission under Part 4 of that Act to accept deposits or to issue electronic money as the case may be.

Publication of voluntary arrangement, administration order, winding-up order or scheme of arrangement

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Honouring of certain obligations

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Notification to creditors: winding-up proceedings

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(1) When a relevant order or appointment is made, or a relevant decision is taken, in relation to a UK credit institution on or after 5th May 2004, the appointed officer must, as soon as is reasonably practicable, notify in writing all known creditors of that credit institution—

(a) of the matters mentioned in paragraph (4); and

(b) of the matters mentioned in paragraph (5).

(2) The appointed officer may comply with the requirement in paragraphs (1)(a) and the requirement in paragraph (1)(b) by separate notifications.

(3) For the purposes of this regulation—

(a) “relevant order” means—

(i) an administration order under paragraph 13 of Schedule B1 to the 1986 Act or paragraph 14 of Schedule B1 to the 1989 Order in the prescribed circumstances or an administration order made for the purposes set out in section 8(3)(b) or (d) of the 1986 Act or Article 21(3) (b) or (d) of the 1989 Order, as the case may be,

(ii) a winding-up order under section 125 of the 1986 Act (powers of the court on hearing a petition) or Article 105 of the 1989 Order (powers of High Court on hearing of petition),

(iii) the appointment of a liquidator in accordance with section 138 of the 1986 Act (appointment of a liquidator in Scotland), or

(iv) an order appointing a provisional liquidator in accordance with section 135 of that Act or Article 115 of the 1989 Order;

(b) a “relevant appointment” means the appointment of a liquidator as mentioned in section 100 of the 1986 Act or Article 86 of the 1989 Order (appointment of liquidator in a creditors' voluntary winding up); and

(4) The matters which must be notified to all known creditors in accordance with paragraph (1)(a) are as follows—

(a) that a relevant order or appointment has been made, or a relevant decision taken, in relation to the UK credit institution; and

(b) the date from which that order, appointment or decision has effect.

(5) The matters which must be notified to all known creditors in accordance with paragraph (1)(b) are as follows—

(a) if applicable, the date by which a creditor must submit his claim in writing;

(b) the matters which must be stated in a creditor’s claim;

(d) the person to whom any such claim or any observations on a claim must be submitted; and

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