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

Type Statutory-Instrument

Publication 2011-05-15

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Made: 15th May 2011

Laid before Parliament: 23rd May 2011

Coming into force: 30th June 2011

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[^f00003];

“the 2009 Act” means the Banking Act 2009[^f00004];

“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[^f00005];

“certificate of service” means a certificate of service verified by a statement of truth;

“CPR” means the Civil Procedure Rules 1998[^f00006] 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[^f00007];

“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[^f00008] and the Insolvency Act 1986 (Prescribed Part) Order 2003[^f00009];

“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— in relation to a notice to be gazetted, the contents specified in rules 305 and 306; and 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[^f00010], 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

(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;

(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;

(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;

(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;

Service of application

10

(1) The application shall be served on—

(a) the investment bank (if neither the investment bank nor its directors are the applicant);

(b) the person (or each of the persons) nominated for appointment as administrator;

(d) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement.

(2) Service under paragraph (1) must be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 9.

(3) Service of the application must be effected by the applicant, or their solicitor, or by a person instructed by the applicant or the solicitor, as soon as reasonably practicable before the hearing.

(4) Service shall be effected as follows—

(a) on the investment bank (subject to paragraph (5)), by delivering the documents to its registered office; and

(b) on any other person (subject to paragraph (6)) by delivering the documents to that person’s proper address.

(5) If delivery to the investment bank’s registered office is not practicable, service may be effected by delivery to its last known principal place of business in England and Wales.

(6) For the purposes of paragraph (4)(b), a person’s proper address is any which that person has previously notified to the applicant as their address for service, but if no address has been notified, service may be effected by delivery to that person’s usual or last known address.

(7) Delivery of documents to any place or address may be made by leaving them there or by electronic delivery in accordance with rule 295 (and where the document is sent electronically, it shall be sent with a read receipt and the message shall be deemed to be delivered when the message is read).

Proof of service

11

(1) Service of the application shall be verified by a witness statement specifying the date and time on which, and the manner in which, service was effected.

(2) The witness statement, with a sealed copy of the application exhibited to it, shall be filed with the court—

(a) as soon as is reasonably practicable; and

(b) in any event, before the hearing of the application.

Further notification

12

As soon as reasonably practicable after filing the application, the applicant must notify—

(a) any enforcement officer or other officer whom the applicant knows to be charged with effecting an execution or other legal process against the investment bank or its property;

(b) any person whom the applicant knows to have distrained against the investment bank or its property; and

The hearing

13

At the hearing of the application, any of the following may appear or be represented—

(a) the applicant;

(b) the investment bank;

(d) the person (or a person) nominated for appointment as administrator;

(e) any supervisor of a voluntary arrangement under Part 1 of the 1986 Act;

(f) any person who has given notice to the FSA in respect of the investment bank under regulation 8;

(g) the FSA; and

(h) with the permission of the court, any other person who appears to have an interest.

The special administration order

14

If the court makes a special administration order, the order shall state—

(a) the name and address of the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(d) the name of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Costs

15

If the court makes a special administration order, the following are payable as an expense of the special administration—

(a) costs of the applicant; and

(b) any other costs allowed by the court.

Notice of special administration order

16

(1) If the court makes a special administration order, it shall, as soon as reasonably practicable, send 3 sealed copies to the applicant.

(2) The applicant shall as soon as reasonably practicable, send a sealed copy to—

(a) the administrator; and

(b) the FSA (if not the applicant).

(3) If the court makes an order under regulation 7(1)(d), or any other order under regulation 7(1)(f), it shall give directions as to the persons to whom and how notice of that order is to be given.

CHAPTER 2 — Application for a special administration (bank insolvency) order

Filing of application

17

(1) The application for a special administration (bank insolvency) order, verified by witness statement in accordance with rule 21, shall be filed in court.

(2) There shall be filed with the application—

(a) a copy for service on the investment bank;

(b) a copy to be attached to the proof of service; and

(3) The court shall fix the venue, date and time for the hearing of the application and in doing so shall have regard to—

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

(b) the need to give the investment bank a reasonable opportunity to attend.

(4) Each of the copies issued to the applicant shall be sealed and be endorsed with the venue, date and time for the hearing.

(5) Any application filed in relation to an investment bank in respect of which there is in force a voluntary arrangement under Part 1 of the 1986 Act shall be filed in accordance with this rule, but a copy of that application shall also be sent to the court to which the nominee’s report was submitted, if that is not the same court.

Service of application

18

(1) The applicant shall serve the investment bank with a sealed copy of the application.

(2) The application shall be served on the investment bank by personal service at its registered office.

(3) In paragraph (2), “registered office” means—

(a) the place which is specified, in the investment bank’s statement delivered under section 9 of the 2006 Act as the intended situation of its registered office on incorporation; or

(b) if notice has been given by the investment bank to the registrar of companies under section 87 of the 2006 Act, the place specified in that notice or, as the case may be, in the last such notice.

(4) Service of the application at the registered office may be effected in any of the following ways—

(a) it may be handed to a person who there and then acknowledges that they are, or to the best of the server’s knowledge, information and belief are, a director or other officer, or employee, of the investment bank; or

(b) it may be handed to a person who there and then acknowledges that they are authorised to accept service of documents on the investment bank’s behalf; or

(c) in the absence of such person as is mentioned in sub-paragraphs (a) and (b), it may be deposited at or about the registered office in such a way that it is likely to come to the notice of a person attending the office.

(5) If for any reason it is impracticable to effect service as provided by paragraph (2) or (4), the application may be served in such other manner as the court may approve or direct.

(6) Application for permission of the court under paragraph (5) may be made without notice to the investment bank, stating in a witness statement what steps have been taken to comply with paragraph (2) or (4), and the reasons why it is impracticable to effect service as there provided.

(7) If the investment bank or its legal representatives fail to attend the hearing, the court may make the bank insolvency order in its absence if satisfied that the application has been served in accordance with this rule.

Proof of service

19

(1) Service of the application must be proved by a certificate of service.

(2) The certificate of service must be sufficient to identify the application served and must specify—

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

(b) the address of the registered office of the investment bank;

(d) the address of the Bank of England;

(e) whether the copy served was a sealed copy;

(f) the date on which service was effected; and

(g) the manner in which service was effected.

(3) Where substituted service has been ordered under rule 18(5), the certificate of service must have attached to it a sealed copy of the order.

(4) The certificate of service must be filed in court as soon as reasonably practicable after service.

Other persons to receive copy of application

20

(1) The applicant shall send 2 sealed copies of the application to—

(a) the proposed administrator;

(b) the Bank of England, (if not the applicant);

(d) the FSCS;

(e) any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act; and

(f) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (2).

(2) One copy shall be sent electronically as soon as practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the application is served on the investment bank.

(3) Any of the persons in paragraph (1) will have the right to attend and be heard at the hearing of the application.

Verification of application

21

(1) This rule applies where an application has been filed at the court under rule 17 above.

(2) A witness statement shall be attached to the application to state that the statements in the application are true, or are true to the best of the applicant’s knowledge, information and belief.

(3) The witness statement shall identify the person making the statement and shall 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 application.

Persons entitled to copy of application

22

(1) Every contributory or creditor or client of the investment bank is entitled to a copy of the application on request from the applicant.

(2) The applicant shall respond to any request for a copy of the application as soon as reasonably practicable after the application has been made on payment of the appropriate fee.

Certificate of compliance

23

(1) The applicant or the applicant’s solicitor shall, as soon as reasonably practicable before the hearing of the application, file in court a certificate of compliance with the rules relating to service.

(2) The certificate shall show—

(a) the date of the application;

(b) the date fixed for the hearing; and

(3) A witness statement made by the proposed administrator to the effect that—

(a) the person is qualified to act as an insolvency practitioner in accordance with section 390 of the 1986 Act[^f00011]; and

(b) the person consents to act as the administrator,

shall be filed in court with the certificate.

Leave for the applicant to withdraw

24

(1) The applicant may withdraw the application for a special administration (bank insolvency) order at any time before the hearing with the permission of the court.

(2) An application for permission under paragraph (1) may be made without notice.

(3) The court may grant permission on such terms as the court thinks fit.

Witness statement in opposition

25

(1) If the investment bank intends to oppose an application, it may (but need not) file a witness statement in opposition in court.

(2) A statement under paragraph (1) must be filed before the hearing of the application and a copy must be served on the applicant, before the hearing.

(3) The statement may be served on the applicant by personal service or by electronic means.

(4) The statement should also be sent to the persons in rule 20(1) before the hearing by personal service or by electronic means.

(5) The fact that the investment bank has not filed a statement under this rule shall not prevent it being heard at the hearing.

Making, transmission and advertisement of order

26

(1) The court shall not make a special administration (bank insolvency) order unless the person nominated to be appointed as the administrator in the application for the order has filed in court a witness statement under rule 23.

(2) When the order has been made, the court shall immediately send 5 sealed copies (or such larger number as the administrator may have requested) to the administrator.

(3) The court shall also, if practicable, immediately send a copy of the order to the administrator electronically.

(4) The administrator shall serve a sealed copy of the order on the investment bank at its registered office and, where the bank liquidator knows the investment bank’s email address, will send an electronic copy to the investment bank.

(5) The administrator shall send 2 copies of the order—

(a) to the Bank of England, the FSA and the FSCS; and

(b) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as reasonably practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the order is served on the investment bank.

Special administration (bank insolvency) order

27

If the court makes a special administration (bank insolvency) order, the order shall state—

(a) the name and address of the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(d) the name and business address of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Authentication of administrator’s appointment

28

A sealed copy of the court’s order may in any proceedings be adduced as proof that the person appointed is duly authorised to exercise the powers and perform the duties of the administrator in the special administration (bank insolvency).

Duties of Objective A committee

29

(1) This rule applies where a special administration (bank insolvency) order has been made.

(2) As soon as reasonably practicable after the making of a special administration (bank insolvency) order, the Objective A committee shall meet the administrator for the purpose of discussing which of the objectives, or combination of objectives, mentioned in section 102(1) of the 2009 Act (as applied by paragraph 6 of Schedule 1 to the Regulations), the committee should recommend the administrator to pursue.

(3) If the administrator and every individual on the Objective A committee agree, the meeting may be held by audio or video conference.

(4) The Objective A committee shall make its recommendation to the administrator at the meeting.

(5) The Bank of England shall confirm the Objective A committee’s recommendation in writing as soon as practicable after the meeting.

(6) As soon as practicable after the making of a special administration (bank insolvency) order, the Objective A committee shall also pass a resolution as to the terms on which, in accordance with rule 196, the administrator is to be remunerated in respect of—

(a) work done by the administrator in pursuit of Objective A; and

(b) work done by the administrator in pursuit of Objectives 2 and 3 of the special administration objectives.

(7) The Objective A committee—

(a) shall take decisions and pass resolutions by a simple majority; and

(b) for the purpose of taking decisions and passing resolutions, may communicate by any means that its members consider convenient.

Appointment of person under section 135

30

(1) An application to the court for the appointment of a person under section 135 of the 1986 Act (as applied by paragraph 8 of Schedule 1 to the Regulations) may be made—

(a) by the Bank of England; or

(b) by the FSA (with the consent of the Bank of England).

(2) The application must be supported by a witness statement stating—

(a) the grounds upon which it is proposed that the person should be appointed;

(b) that the person to be appointed has consented to act;

(d) whether to the applicant’s knowledge there has been proposed or is in force for the investment bank a company voluntary arrangement under Part 1 of the 1986 Act;

(e) the applicant’s estimate of the value of the assets in respect of which the person is to be appointed; and

(f) the functions the applicant wishes to be carried out by the person appointed under this rule in relation to the investment bank’s affairs.

(3) The court may on the application, if satisfied that an application has been made for a special administration (bank insolvency) order and that sufficient grounds are shown for the appointment, make it on such terms as it thinks fit.

Notice of appointment

31

(1) Where a person has been appointed under rule 30, the court shall notify the applicant and the person appointed.

(2) Unless the court otherwise directs, on receipt of the notification under paragraph (1) the person appointed shall give notice of that appointment as soon as reasonably practicable. Such notice—

(a) shall be gazetted; and

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

Order of appointment

32

(1) The order of appointment shall specify the functions to be carried out by the person appointed under rule 30 in relation to the investment bank’s affairs.

(2) The court shall, immediately after the order is made, send 4 sealed copies of the order (or such larger number as the person appointed may have requested), to the person appointed.

(3) The court shall also, if practicable, immediately send a copy of the order to the person appointed electronically.

(4) The person appointed shall serve a sealed copy of the order on the investment bank at its registered office and, where they know the investment bank’s email address, will send an electronic copy to the investment bank.

(5) The person appointed shall send 2 copies of the order—

(a) to the Bank of England, the FSA, and the FSCS; and

(b) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as reasonably practicable and the other (a sealed copy) shall be sent by first class post of the business day on which the order is served on the investment bank.

(7) The person appointed shall also send notice of the appointment to the registrar of companies.

Security

33

(1) The following applies where a person is appointed under rule 30.

(2) The cost of providing the security required by the 1986 Act shall be paid in the first instance by the person so appointed; but—

(a) if the special administration (bank insolvency) order is not made, the person so appointed is entitled to be reimbursed out of the estate of the investment bank, and the court may make an order on the investment bank accordingly; and

(b) if the special administration (bank insolvency) order is made, the person so appointed is entitled to be reimbursed as an expense of the administration in the prescribed order of priority.

Failure to give or keep up security

34

(1) If the person appointed under rule 30 fails to give or keep up their security, that person may be removed by the court and the court make such order as it thinks just as to costs.

(2) If an order is made under this rule, the court shall give directions as to the steps to be taken for the appointment of another person under rule 30.

(3) Where another person is appointed under rule 30, that person shall send notice of their appointment to the registrar of companies.

Remuneration

35

(1) The remuneration of the person appointed under rule 30 shall be fixed by the court from time to time on that person’s application.

(2) In fixing the remuneration, the court shall take into account—

(a) the time properly given by the person appointed;

(b) the complexity (or otherwise) of the case;

(c) any respects in which, in connection with the investment bank’s affairs, there falls on the person appointed any responsibility of an exceptional kind or degree;

(d) the effectiveness with which the person appointed appears to be carrying out, or has carried out, their duties; and

(e) the value and nature of the property with which the person appointed has to deal.

(3) Without prejudice to any order the court may make as to costs, the person appointed’s remuneration shall be paid to that person and the amount of any expenses incurred by that person shall be reimbursed—

(a) if the special administration (bank insolvency) order is not made, out of the estate of the investment bank;

(b) if the special administration (bank insolvency) order is made, as an expense of the administration, in the prescribed order of priority.

(4) Unless the court otherwise directs, in a case falling within paragraph (3)(a), the person appointed may retain out of the investment bank’s estate such sums or property as are, or may be, required for meeting their remuneration and expenses.

Termination of appointment

36

(1) The appointment of the person appointed under rule 30 may be terminated—

(a) by the court on that person’s application; or

(b) on the application of any of the persons specified in rule 30(1).

(2) The appointment of the person so appointed will be automatically terminated on the making of the special administration (bank insolvency) order.

(3) On the termination of the appointment, the court may give such directions as it thinks fit with respect to the account of that person’s administration or any other matters which it thinks appropriate.

(4) Unless the court directs otherwise, where the appointment is terminated, the person who was appointed under rule 30 shall give notice of the termination. Such notice—

(a) shall be gazetted; and

(b) may be advertised in such other manner as that person thinks fit.

(5) The person who was appointed under rule 30 shall send notice of the termination of their appointment to the registrar of companies.

CHAPTER 3 — Application for a special administration (bank administration) order

Content of application

37

(1) An application by the Bank of England for a special administration (bank administration) order in respect of an investment bank must specify—

(a) the full name of the investment bank;

(b) any other trading names;

(d) an email address for the investment bank;

(e) the address of the Bank of England; and

(f) the identity of the person (or persons) nominated for appointment as administrator.

(2) If the investment bank has notified the Bank of England of an address for service which is, because of special circumstances, to be used in place of the registered office, that address shall be specified under paragraph (1)(c).

Statement of proposed administrator

38

An application must be accompanied by a statement by the proposed administrator—

(a) specifying the name and business address of the person (or of each person) proposed to be appointed;

(b) giving that person’s (or each person’s) consent to act;

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

Bank of England witness statement

39

(1) An application for a special administration (bank administration) order in respect of an investment bank must be accompanied by a witness statement made on behalf of the Bank of England—

(a) certifying that the conditions for applying for a special administration (bank administration) order, set out in section 143 of the 2009 Act (as applied by paragraph 6 of Schedule 2 to the Regulations), are met in respect of the investment bank;

(b) stating the investment bank’s current financial position to the best of the Bank of England’s knowledge and belief (including actual, contingent and prospective assets and liabilities);

(d) specifying the amount of client assets held by the investment bank to the best of the applicant’s knowledge and belief;

(e) specifying any insolvency proceedings which have been instituted in respect of the investment bank (including any process notified to the FSA under section 120 of the 2009 Act);

(f) giving details of the property transfer instrument which the Bank of England has made or intends to make in respect of the investment bank;

(g) where the property transfer instrument has not yet been made, explaining what effect it is likely to have on the investment bank’s financial position;

(h) specifying how functions are 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 concurrently); and

(i) including any other material which the Bank of England thinks may help the court to decide whether to make the special administration (bank administration) order.

(2) The 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.

Filing

40

(1) The application, and its accompanying documents, must be filed with the court, together with enough copies of the application and accompanying documents for service under rule 41.

(2) Each filed copy—

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

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

(d) shall be issued to the Bank of England.

Service

41

(1) The Bank of England shall serve the application—

(a) on the investment bank;

(b) on the person (or each of the persons) nominated for appointment as administrator;

(c) on any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act (notice of preliminary steps of other insolvency procedures); and

(d) if the property transfer instrument was made or is to be made under section 11(2)(b) of the 2009 Act, on each transferee.

(2) Service under paragraph (1) must be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 40.

(3) Service must be effected as soon as is reasonably practicable, having regard in particular to the need to give the investment bank’s representatives a reasonable opportunity to attend the hearing.

(4) Service must be effected—

(a) by personal service to an address that the person has notified to the Bank of England as an address for service;

(b) by personal service to the person’s registered office (where no address for service has been notified);

(c) by personal service to the person’s usual or last known principal place of business in England and Wales (where there is no registered office and no address for service has been notified); or

(d) in such other manner and at such a place as the court may direct.

(5) If the Bank of England knows of an email address that is habitually used for business purposes by a person on whom service is required, the Bank must (in addition to personal service) as soon as is reasonably practicable send by email an electronic copy of a sealed and endorsed copy of the application and its accompanying documents.

(6) Service of the application shall be verified by a witness statement specifying the date on which, and the manner in which, service was effected.

(7) The witness statement, with a sealed copy of the application exhibited to it, shall be filed with the court—

(a) as soon as is reasonably practicable; and

(b) in any event, before the hearing of the application.

Other notification

42

As soon as is reasonably practicable after filing the application the Bank of England must notify—

(a) any enforcement officer or other officer whom the Bank of England knows to be charged with effecting an execution or other legal process against the investment bank or its property;

(b) any person whom the Bank of England knows to have distrained against the investment bank or its property; and

Venue

43

(1) The court shall fix the venue for the hearing when the application is filed.

(2) 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.

Hearing

44

At the hearing of the application, any of the following may appear or be represented—

(a) the Bank of England;

(b) the FSA;

(d) a director of the investment bank;

(e) the person (or a person) nominated for appointment as administrator;

(f) any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act; and

(g) with the permission of the court, any other person who appears to have an interest.

Special administration (bank administration) order

45

If the court makes an special administration (bank administration) order, the order shall state—

(a) that the Bank of England is the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(d) the name and business address of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Costs

46

If the court makes a special administration (bank administration) order, the following are payable as an expense of the bank administration—

(a) the Bank of England’s costs of making the application; and

(b) any other costs allowed by the court.

Notice of order

47

(1) If the court makes a special administration (bank administration) order, it shall send 4 sealed copies to the Bank of England.

(2) The Bank of England shall as soon as is reasonably practicable send—

(a) a sealed copy to the administrator;

(b) a sealed copy to the FSA; and

Remuneration of the administrator

48

As soon as practicable after the making of a special administration (bank administration) order, the Bank of England shall fix the terms on which, in accordance with rule 196, the administrator is to be remunerated in respect of—

(a) work done by the administrator in pursuit of Objective A; and

(b) work done by the administrator in pursuit of Objectives 2 and 3 of the special administration objectives.

Appointment of person under section 135

49

(1) An application to the court for the appointment of a person under section 135 of the 1986 Act (as applied by Table 2 in section 145(6) of the 2009 Act[^f00012] and by paragraph 6 of Schedule 2 to the Regulations) may be made by the Bank of England.

(2) The application must be supported by a witness statement stating—

(a) why the Bank of England thinks that such a person should be appointed;

(b) that the person to be appointed has consented to act;

(d) whether, to the Bank of England’s knowledge, a company voluntary arrangement under Part 1 of the Insolvency Act 1986 has been proposed or is in force in respect of the investment bank; and

(e) the Bank of England’s estimate of the value of the assets in respect of which the person is to be appointed.

(3) If satisfied that sufficient grounds are shown for the appointment, the court may make it on such terms as it thinks fit.

Order of appointment

50

(1) The order appointing a person described in rule 49(1) must specify the functions to be carried out in relation to the investment bank’s affairs.

(2) If the court makes an order appointing such a person, the court shall send 4 sealed copies of the order to the person appointed (and a copy by email if possible).

(3) As soon as is reasonably practicable after appointment the person appointed must send notice of the order of appointment to—

(a) the investment bank;

(b) the FSA;

(d) the registrar of companies.

(4) Notice to the investment bank must be given by service in accordance with rule 41 above.

(5) Unless the court otherwise directs, on receipt of the order of appointment, as soon as reasonably practicable, the person appointed shall give notice of that appointment. Such notice—

(a) shall be gazetted; and

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

(6) The Bank of England may disclose the fact and terms of an order appointing a person under this rule to any person whom the Bank thinks has a sufficient business interest.

(7) Rules 33 to 36 shall then apply with the following modifications—

(a) a reference to “special administration (bank insolvency)” is to be read as a reference to “special administration (bank administration)”; and

(b) a reference to rule 30 is to be read as a reference to rule 49.

PART 3 — Process of Special Administration

CHAPTER 1 — Notice of appointment and statement of affairs

Notification and advertisement of administrator’s appointment

51

(1) The notice of appointment to be given by the administrator as soon as reasonably practicable after appointment under paragraph 46(2)(b)—

(a) shall be gazetted; and

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

(2) In addition to the standard contents, the notice must state that an administrator has been appointed and the date of the appointment.

(3) The administrator shall as soon as practicable after appointment give notice of the appointment to—

(a) any enforcement officer who, to the administrator’s knowledge, is charged with execution or other legal process against the investment bank;

(b) any person who, to the administrator’s knowledge, has distrained against the investment bank; and

(4) The administrator shall send the notice of appointment to the registrar of companies within 7 days of the date of the order appointing them.

(5) Any notice required to be sent by the administrator under these Rules or under Schedule B1 must contain—

(a) details of the court where the proceedings are and the relevant court reference number;

(b) the full name, registered address and registered number of the investment bank; and

Notice requiring statement of affairs

52

(1) In this Part, “relevant person” has the meaning given to it in paragraph 47(3).

(2) The administrator shall send notice to each relevant person who the administrator deems appropriate requiring that person to prepare and submit a statement of the investment bank’s affairs.

(3) The notice shall inform each of the relevant persons—

(a) that the proceedings are being held in the High Court and the court reference number;

(b) of the full name, registered address and registered number of the investment bank;

(d) of the name and addresses of all others (if any) to whom the same notice has been sent;

(e) that the statement must be delivered to the administrator within 11 days of receipt of the notice;

(f) of the effect of paragraph 48(4) (penalty for non-compliance); and

(g) of the application to that person, and to each other relevant person, of section 235 of the 1986 Act[^f00013] (duty to provide information and to attend on the administrator if required).

(4) The administrator shall, on request, provide details to the relevant person as to how the statement should be prepared.

Details of the client assets held by the investment bank

53

(1) The statement of affairs shall include particulars of the client assets held by the investment bank..

(2) The particulars shall include—

(a) the names and addresses of clients of the investment bank for whom the investment bank holds client assets, but where these clients are individuals, the administrator shall not disclose their names and addresses;

(b) details as to the amount of client assets held, categorised into type and securities of a particular description;

(d) details as to any security interest held by the investment bank or another person in respect of the client assets.

Verification and filing

54

(1) In addition to the information required under rule 53, the statement of affairs shall be in Form 2.14B, contain all the particulars required by that form and be verified by a statement of truth by the relevant person.

(2) The administrator may require any relevant person to submit a statement of concurrence in Form 2.15B stating their concurrence in the statement of affairs and where the administrator does so, the relevant person making the statement of affairs shall be informed of that fact.

(3) The statement of affairs shall be delivered by a relevant person making the statement of truth, together with a copy, to the administrator, and the relevant person shall also deliver a copy of the statement of affairs to all those persons whom the administrator has required to make a statement of concurrence.

(4) A person required to submit a statement of concurrence shall do so before the end of the period of 5 business days (or such other period as the administrator may agree) beginning on the day on which the statement of affairs being concurred with is received by that person.

(5) A statement of concurrence may be qualified in respect of matters dealt with by the statement of affairs, where the maker of the statement of concurrence is not in agreement with the relevant person, or where they consider the statement of affairs to be erroneous or misleading, or where they are without the direct knowledge necessary for concurring with it.

(6) Every statement of concurrence shall be verified by a statement of truth and be delivered to the administrator by the person who makes it, together with a copy of it.

(7) Subject to rule 55, the administrator shall as soon as reasonably practicable send a copy of the statement of affairs and any statement of concurrence to the registrar of companies and file them with the court.

(8) In this rule, a reference to a specific form shall be to that form as prescribed in the Insolvency Rules 1986[^f00014], with any modification that the person using the form thinks desirable to reflect the nature of special administration.

Limited disclosure

55

(1) Where the administrator thinks that it would prejudice the conduct of the administration (or might reasonably be expected to lead to violence against any person) for the whole or part of the statement of the investment bank’s affairs to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of the statement.

(2) The court may, on such application, order that the statement or, as the case may be, the specified part of it, shall not be filed with the registrar of companies.

(3) The administrator shall, as soon as reasonably practicable, send a copy of the order and the statement of affairs (to the extent provided by the order) and any statement of concurrence to the registrar of companies.

(4) If a creditor or a client seeks disclosure of a statement of affairs or a specified part of it in relation to which an order has been made under this rule, that person may apply to the court for an order that the administrator disclose it or a specified part of it.

(5) An application under paragraph (4) shall be supported by written evidence in the form of a witness statement.

(6) Where a special administration (bank administration) order has been made, and where an application has been made under paragraph (4), the Bank of England and the FSA may appear and be heard at the hearing or may make written representations.

(7) The applicant shall give the administrator notice of the application at least 3 business days before the hearing.

(8) The court may make any order for disclosure subject to any conditions as to confidentiality, duration, the scope of the order in the event of any change of circumstances, or other matters as it sees just.

(9) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator shall, as soon as reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

(10) The administrator shall, as soon as reasonably practicable after the making of an order under paragraph (9), file a copy of the statement of affairs to the extent provided by the order with the registrar of companies.

(11) When the statement of affairs is filed in accordance with paragraph (10), the administrator shall, where they have sent a statement of proposals under paragraph 49, or, in a special administration (bank administration), paragraph 9 of Schedule 2 to the Regulations, provide the creditors and clients with a copy of the statement of affairs as filed, or a summary thereof.

(12) The provisions of CPR Part 31 shall not apply to an application under this rule.

Release from duty to submit statement of affairs

56

(1) The power of the administrator under paragraph 48(2) to give a release from the obligation imposed by paragraph 47(1) or to grant an extension of time may be exercised at the administrator’s own discretion, or at the request of any relevant person.

(2) A relevant person may, if they request a release of extension of time and it is refused by the administrator, apply to the court for it and when such an application is made, the period referred to in paragraph 48(1) is suspended pending the court’s decision.

(3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it without a hearing but it shall not do so without giving the relevant person at least 5 business days’ notice, upon receipt of which the relevant person may request the court to list the application for a without notice hearing.

(4) If the application is not dismissed under paragraph (3), the court shall fix a venue for it to be heard, and give notice to the relevant person and to the FSA accordingly.

(5) Where an application has been made under paragraph (2), the FSA may appear and be heard at the hearing and in a special administration (bank administration), the Bank of England may also be given notice of the hearing and may appear and be heard at the hearing or may make written representations.

(6) The relevant person shall, at least 14 days before the hearing, send to the administrator a notice stating the venue and accompanied by a copy of the application and of any evidence which the relevant person intends to adduce in support of it.

(7) The administrator may appear and be heard on the application and, whether or not they appear, the administrator may file a written report of any matters which they consider ought to be drawn to the court’s attention.

(8) If a report is filed under paragraph (7), a copy of it shall be sent by the administrator to the relevant person not later than 5 business days before the hearing.

(9) Sealed copies of any order made on the application shall be sent by the court to the relevant person and the administrator.

(10) On any application under this rule, the relevant person’s costs shall be paid in any event by that person and, unless the court otherwise orders, no allowance towards them shall be made as an expense of the special administration.

Expenses of statement of affairs

57

(1) A relevant person making the statement of the investment bank’s affairs or a statement of concurrence shall be allowed, and paid by the administrator as an expense of the special administration, any expenses incurred by the relevant person in so doing which the administrator considers reasonable.

(2) Any decision by the administrator under this rule is subject to appeal to the court.

(3) Nothing in this rule relieves a relevant person from any obligation with respect to the preparation, verification and submission of the statement of affairs or to the provision of information to the administrator.

Submission of accounts

58

(1) Any of the persons specified in section 235(3) of the 1986 Act shall, at the request of the administrator, provide the administrator with the investment bank’s accounts as at such date and for such period as the administrator may specify.

(2) The period specified may begin from a date up to 3 years preceding the date the investment bank entered special administration, or from an earlier date to which the audited accounts of the investment bank were last prepared.

(3) The court may, on the administrator’s application, require accounts for an earlier period.

(4) Rule 57 applies (with the necessary modification) in relation to the accounts to be provided under this rule as it applies to the statement of affairs.

(5) The accounts shall (if the administrator so requires) be verified by a statement of truth and (whether or not so verified) be delivered within 21 days of the request under paragraph (1) (or such longer period as the administrator may allow).

CHAPTER 2 — Statement of proposals

Administrator’s proposals

59

(1) The administrator shall under paragraph 49 (or in the case of a special administration (bank administration) paragraph 7 of Schedule 2 to the Regulations) make a statement of proposals which shall be sent to the registrar of companies.

(2) In addition to the information required by that paragraph, the statement of proposals must include—

(a) a statement that the proceedings are being held in the High Court and the court reference number;

(b) the full name, any other trading names, the registered address and registered number of the investment bank;

(d) in the case of joint administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the investment bank and details of any shareholdings in the investment bank they have;

(f) an account of the circumstances giving rise to the application for the appointment of the administrator;

(g) if a statement of the investment bank’s affairs has been submitted, a copy or summary of it with the administrator’s comments, if any;

(h) if an order limiting the disclosure of the statement of affairs has been made under rule 55, a statement of that fact, as well as—

(i) details of who provided the statement of affairs,

(ii) the date of the order for limited disclosure, and

(iii) the details or a summary of the details that are not subject to that order;

(i) if a full statement of affairs is not provided, the names, addresses and debts of the creditors including details of any security held (or in case of any depositors of the investment bank, a single statement of their aggregate debt);

(j) if a full statement of affairs is not provided, or if no statement of affairs is provided, the names and addresses of clients of the investment bank together with a description of the amount and type of client assets held, the type of ownership the clients have in respect of those assets and details as to any security interest held by the investment bank or another person in respect of those assets, but where those clients are individuals, their names and addresses are not to be disclosed;

(k) if no statement of affairs is provided, details of the financial position of the investment bank at the latest practicable date (which must, unless the court otherwise orders, be a date not earlier than that on which the investment bank entered special administration), a list of the investment bank’s creditors including their names, addresses and details of their debts, including any security held (or in case of any depositors of the investment bank, a single statement of their aggregate debt) and an explanation as to why there is no statement of affairs;

(l) the basis upon which it is proposed that the administrator’s remuneration should be fixed under rule 196, and, if this basis has already been set by the Objective A committee or by the Bank of England in respect of Objective A, or in respect of Objectives 2 and 3 of the special administration objectives, details as to what has been set and any proposals for this to be changed;

(m) a statement complying with paragraph (4) of any pre-administration costs charged or incurred by the administrator or, to the administrator’s knowledge, by any other person qualified to act as an insolvency practitioner;

(n) details of whether (and why) the administrator proposes to apply to the court under section 176A(5) of the 1986 Act as applied by regulation 15 (unless the administrator intends to propose a company voluntary arrangement);

(o) an estimate of the value of the prescribed part for the purposes of section 176A (unless the investment bank intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief;

(p) an estimate of the value of the investment bank’s net property (unless the administrator intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief;

(q) in—

(i) a special administration, an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FSA has given a direction under regulation 16, an explanation as to how this has dictated the priority given to a particular objective), and

(ii) a special administration (bank insolvency) or a special administration (bank administration)—

(aa) a summary of how Objective A is being or has been achieved and the resources devoted to the pursuit of Objective A; and

(bb) an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FSA has given a direction under regulation 16, an explanation as to how this has dictated the priority given to a particular objective);

(r) the manner in which the affairs and business of the investment bank have been managed and financed since the date of the administrator’s appointment (including the reasons for and terms of any disposal of assets);

(s) details as to the order in which the administrator aims to pursue the special administration objectives and the manner in which the affairs and business of the investment bank will be managed and financed if the administrator’s proposals are approved;

(t) whether the administrator expects a dividend to be paid to creditors and an estimate of the amount of this dividend;

(u) how it is proposed that the special administration shall end (winding-up or voluntary arrangement), in accordance with Objective 3 as set out in regulation 10(1)(c); and

(v) any other information which the administrator thinks necessary to enable creditors and clients to vote for the approval of the statement of proposals.

(3) In this Part—

(a) “pre-administration costs” are—

(i) fees charged, and

(ii) expenses incurred,

by the administrator, or another person qualified to act as an insolvency practitioner, before the investment bank entered special administration but with a view to its doing so; and

(b) “unpaid pre-administration costs” are pre-administration costs which had not been paid when the investment bank entered special administration.

(4) A statement of pre-administration costs complies with this paragraph if it includes—

(a) details of any agreement under which the fees were charged and expenses incurred, including the parties to the agreement and the date on which the agreement was made;

(b) details of the work done for which the fees were charged and expenses incurred;

(c) an explanation of why the work was done before the investment bank entered special administration and how it would further the achievement of the special administration objectives;

(d) a statement of the amount of the pre-administration costs, setting out separately—

(i) the fees charged by the administrator,

(ii) the expenses incurred by the administrator,

(iii) the fees charged (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately), and

(iv) the expenses incurred (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately);

(e) a statement of the amounts of pre-administration costs which have already been paid (set out separately as under sub-paragraph (d)),

(f) the identity of the person who made the payment or, if more than one person made the payment, the identity of each such person and of the amounts paid by each such person set out separately as under sub-paragraph (d),

(g) a statement of the amounts of unpaid pre-administration costs (set out separately as under sub-paragraph (d)), and

(h) a statement that the payment of unpaid pre-administration costs as an expense of the administration is—

(i) subject to approval under rule 136; and

(ii) not part of the proposals subject to approval under paragraph 53.

(5) The statement of proposals—

(a) may exclude information the disclosure of which could seriously prejudice the commercial interests of the investment bank, and

(b) must include a statement of any exclusion.

(6) In the case of special administration (bank administration) following transfer to a bridge bank under section 12(2) of the 2009 Act—

(a) the statement of proposals must state whether any payment is to be made to the investment bank from a scheme under a resolution fund order; or

(b) if that information is unavailable when the statement of proposals is made, the administrator must issue a supplemental statement when the information is available.

(7) Following an application by the administrator under paragraph 107, where the court orders an extension of the period of time in paragraph 49(5), the administrator shall notify—

(a) every creditor of the investment bank of whose address the administrator is aware;

(b) every client of the investment bank of whose claim the administrator is aware and has a means of contacting; and

as soon as possible after the order is made.

(8) Where the administrator wishes to publish a notice under paragraph 49(6) or gives notice that the statement of proposals is to be provided free of charge to a market infrastructure body, either notice shall be advertised in such a manner as the administrator thinks fit.

(9) In addition to the standard contents, a notice under paragraph (7) must state—

(a) that persons can write for a copy of the statement of proposals for achieving the purpose of administration; and

(b) the address to which to write.

(10) This notice must be published as soon as reasonably practicable after the administrator sends out the statement of proposals in accordance with paragraph 49(4) (or in the case of a special administration (bank administration) under paragraph 9 of Schedule 2 to the Regulations), but no later than 8 weeks (or such other period as may be agreed by the creditors and clients or as the court may order) from the date that the investment bank entered special administration.

Limited disclosure of the statement of proposals

60

(1) Where the administrator thinks that it would prejudice the conduct of the administration (or might reasonably be expected to lead to violence against any person) for any of the matters specified in rule 59(2)(i) to (k) to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of any specified part of the statement of proposals.

(2) The court may, on such application, order that some or all of the specified part of the statement must not be sent to the registrar of companies or to creditors, clients or members of the company as otherwise required by paragraph 49(4), or, in the case of a special administration (bank administration), paragraph 9 of Schedule 2 to the Regulations.

(3) The administrator must as soon as reasonably practicable send to the persons specified in paragraph (2) the statement of proposals (to the extent provided by the order) and an indication of the nature of the matter in relation to which the order was made.

(4) The administrator must also send a copy of the order to the registrar of companies.

(5) A creditor who seeks disclosure of a part of the statement of proposals in relation to which an order has been made under this rule may apply to the court for an order that the administrator disclose it, and the application must be supported by written evidence in the form of a witness statement.

(6) Where a special administration (bank administration) order has been made and an application has been made under paragraph (5), the Bank of England and the FSA may appear and be heard at the hearing or may make written representations.

(7) The applicant must give the administrator notice of the application at least 3 business days before the hearing.

(8) The court may make any order for disclosure subject to any conditions as to confidentiality, duration, the scope of the order in the event of any change of circumstances, or other matters as it sees just.

(9) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

(10) The administrator must, as soon as reasonably practicable after the making of an order under paragraph (9), send to the persons specified in paragraph (2) a copy of the statement of proposals to the extent provided by the order.

(11) The provisions of CPR Part 31 do not apply to an application under this rule.

CHAPTER 3 — Initial meeting to consider proposals

Initial meeting

61

(1) As soon as reasonably practicable after an invitation to the initial meeting has been sent out in accordance with paragraph 51(1) (or in a special administration (bank administration), in accordance with paragraph 10 of Schedule 2 to the Regulations), the administrator must have gazetted—

(a) that an initial meeting of creditors and clients is to take place;

(b) the venue fixed for the meeting; and

(2) The information required to be gazetted under paragraph (1) may also be advertised in such other manner as the administrator thinks fit.

(3) Where the court orders an extension to the period set out in paragraph 51(2)(b), the administrator shall notify each person who was sent notice in accordance with paragraph 49(4) (or in a special administration (bank administration), paragraph 9 to Schedule 2 to the Regulations).

(4) In a special administration (bank insolvency) or a special administration (bank administration) the Bank of England and the FSCS shall also be invited to the initial meeting, and where paragraph (3) applies, shall be notified of the extension of the period set out in paragraph 51(2)(b).

(5) This rule shall not apply where the FSA has given a direction under regulation 16 and the direction has not been withdrawn.

Notice to officers

62

(1) Where rule 61 applies, notice to attend the meeting must be given to every present or former officer of the investment bank whose presence the administrator thinks is required at the same time that notice is sent to creditors and clients.

(2) That notice must contain—

(a) a statement that the proceedings are being held in the High Court and the court reference number;

(b) the full name, registered address, registered number and any other trading names of the investment bank;

(d) details of the venue of the meeting.

(3) Every person who receives a notice under paragraph (1) must attend.

Business of the initial meeting

63

(1) At the initial meeting of creditors and clients—

(a) a creditors’ committee may be established in accordance with Chapter 8 of this Part; and

(b) the statement of proposals shall be approved as follows.

(2) The proposals shall not be approved unless both classes of voter have voted to approve them.

(3) The creditors and the clients shall vote separately on whether to approve the proposals.

(4) In a special administration (bank insolvency) (and in a special administration (bank administration) if there are depositors) the FSCS shall be entitled to vote as a creditor under this rule and rule 86 has effect with respect to its voting rights.

(5) If the proposals are approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposals as modified.

(6) Where the administrator is unable to get the requisite majority of a class of voter for approval of the statement of proposals (with or without any modifications), rule 64 applies.

(7) Paragraph (6) shall not apply in a special administration (bank administration).

(8) This rule shall not apply where the FSA has given a direction under regulation 16 and the direction has not been withdrawn.

Adjournment of meeting to approve the statement of proposals

64

(1) If, at the initial meeting of creditors and clients, there is not the requisite majority for approval of the statement of proposals (with or without any modifications), the administrator may, and shall if a resolution is passed to that effect, adjourn the meeting for not more than 14 days (subject to any direction by the court).

(2) If there are subsequently further adjournments, the final adjournment must not be to a day later than 14 days after the date on which the meeting was originally held, (subject to any direction by the court).

(3) Where a meeting is adjourned under this rule, proofs and proxies may be used if lodged at any time up to 12.00 hours on the business day immediately before the adjourned meeting.

(4) Where at the initial meeting, the proposals were approved (whether or not with modifications) by one class of voter but not the other, that approval shall no longer stand at the adjourned meeting unless the version of the proposals to be voted on has not been modified from the version that was approved.

(5) If the administrator is unable to get the requisite majority of creditors or clients for approval of the statement of proposals, the administrator may apply to the court for directions under paragraph 63.

(6) This rule shall not apply in a special administration (bank administration).

Revision of the statement of proposals

65

(1) The administrator shall under paragraph 54 (or regulation 18 or paragraph 11 of Schedule 2 to the Regulations as the case may be) make a statement setting out the proposed revisions to the statement of proposals (“the revised statement”).

(2) The revised statement, which shall be sent out in accordance with paragraph 54(2)(b) and (c), shall include—

(a) a statement that the proceedings are being held in the High Court and the court reference number;

(b) the full name, registered address, registered number and any other trading names of the investment bank;

(d) in the case of joint administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the investment bank and details of any shareholdings in the investment bank they have;

(f) a summary of the initial proposals and the reasons for proposing a revision;

(g) details of the proposed revision including details of the administrator’s assessment of the likely impact of the proposed revision upon the creditors generally or upon each class of creditor or on the clients (as the case may be); and

(h) any other information that the administrator thinks necessary to enable creditors to decide whether or not to vote for the proposed revisions.

(3) The FSA shall be sent a copy of the revised statement at the same time as the revised statement is sent out.

(4) Where the administrator considers that the revision proposed will only affect creditors or, as the case may be, clients, the notice of the meeting to consider the revised proposals shall be sent to both creditors and clients, but will state who is invited to the meeting.

(5) In a special administration (bank insolvency) or a special administration (bank administration) the Bank of England and the FSCS shall also be invited to the meeting.

(6) Subject to paragraph 54(3), within 5 business days of sending out the revised statement the administrator shall send a copy of the statement to every member of the investment bank.

(7) Any notice to be published under paragraph 54(3) shall be advertised in such a manner as the administrator thinks fit.

(8) The notice shall be published as soon as reasonably practicable after the administrator sends the revised statement in accordance with paragraph 54(2) and, in addition to the standard contents, shall—

(a) state that members can write for a copy of the statement of revised proposals and

(b) the address to which to write.

(9) Paragraphs (4) and (5) shall not apply—

(a) in a special administration (bank administration) where—

(i) the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals, and

(ii) Objective A has been achieved; and

(b) in a special administration or a special administration (bank insolvency) where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals.

(10) In this rule, a reference to—

“paragraph 54(2)” also includes a reference to regulation 18(4) or paragraph 13(4) of Schedule 2 to the Regulations as the case may be; and

“paragraph 54(3)” also includes a reference to regulation 18(5) or paragraph 13(5) of Schedule 2 to the Regulations as the case may be.

Meeting to approve the revised statement of proposals

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(1) This rule applies to a meeting of creditors, a meeting of clients or a meeting of creditors and clients to approve the revisions to the statement of proposals.

(2) Where the revisions are being approved by a meeting of creditors and clients—

(a) the creditors and the clients shall vote separately on whether to approve the revisions;

(b) the revisions shall not be approved unless both classes of voter have voted to approve them; and

(c) where the revisions are approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposals as modified.

(3) In a special administration (bank insolvency) (and in a special administration (bank administration) if there are depositors) the FSCS shall be entitled to vote as a creditor under this rule and rule 86 has effect with respect to its voting rights.

(4) In a special administration or a special administration (bank insolvency), where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals, this rule shall not apply.

(5) In a special administration (bank administration), where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals—

(a) if Objective A has not been achieved, paragraph (2)(c) shall not apply; and

(b) if Objective A has been achieved, this rule shall not apply.

Notice to creditors and clients

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As soon as reasonably practicable after the conclusion of a meeting of creditors or clients, or of creditors and clients to consider the administrator’s proposals or revised proposals, the administrator shall—

(a) send notice of the result of the meeting to every person who received a copy of the original proposals;

(b) attach a copy of the proposals considered at the meeting to the notice sent to each creditor and each client who did not receive notice of the meeting but of whose claim the administrator has subsequently become aware; and

CHAPTER 4 — Meetings generally

Meetings generally

68

This chapter, except where different provision is made in the Regulations or these Rules, applies to meetings summoned by the administrator under—

(a) paragraph 51 (initial meeting);

(b) paragraph 54(2) (meeting to consider revision to the administrator’s proposals);

or following a request or a direction from the court under paragraph 56 (further creditors’ meetings).

Venue

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(1) In fixing the venue for a meeting, the convener must have regard to the convenience of those attending.

(2) Meetings must be summoned for commencement between 10.00 and 16.00 hours on a business day (subject to any direction by the court).

(3) In this rule, “meeting” includes an adjourned meeting.

Notice of meeting by individual notice: when and where sent

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(1) This rule applies except where the court orders under rule 72 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must be delivered at least 14 days before the day fixed for the meeting as provided in paragraph (3).

(3) Notice must be sent—

(a) for a meeting involving the creditors, to all the creditors of whose address the administrator is aware and who had claims against the investment bank at the date when it entered administration (except for those who have subsequently been paid in full);

(b) for a meeting involving the clients, to all clients of whose claim the administrator is aware (except for those who have no outstanding claim to clients assets held by the investment bank) and has a means of contacting;

(c) for a meeting of contributories, to every person appearing (by the investment bank’s books or otherwise) to be a contributory of the investment bank.

(4) The FSA, and in a special administration (bank insolvency) or special administration (bank administration), the Bank of England and the FSCS, shall also be notified of any such meeting.

Notice of meeting by individual notice: content and accompanying documents

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(1) This rule applies except where the court orders under rule 72 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must specify the purpose of and venue for the meeting and state that claims or proofs and (if applicable) proxies must be lodged at a specified place not later than 12.00 hours on the business day before the date fixed for the meeting in order that creditors or clients may be entitled to vote at the meeting.

(3) Forms of proxy complying with rule 125 must be sent out with every notice summoning a meeting.

Notice of meeting by advertisement only

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(1) The court may order that notice of any meeting under these Rules be given by advertisement and not by individual notice to the persons concerned.

(2) In considering whether so to order, the court must have regard to the cost of advertisement, the amount of assets available and the extent of the interest of creditors, clients, members and contributories or any particular class of them.

Content of notice for meetings

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(1) Notice of a meeting of the creditors, clients or a meeting of creditors and clients, must contain the following information—

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