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

• (i) the records of the original proceedings, including correspondence, proofs and other related papers appertaining to those proceedings while they were within P’s responsibility; and

• (ii) the investment bank’s books, papers and other records; and

• (c) P hand over all the assets of the investment bank and the client assets held by the investment bank in P’s possession.

• (5) In this rule—

• “the Authority” means— where the investment bank is a deposit-taker and the application under paragraph (1) is for an order to convert the proceedings to— a special administration (bank administration), the Bank of England; or a special administration (bank insolvency), the Bank of England or the FSA (with the consent of the Bank of England); and otherwise, the FSA;

• “office-holder” means provisional liquidator, liquidator or administrator as the case may be; and

• “original proceedings” means the proceedings following the making of the winding up order, the administration order or the resolution referred to in paragraph (1).

PART 12 — General interpretation and application

Introduction

328

This Part of the Rules has effect for their interpretation and application; and any definition given in this Part applies except, and in so far as, the context otherwise requires.

“The court”; “the registrar”

329

• (1) Anything to be done under or by virtue of the Regulations or the Rules by, to or before the court may be done by, to or before a judge or the registrar.

• (2) The registrar may authorise any act of a formal or administrative character which is not by statute the registrar’s responsibility to be carried out by the chief clerk or any other officer of the court acting on the registrar’s behalf, in accordance with directions given by the Lord Chancellor.

• (3) “The registrar” means a Registrar in Bankruptcy of the High Court.

Venue

330

References to the “venue” for any proceeding or attendance before the court, or for a meeting, are to the time, date and place for the proceeding, attendance or meeting or to the time and date for a meeting which is held in accordance with section 246A without any place being specified for it.

Insolvent estate

331

References to “the insolvent estate” are,in relation to a special administration, the investment bank’s assets.

The appropriate fee

332

“The appropriate fee” means 15 pence per A4 or A5 page, and 30 pence per A3 page.

“Debt”; “liability”

333

• (1) “Debt”, in relation to the special administration means (subject to the next paragraph) any of the following—

• (a) any debt or liability to which the investment bank is subject on the date when the investment bank entered special administration;

• (b) any debt or liability to which the investment bank may become subject after that date by reason of any obligation incurred before that date; and

• (c) any interest provable as mentioned in rule 168.

• (2) In paragraph (1)(a), the reference to debt or liability includes a debt incurred by the investment bank as a result of the operation of rules 137 and 146 even if the debt is incurred after the date on which the investment bank entered special administration.

• (3) For the purposes of any provision of the Regulations or the Rules, any liability in tort is a debt provable in the special administration, if either—

• (a) the cause of action has accrued at the date on which the investment bank went into special administration; or

• (b) all the elements necessary to establish the cause of action exist at that date except for actionable damage.

• (4) For the purposes of references in any provision of the Regulations or the Rules to a debt or liability, it is immaterial whether the debt or liability is present or future, whether it is certain or contingent, or whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion; and references in any such provision to owing a debt are to be read accordingly.

• (5) In any provision of the Regulations or the Rules, except in so far as the context otherwise requires, “liability” means (subject to paragraph (4)) a liability to pay money or money’s worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment, and any liability arising out of an obligation to make restitution.

Application of the 1986 Act and the Company Directors Disqualification Act

334

For the purposes of these Rules, any reference in the 1986 Act or the Company Directors Disqualification Act 1986[^f00026] to “leave” of the court is to be construed as meaning “permission” of the court.

SCHEDULE — Punishment of offences

Note: In the fourth and fifth columns of this Schedule, “the statutory maximum” means the prescribed sum under section 32 of the Magistrates’ Courts Act 1980[^f00027].

Signed

Kenneth Clarke — The Lord Chancellor — 15th May 2011

We concur

Jeremy Wright — Michael Fabricant — Two of the Lords Commissioners of Her Majesty’s Treasury — 17th May 2011

I concur

Sir Andrew Morritt — The Chancellor of the High Court — 18th May 2011

Explanatory note

(This note is not part of the Rules)

EXPLANATORY NOTE

These Rules set out the procedure for the Investment Bank Special Administration process under the Investment Bank Special Administration Regulations 2011[^f00028] (“the Regulations”).

The main features of Investment Bank Special Administration are that:

• (a) the investment bank enters the procedure by court order;

• (b) the order appoints an administrator;

• (c) the administrator is to pursue the special administration objectives in accordance with the statement of proposals approved by the meeting of creditors and clients and, in certain circumstances, the FSA; and

• (d) in other respects the procedure is similar to administration under Schedule B1 of the Insolvency Act 1986[^f00029].

Where the investment bank is also a deposit-taking bank, the Rules also apply in relation to the Special Administration (Bank Insolvency) and Special Administration (Bank Administration) processes under Schedules 1 and 2 of the Regulations.

Part 2 of the Rules sets out the procedure for applying for a special administration order, a special administration (bank insolvency) order or a special administration (bank administration order).

Part 3 of the Rules sets out the process of the special administration.

Part 4 of the Rules provides for the expenses of the special administration.

Part 5 of the Rules provides for the pursuit of Objective 1.

Part 6 of the Rules provides for distributions to creditors.

Part 7 of the Rules sets out rules concerning the administrator.

Part 8 of the Rules provides for the end of the special administration.

Part 9 of the Rules sets out court procedure and practice.

Part 10 of the Rules provides for the application of section 216 of the Insolvency Act 1986 (prohibited names).

Part 11 of the Rules contains provisions of general effect.

Part 12 of the Rules provides for general interpretation and application.

The Rules apply to investment banks incorporated as companies and also to investment banks that are:

• (e) limited liability partnerships by virtue of paragraph 6 of Schedule 3 of the Regulations which applies the Rules with such modifications as the context requires for giving effect to the Regulations; or

• (f) partnerships by virtue of paragraph 5 of Schedule 4 to the Regulations which applies Article 18 of and Schedule 10 to the Insolvent Partnerships Order 1994 (S.I. 1994/ 2421, amended by S.I. 2005/1516) with modifications.

An Impact Assessment on the effect of these Rules has been prepared and may be obtained from the Financial Regulatory Strategy team, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ. It is also available on HM Treasury’s website (www.hm-treasury.gov.uk).

Footnotes

[^f00001]: 1986 c. 45: section 411 is applied with modifications by regulation 15(6) of the Investment Bank Special Administration Regulations 2011. Subsections (1A) and (2C) were inserted by and subsections (2) and (3) were amended by section 125 of the Banking Act 2009 (c.1).

[^f00002]: S.I. 2011/ 245.

[^f00003]: 2006 c. 46.

[^f00004]: 2009 c. 1.

[^f00005]: 1971 c.80.

[^f00006]: S.I. 1998/ 3132.

[^f00007]: Section 232 was amended by S.I. 2011/239.

[^f00008]: Section 176A was inserted by section 252 of the Enterprise Act 2002 (c. 40) and amended by S.I. 2008/948.

[^f00009]: S.I. 2003/2097.

[^f00010]: Relevant amendments to Schedule B1 were made by S.I. 2003/2096, S.I. 2005/879, S.I. 2007/2974, S.I. 2008/948, S.I. 2008/1897, S.I. 2009/1941 and S.I. 2010/18.

[^f00011]: Section 390 has been amended by the Adults with Incapacity (Scotland) Act 2000 (asp 4) section 88(2), Schedule 5 paragraph 18; by the Enterprise Act 2002 (c.40) section 257(3) Schedule 21 paragraph 4; by the Mental Capacity Act 2005 (c. 9) section 67(1) (2), Schedule 6 paragraph 31(1), (3)(b), (3)(c), Schedule 7; by the Tribunals, Courts and Enforcement Act 2007 (c.15) section 108(3), Schedule 20 paragraphs 1, 6(1) to (3); by S.S.I 2005/465; S.I. 2005/2078; S.I. 2009/1941 and S.I. 2009/3081.

[^f00012]: Section 145 was amended by section 21 of the Financial Services Act 2010 (c. 28).

[^f00013]: Section 235 was amended by the Enterprise Act 2002 (c. 40) section 248(3), Schedule 17 paragraphs 9, 24.

[^f00014]: S.I. 1986/1925; this instrument has been amended by a number of instruments: relevant amendments have been made by S.I. 1987/1919, S.I. 2002/1307, S.I. 2003/730 and S.I. 2010/686.

[^f00015]: Section 246A was inserted by S.I. 2010/18.

[^f00016]: 1838 c.110 1 and 2 Victoria: section 17 was amended by the Statute Law Revision (No. 2) Act 1888 (55 and 56 Victoria), by the Civil Procedure Acts Repeal Act 1879 (c. 59) section 2, Schedule, Part 1 and by S.I. 1993/565 and S.I.1998/2940.

[^f00017]: 2000 c.8: section 215 was amended by sections 169 and 170(2) of the 2009 Act.

[^f00018]: 2002 c.9.

[^f00019]: Section 236 was amended by S.I. 2010/18.

[^f00020]: 2005 c.9.

[^f00021]: Sections 184(2) and 184(3) were amended by the Courts Act 2003, section 109(1), Schedule 8, para 296(1)(3) and by S.I. 1986/1996.

[^f00022]: 2002 c. 29.

[^f00023]: Section 246B was inserted by S.I. 2010/18.

[^f00024]: 2003 c.39: section 92 was amended by the Constitutional Reform Act 2005, section 15(1), Schedule 4, Part 1 paras 308, 345 and section 59(5) Schedule 11, Part 2, para 4(1)(3).

[^f00025]: CPR rule 2.8 was amended by S.I. 2009/3390.

[^f00026]: 1986 c. 46.

[^f00027]: 1980 c. 43: section 32 was amended by the Criminal Attempts Act 1981 (c. 47) section 10, Schedule, Part 1, by the Criminal Justice Act 1988 (c.33) section 170(2) Schedule 16, by the Criminal Justice Act 1991 (c.53) section 17(2), by the Criminal Justice Act 2003 (c. 44) section 282 and by the Serious Crime Act 2007 (c. 27) section 63(2), 92, Schedule 6, Part 2, paras 55(1), (2), Schedule 14.

[^f00028]: S.I. 2011/245.

[^f00029]: 1986 c.45: Schedule B1 was inserted by the Enterprise Act 2002 (c. 40) section 248, Schedule 16.