The Investment Bank Special Administration (Scotland) Rules 2011

• (ii) to the specified manner in which paragraph (3) is to be satisfied;

• (b) all the information required to be given is provided in the electronic submission; and

• (c) the person to whom the information is sent can produce in legible form the information so sent.

• (3) Any requirement that the information be accompanied by a signature is taken to be satisfied if the identity of the person who is supplying the information and whose signature is required is confirmed in the specified manner.

• (4) Where information has been supplied to a person, whether or not it has been supplied electronically in accordance with paragraph (2), and a copy of that information is required to be supplied to another person falling within paragraph (1), the requirements contained in paragraph (2) apply in respect of the supply of the copy to that other person, as they apply in respect of the original.

Contents of notices to be advertised in the Edinburgh Gazette

174

• (1) Where under the Regulations or these Rules a notice must be published or advertised in the Edinburgh Gazette, in addition to any content specifically required by the Regulations or any other provision of these Rules, the content of such a notice must be as set out in this rule.

• (2) All notices published must specify insofar as it is applicable in relation to the particular notice—

• (a) the name and postal address of the administrator acting in the special administration to which the notice relates and the date of the appointment of that person;

• (b) either an email address, or a telephone number, through which the administrator may be contacted;

• (c) the name of any person other than the administrator (if any) who may be contacted regarding the special administration;

• (d) the number assigned to the administrator by the Secretary of State; and

• (e) the court name and any number assigned to the special administration by the court.

• (3) All notices published must specify as regards the investment bank to which the notice relates—

• (a) the registered name of the investment bank;

• (b) its registered number;

• (c) its registered office;

• (d) any principal trading address if this is different from its registered office;

• (e) any name under which it was registered in the 12 months prior to the date of the commencement of the special administration; and

• (f) any name or style (other than its registered name) under which—

• (i) the investment bank carried on business;

• (ii) the investment bank undertook to hold an asset on behalf of a client; or

• (iii) any debt owed to a creditor was incurred.

Notices otherwise advertised under the Regulations or these Rules

175

• (1) Where under the Regulations or these Rules a notice may be advertised otherwise than in the Edinburgh Gazette, in addition to any content specifically required by the Regulations or any other provision of these Rules, the content of such a notice must be as set out in this rule.

• (2) All notices published must specify insofar as it is applicable in relation to the particular notice—

• (a) the name and postal address of the administrator acting in the proceedings to which the notice relates; and

• (b) either an email address, or a telephone number, through which the administrator may be contacted.

• (3) All notices published must specify as regards the investment bank to which the notice relates—

• (a) the registered name of the investment bank;

• (b) its registered number;

• (c) any name under which it was registered in the 12 months prior to the date of the commencement of the special administration; and

• (d) any name or style (other than its registered name) under which—

• (i) the investment bank carried on business;

• (ii) the investment bank undertook to hold an asset on behalf of a client; or

• (iii) any debt owed to a creditor was incurred.

Notices otherwise advertised

176

The information required to be contained in a notice to which rule 175 applies must be included in the advertisement of that notice in a manner that is reasonably likely to ensure, in relation to the form of the advertising used, that a person reading, hearing or seeing the advertisement, will be able to read, hear or see that information.

Omission of unobtainable information

177

Information required by rules 174 and 175 to be included in a notice may be omitted if it is not reasonably practicable to obtain it.

CHAPTER 3 — Notifications to the registrar of companies

Application of Chapter 3

178

This Chapter applies where under the Regulations or these Rules information is to be sent or delivered to the registrar of companies.

Information to be contained in all notifications to the registrar

179

Where under the Regulations or these Rules a return, notice, or any other document or information is to be sent to the registrar of companies, that notification must specify—

• (a) the registered name of the investment bank;

• (b) its registered number;

• (c) the nature of the notification;

• (d) the regulation or the rule under which the notification is made;

• (e) the date of the notification;

• (f) the name and postal address of person making the notification; and

• (g) the capacity in which that person is acting in respect of the investment bank; and

the notification must be authenticated by the person making the notification.

Notification relating to the administrator

180

In addition to the information required by rule 179, a notification relating to the office of the administrator must also specify—

• (a) the name and business address of the administrator;

• (b) the date of the event notified;

• (c) where the notification relates to an appointment, the person, body or court making the appointment; and

• (d) where the notification relates to the termination of an appointment, the reason for that termination (for example, resignation).

Notifications relating to documents

181

In addition to the information required by rule 179, a notification relating to a document (for example, a statement of affairs) must also specify—

• (a) the nature of the document; and

• (b) either—

• (i) the date of the document; or

• (ii) where the document relates to a period of time (for example a report) the period of time to which the document relates.

Notifications relating to court orders

182

In addition to the information required by rule 179, a notification relating to a court order must also specify—

• (a) the nature of the court order; and

• (b) the date of the order.

Notifications relating to other events

183

In addition to the information required by rule 179, a notification relating to any other event (for example, the coming into force of a moratorium) must specify—

• (a) the nature of the event including the regulation or rule under which it took place; and

• (b) the date the event occurred.

Notifications of more than one nature

184

A notification which includes a notification of more than one nature must satisfy the requirements applying in respect of each of those notifications.

Notifications made to other persons at the same time

185

• (1) Where under the Regulations or these Rules a notice or other document is to be sent to another person at the same time that it is to be sent to the registrar of companies, that requirement may be satisfied by sending to that other person a copy of the notification sent to the registrar.

• (2) Paragraph (1) does not apply—

• (a) where additional information is prescribed for the notification to the other person; or

• (b) where the notification to the registrar of companies is incomplete.

CHAPTER 4 — Further provisions concerning documents

Confidentiality of documents

186

• (1) Where the administrator considers, in the case of a document forming part of the records of the special administration—

• (a) that it should be treated as confidential, or

• (b) that it is of such a nature that its disclosure would be calculated to be injurious to the interests of the investment bank’s creditors, clients, members or contributories,

the administrator may decline to allow it to be inspected by a person who would otherwise be entitled to inspect it.

• (2) The persons who may be refused the right to inspect documents under this rule by the administrator include the members of a creditors’ committee.

• (3) Where under this rule the administrator refuses inspection of a document, the person who made that request may apply to the court for an order to overrule the refusal and the court may either overrule it altogether, or sustain it, either unconditionally or subject to such conditions, if any, as it thinks fit to impose.

• (4) Nothing in this rule entitles the administrator to decline to allow inspection of any claim or proxy.

Right to inspect documents, to have list of creditors and to copy documents

187

• (1) Subject to rule 186, the following persons have the right to inspect documents held by the administrator—

• (a) a person who is or was an officer of the investment bank;

• (b) a member of the investment bank;

• (c) any person stating in writing to be a creditor of the investment bank;

• (d) any person stating in writing to be a client of the investment bank;

• (e) any person stating in writing to be a contributory of the investment bank;

• (f) a member of the creditors’ committee;

• (g) in a special administration (bank insolvency) the Bank of England or the FSCS;

• (h) in a special administration (bank administration) the Bank of England and, if there are depositors, the FSCS;

• (i) the FSA.

• (2) A right of inspection may be exercised on a person’s behalf by anyone authorised by that person in writing.

• (3) Subject to rule 186, any of the persons listed in paragraph (1) also has the right to require the administrator to furnish that creditor with a list of the investment bank’s creditors and the amounts of their respective debts.

• (4) Where the administrator is requested by any of the persons listed in paragraph (1) to supply a copy of any document, the administrator is entitled to require payment of the appropriate fee in respect of the supply of that copy.

• (5) Where a person has the right to inspect documents, the right includes that of taking copies of those documents, on payment of the appropriate fee.

Sederunt book

188

• (1) The administrator shall maintain a sederunt book during their term of office for the purpose of providing an accurate record of the special administration.

• (2) Without prejudice to the generality of the above paragraph, there shall be in the sederunt book a copy of anything required to be recorded in it by provision of the Regulations or of these Rules.

• (3) The administrator shall make the sederunt book available for inspection at all reasonable hours by any interested person.

• (4) Any entry in the sederunt book shall be sufficient evidence of the facts in that entry, except where it is founded on by the administrator in their own interest.

• (5) Without prejudice to paragraph (3), the administrator shall retain, or shall make arrangements for retention of, the sederunt book for a period of ten years from the date the special administration ends, in accordance with paragraph 79 or 84 (as applied by regulation 15) and regulation 20 or 21.

• (6) Where the sederunt book is maintained in non-documentary form, it shall be capable of reproduction in legible form.

Disposal of investment bank’s books, papers and other records

189

• (1) Where an investment bank is in special administration, the administrator shall dispose of the books, papers and records of the investment bank either in accordance with—

• (a) the directions of the creditors’ committee (if any); or

• (b) where there is no such committee, the court,

or, if, by the date which is 12 months after the dissolution of the investment bank, no such directions have been given, the administrator may do so after that date in such a way as the administrator deems appropriate.

• (2) An administrator or former administrator (“A”) shall within 14 days of a request by the Secretary of State give the Secretary of State particulars of any money in A’s hands or under A’s control representing unclaimed or undistributed assets of the investment bank or dividends or other sums due to any person as a member or former member of the investment bank.

CHAPTER 5 — Further provisions concerning the administrator

Administrator’s caution

190

• (1) Wherever under these Rules any person has to appoint an administrator, that person must be satisfied before making the appointment that the person appointed or to be appointed has caution for the proper performance of the functions of that office.

• (2) It is the duty of the creditors’ committee to review from time to time the adequacy of the administrator’s caution.

• (3) The cost of the administrator’s caution shall be paid as an expense of the proceedings.

Information about time spent on the special administration

191

• (1) Subject as set out in this rule, the administrator must, on request in writing by any person mentioned in paragraph (2), supply free of charge to that person a statement of the kind in paragraph (3).

• (2) The persons referred to in paragraph (1) are—

• (a) any director of the investment bank; or

• (b) any creditor, client or member of the investment bank.

• (3) The statement referred to in paragraph (1)—

• (a) must comprise the following details—

• (i) the total number of hours spent on the special administration by the administrator or a former administrator and any staff assigned to the special administration during the period covered by the statement,

• (ii) for each grade of individual so engaged, the average hourly rate at which any work carried out by individuals in that grade is charged, and

• (iii) the number of hours spent by each grade of staff during that period; and

• (b) must cover the period beginning with the date of the appointment of that person as administrator and ending—

• (i) with the date next before the date of making the request on which that person has completed any period as administrator, which is a multiple of 6 months, or

• (ii) where a person has ceased to act as administrator, the date upon which the person so ceased.

• (4) No request pursuant to this rule may be made where more than 2 years has elapsed since the person ceased to act as administrator.

• (5) Any statement required to be provided to any person under this rule must be supplied within 28 days of the date of the receipt of the request by the person required to supply it.

Service on joint administrators

192

Where there are joint administrators in a special administration, service on one of them is to be treated as service on all of them.

CHAPTER 6 — Transfer of proceedings

Proceedings commenced in the wrong court

193

Where a special administration is commenced in a court other than the Court of Session, that court may order the transfer of the proceedings to the Court of Session.

Proceedings other than special administration commenced

194

• (1) Where—

• (a) a winding-up order or an administration order has been made in respect of an investment bank; or

• (b) a resolution has been made for the winding up of or for the appointment of an administrator of an investment bank,

the Authority may apply to the court for an order that the proceedings be converted to a special administration, a special administration (bank insolvency) or a special administration (bank administration) as the case may be.

• (2) In making an order under paragraph (1), the court shall give such directions as it sees fit, including directions as to the former officer-holder’s remuneration and expenses.

• (3) An application under paragraph (1) may be made without notice.

• (4) Without prejudice to the generality of the court’s power in paragraph (1), where the person (“P”) appointed as office-holder under the original proceedings is not the same person as the administrator of the special administration, the court may direct that—

• (a) P be sent a copy of the order under paragraph (1) by the administrator;

• (b) P hand over—

• (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); or 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).

Signed

Jeremy Wright — James Duddridge — Two of the Lords Commissioners of Her Majesty’s Treasury — 12th September 2011

Explanatory note

(This note is not part of the Rules)

EXPLANATORY NOTE

These Rules set out the procedure in Scotland for the investment bank special administration process under the Investment Bank Special Administration Regulations 2011 (S.I. 2011/245) (“the Regulations”).

The main features of investment bank special administration are that:

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

• (d) the order appoints an administrator;

• (e) 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

• (f) in other respects the procedure is similar to administration under Schedule B1 to the Insolvency Act 1986 (c.45).

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 to the Regulations.

Part 2 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 sets out the process of the special administration.

Part 4 provides for the expenses of the special administration.

Part 5 provides for the pursuit of Objective 1 set out in the Regulations (to ensure the return of client assets as soon as reasonably practicable).

Part 6 provides for distributions to creditors.

Part 7 sets out rules concerning the administrator (and there are further rules concerning the administrator in Chapter 5 of Part 11).

Part 8 provides for the end of the special administration.

Part 9 sets out special rules in respect of court procedure and practice.

Part 10 provides for the application of section 216 of the Insolvency Act 1986 (as applied by the Regulations).

Part 11 contains provisions of general effect.

The Rules apply to investment banks incorporated as companies and also to investment banks that are limited liability partnerships by virtue of paragraph 6 of Schedule 3 to the Regulations which applies the Rules with such modifications as the context requires for giving effect to the Regulations.

An impact assessment of the effect that these Rules will have on the costs of business and the voluntary sector is available from the Financial Regulatory Strategy Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ. It is also published with the Explanatory Memorandum alongside the Rules on legislation.gov.uk and on HM Treasury’s website (www.hm-treasury.gov.uk).

Footnotes

[^f00001]: 1986 c.45: section 411 is applied with modifications by regulation 15 of S.I. 2011/245; subsections (1A) and (2C) were inserted by and subsections (2) and (3) amended by sections 125 and 160 of the Banking Act 2009 (c.1); subsection (2) was also amended by S.I. 2009/1941 and subsection (3) was also amended by S.I. 2007/2194.

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

[^f00003]: 1985 c.66.

[^f00004]: 2006 c.46.

[^f00005]: 2009 c.1.

[^f00006]: Section 52 was amended by the Bankruptcy (Scotland) Act 1993 (c.6), section 11(3) and Schedule 1; the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), sections 36 and 226(2) and schedule 1 and schedule 6, Part 1; and S.I. 2003/2109.

[^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, 2005/879, 2007/2974, 2008/948, 2008/1897, 2009/1941 and 2010/18.

[^f00011]: S.I. 1994/1443, last amended by S.S.I. 2011/303.

[^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), Schedule 17, paragraphs 9, 24.

[^f00014]: S.I. 1986/1915. Schedule 5 was amended by S.I. 2003/2111 and 2006/734; there are other amending instruments but none is relevant.

[^f00015]: Section 176A was inserted by section 252 of the Enterprise Act 2002 (c. 40) and amended by S.I. 2008/948.

[^f00016]: Section 50 has been amended by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), section 226(2), schedule 6 Part 1, and S.I. 2003/2109.

[^f00017]: Section 246A was inserted by S.I. 2010/18.

[^f00018]: Section 176A was inserted by the Enterprise Act 2002 (c.40), section 252 and was amended by S.I. 2008/948.

[^f00019]: 2006 c.46; section 323 was amended by S.I. 2009/1632.

[^f00020]: 1995 c.7.

[^f00021]: 1985 c.66; sections 22(5), 48(5) and (8), 49(1) to (5), 50(1) and 60(2) and paragraphs 3 and 5 of Schedule 1 have been amended by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), section 226(2), schedule 6, Part 1; section 49(2A) was inserted by section 8(3) of that Act, section 49(6) has been amended by section 31(1)(a) of that Act, and section 49(6A) was inserted by section 31(1)(b) of that Act; section 50(1) has also been amended by S.I. 2003/2109.

[^f00022]: Section 386 has been amended by section 251 of the Enterprise Act 2002 (c.40) and Schedule 8 to the Pension Schemes Act 1993 (c.48).

[^f00023]: Section 242 has been amended by Schedule 17 to the Enterprise Act 2002.

[^f00024]: Subsection (1) of section 52 has been amended by the Bankruptcy (Scotland) Act 1993 (c.6), section 11(3) and Schedule 1, paragraph 21; subsections (1) to (9) of section 52 have been amended by the Bankruptcy and Diligence etc. (Scotland) Act 2007, section 226(2), schedule 6, Part 1; subsection (2) has also been amended by section 36 of, and schedule 1, paragraph 44(1) and (2)(b) to, that Act; subsection (2ZA) has been inserted by section 36 of, and schedule 1, paragraph 44(1) and (3) to, that Act; and subsections (10) and (11) have been inserted by S.I. 2003/2109.

[^f00025]: Subsections (1) and (3) of section 58 have been amended by the Bankruptcy (Scotland) Act 1993, Schedule 1, paragraph 25.

[^f00026]: 2000 c. 8.

[^f00027]: 1986 c.45; section 176A was inserted by the Enterprise Act 2002 (c.40), section 252 and amended by S.I. 2008/948.

[^f00028]: Section 431 has been amended by the Criminal Procedure (Consequential Provisions) (Scotland) Act 1995 (c.40), Schedule 4.

[^f00029]: Section 246B was inserted by S.I. 2010/18.