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The Payment and Electronic Money Institution Insolvency Regulations 2021

Type Statutory-Instrument

Publication 2021-06-17

Last updated 2025-04-06

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Reform history JSON API

Provision	Subject	Modifications
Sections	Sections	Sections
Generally (for the provisions of this part of the table mentioned below)		To be read as if—(a) references to a provision of the IA 1986 which is applied and modified by these Regulations were to the provision as applied and modified by these Regulations,(b) references to the liquidator were to the administrator,(c) references to winding up were to special administration,(d) references to winding up by the court were to the imposition of special administration by order of the court,(e) references to being wound up under Part 4 or 5 of the IA 1986 were to being in special administration,(f) references to the commencement of winding up were to the commencement of special administration,(g) references to going into liquidation were to entering special administration,(h) references to liquidation or to insolvent liquidation were to special administration,(i) references to a winding-up order were to a special administration order, and(j) references to a company were to an institution.Those general modifications are subject to any specific modifications below.
Sections 74 and 76–83	Contributories
Section 167 (and Schedule 4)	Powers of the liquidator	To be read as if—(a)in subsection (2) the references to a liquidation committee were to a creditors’ committee;(b)a user or holder may also apply to the court under subsection (3);(c) in Schedule 4, paragraphs 4 to 10 and 12 were omitted and in paragraph 13, the reference to winding up the company’s affairs and distributing its assets were to pursuing the special administration objectives.
Section 168(4)	Discretion in managing and distributing assets
Section 176	Preferential charges on goods distrained
Section 176ZB	Application of proceeds of office-holder claims
Section 176A	Unsecured creditors
Section 178	Disclaimer of onerous property
Section 179	Disclaimer of leaseholds
Section 180	Land subject to rent charge
Section 181	Disclaimer: powers of court
Section 182	Powers of court (leaseholds)
Section 183	Effect of execution or attachment (England and Wales)	To be read as if subsection (2)(a) were omitted.
Section 184	Duties of officers	To be read as if, in subsection (1), there were no reference to a resolution having been passed for voluntary winding up.
Section 185	Effect of diligence (Scotland)	To be read as if, in the application of subsections (3) to (10) of section 23A of the Bankruptcy (Scotland) Act 2016 (asp 21), the reference to an order of the court awarding winding up were to the making of the special administration order.
Section 186	Rescission of contracts by the court
Section 187	Power to make over assets to employees
Section 193	Unclaimed dividends (Scotland)
Section 194	Resolutions passed at adjourned meetings	To be read as it applied immediately before its repeal by paragraph 46 of Schedule 9 to the SBEEA 2015.
Section 196	Judicial notice of court documents
Section 197	Commission for receiving evidence
Section 198	Court order for examination of persons in Scotland
Section 199	Costs of application for leave to proceed (Scottish companies)
Section 206	Fraud in anticipation of winding up	To be read as if, in subsection (1), there were no reference to passing a resolution for voluntary winding up.
Section 207	Transactions in fraud of creditors	To be read as if, in subsection (1), there were no reference to passing a resolution for voluntary winding up.
Section 208	Misconduct in course of winding up	To be read as if—(a) in subsection (1), “whether by the court or voluntarily” were omitted;(b) there were no amendment made by paragraph 52 of Schedule 9 to the SBEEA 2015.
Section 209	Falsification of company’s books
Section 210	Material omissions from statement	To be read as if—(a)in subsection (1), “whether by the court or voluntarily” were omitted;(b) in subsection (2), “or has passed a resolution for voluntary winding up” were omitted.
Section 211	False representation to creditors	To be read as if in subsection (1)—(a)“whether by the court or voluntarily” were omitted;(b) the reference to the company’s creditors included users or holders.
Section 212	Summary remedy
Section 213	Fraudulent trading
Section 214	Wrongful trading	To be read as if subsection (6) were omitted.
Section 215	Proceedings under section 213 or 214
Section 216	Restriction on re-use of company names	To be read as if—(a)the reference to a liquidating company were to a company in special administration;(b)subsections (7) and (8) were omitted.
Section 217	Personal liability for debts following contravention of section 216	To be read as if subsection (6) were omitted.
Section 218	Prosecution of delinquent officers and members of company	To be read as if —(a) in subsection (3), the first reference to the official receiver were omitted and the second reference were to the Secretary of State;(b) in subsection (5) the reference to subsection (4) were to subsection (3);(c)subsections (4) and (6) were omitted.
Section 219	Obligations arising under section 218	To be read as if, in subsection (1), the reference to section 218(4) were to section 218(3).
Section 233	Utilities
Section 233A	Further protection of utilities
Section 234	Getting in the company’s property	To be read as if —(a) for subsection (1) there were substituted—“(1) This section applies where a company enters special administration.”;(b) the references to the office-holder were references to the administrator.
Section 235	Co-operation with the administrator	To be read as if —(a)subsections (1) and (4)(b) to (d) were omitted;(b) the references to the office-holder were references to the administrator.
Section 236	Inquiry into company’s dealings	To be read as if —(a)for subsection (1) there were substituted—“(1) This section applies where a company enters special administration.”;(b) the references to the office-holder were references to the administrator.
Section 237	Enforcement by the court
Section 238	Transactions at an undervalue (England and Wales)
Section 239	Preferences (England and Wales)
Section 240	Sections 238 and 239: relevant time	To be read as if —(a)in subsection (2)(a), the reference to being unable to pay debts were to be read in accordance with section 93(4) of the BA 2009 (as applied and modified by the EMR 2011 and the PSR 2017);(b) sub-paragraphs (1)(d) and (3)(a) to (d) were omitted.
Section 241	Orders under sections 238 and 239	To be read as if subsections (3A) and (3B) were omitted.
Section 242	Gratuitous alienations (Scotland)
Section 243	Unfair preferences (Scotland)
Section 244	Extortionate credit transactions
Section 245	Avoidance of floating charges	To be read as if —(a)in subsection (3)(c), the references to administration application and administration order were references to an application for special administration and special administration order respectively;(b) in subsection (4)(a) and (b), the reference to being unable to pay debts were to be read in accordance with section 93(4) of the BA 2009 (as applied and modified by the EMR 2011 and the PSR 2017);(c) subsections (3)(d) and (5)(a) to (c) were omitted.
Section 246	Unenforceability of liens	To be read as if —(a)for subsection (1) there were substituted—“(1) This section applies where a company enters special administration.”;(b)the references to the office-holder were references to the administrator.
Section 246ZD	Power to assign certain causes of action	To be read as if—(a) for subsection (1) there were substituted—“(1) This section applies where a company enters special administration.”;(b) the references to the office holder were references to the administrator.
Section 246A	Remote attendance at meetings	To be read as if —(a)there were no amendments made by paragraph 54 of Schedule 9 to the SBEEA 2015;(b) references to creditors included users or holders.
Section 246B	Use of websites
Section 386 (and Schedule 6 as read with Schedule 4 to the Pensions Schemes Act 1993)	Preferential debts
Section 387, subsections (1) and (3A)	“The relevant date”	To be read as if the reference to “administration” were to special administration.
Section 389	Offence of acting without being qualified	To be read as if—(a) the reference to acting as an insolvency practitioner were to acting as the administrator;(b) subsection (2) were omitted.
Sections 390 to 391T	Authorisation and regulation of insolvency practitioners	To be read as if—(a) in section 390, references to acting as an insolvency practitioner were to acting as the administrator;(b) in subsection (2) of that section, after “authorised” there were inserted “to act as an insolvency practitioner”;(c) an order under section 391 had effect in relation to any provision applied for the purposes of special administration;(d) in sections 390A, 390B(1) and (3), 391O(1)(b) and 391R(3)(b), references to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies had effect as a reference to companies without modification by this Table.(e) in sections 391Q(2)(b) and 391S(3)(e) the references to a company had effect a references to a company without modification by this Table.
Section 411	Insolvency rules	To be read as if, in subsections (1A), (2C) and (3), the reference to Part 2 of the BA 2009 were to a reference to these Regulations.
Section 414	Fees orders	To be read as if —(a)in subsection (1), the reference to Parts I to VII of this Act were to these Regulations;(b) there were no reference to the official receiver.
Section 423	Transactions defrauding creditors	To be read as if subsection (4) were omitted.
Sections 424 and 425	Transactions defrauding creditors
Section 426	Co-operation between courts	To be read as if references to insolvency law included provisions made by or under these Regulations.
Sections 430 and 431 (and Schedule 10)	Offences
Section 432	Offences by bodies corporate	To be read as if, in subsection (4), there were no provisions of the IA 1986 listed there except for sections 206 to 211.
Section 433	Statements: admissibility
Sections 434B–434D	Supplementary provisions	To be read as if there were no amendments of section 434B made by paragraph 57 of Schedule 9 to the SBEEA 2015.
Schedule B1	Schedule B1	Schedule B1
Generally (for the provisions of this part of the table mentioned below)		To be read as if—(a) references to a provision of the IA 1986 which is applied and modified by these Regulations were to the provision as applied and modified by these Regulations,(b) references to the administrator were to the administrator appointed under regulation 7,(c) references to administration were to special administration,(d) references to an administration order were to a special administration order,(e) references to a company were to an institution, and(f) references to the purpose of administration were to the special administration objectives.Those general modifications are subject to any specific modifications below.
Paragraph 40(1)(a)	Dismissal of pending winding up petition
Paragraph 42	Moratorium on insolvency proceedings	To be read as if sub-paragraphs (4)(a) and (4)(aa) were omitted.
Paragraph 43	Moratorium on other legal processes
Paragraph 44(1), (5) and (7)	Interim moratorium	To be read as if—(a) sub-paragraph (7) also included a reference to paragraph 44 not preventing or requiring the permission of the court for an application by the FCA for a special administration order;(b) sub-paragraph (7)(b) to (d) were omitted.
Paragraph 45	Publicity
Paragraph 46	Announcement of administrator’s appointment	To be read as if —(a)in sub-paragraph (3)(a), in addition to obtaining the list of creditors, the administrator were also required to obtain as complete a list as possible of the users or holders of the institution;(b)in sub-paragraph (3)(b), the administrator were also required to send a notice of their appointment to each user or holder of whose claim and address the administrator is aware;(c)where the special administration application has not been made by the FCA, notice of the administrator’s appointment were also required to be sent under sub-paragraph (5) to the FCA;(d) sub-paragraphs (6)(b) and (c) were omitted.
Paragraph 47	Statement of company’s affairs	To be read as if, in sub-paragraph (2), there were also a reference to including particulars of the relevant funds held by the institution.
Paragraph 48	Statement of company’s affairs
Paragraph 49	Administrator’s proposals	To be read as if —(a) sub-paragraph (2)(b) were omitted;(b) there were no amendment made by paragraph 10(2) of Schedule 9 to the SBEEA 2015;(c) in sub-paragraph (4), the administrator were also required to send a copy of the statement of proposals to every user or holder of whose claim the administrator is aware and who the administrator has a means of contacting, and to the FCA;(d) the administrator were also required to give notice that the statement of proposals is to be provided free of charge to a payment system operator who applies in writing to a specified address.The application of paragraph 49(1) to (3) is subject to regulation 38(6).
Paragraph 50	Creditors’ meeting	To be read as if —(a) there were no repeal by paragraph 10(3) of Schedule 9 to the SBEEA 2015;(b) in sub-paragraph (1), the administrator were also required to summon the users or holders referred to in paragraph 49(4) to the meeting of creditors and to give such users or holders notice under sub-paragraph (1)(b);(c) the FCA were empowered to appoint a person to attend a meeting of creditors and make representations as to any matter for decision.
Paragraph 51	Requirement for initial creditors’ meeting	To be read as if —(a) there were no amendments made by paragraph 10(4) and (5) of Schedule 9 to the SBEEA 2015;(b) there were a requirement that each copy of an administrator’s proposals sent to a user or holder or the FCA under paragraph 49 be accompanied by an invitation to the initial creditors’ meeting.The application of paragraph 51 is subject to regulation 38(6).
Paragraph 53	Business and result of initial creditors’ meeting	To be read as if —(a) there were no amendments made by paragraph 10(8) to (10) of Schedule 9 to the SBEEA 2015;(b) there were a requirement that special administration insolvency rules prescribe how users or holders are to vote at meetings of creditors;
		(c) in sub-paragraph (2), if the FCA has not appointed a person to attend the meeting, the administrator were also required to report any decision taken to the FCA.The application of paragraph 53 is subject to regulation 38(6).
Paragraph 54	Revision of administrator’s proposals	To be read as if —(a) there were no amendments made by paragraph 10(11) to (16) of Schedule 9 to the SBEEA 2015;(b)if the revision proposed by the administrator affects both creditors and users or holders, every reference to creditors included users or holders;(c)if the administrator thinks that the revision proposed only affects either creditors or users or holders, it only applied to the affected party and required the party not affected to be informed of the revision;(d)the FCA were required to be invited to the creditors’ meeting mentioned in sub-paragraph (2)(a);(e)the statement of the proposed revision mentioned in sub-paragraph (2)(b) were also required to be sent to the FCA.The application of paragraph 54 is subject to regulation 38(6).
Paragraph 55	Failure to obtain approval of administrator’s proposals	To be read as if —(a) there were no amendment made by paragraph 10(17) of Schedule 9 tothe SBEEA 2015;(b) in making an order under sub-paragraph (2) the court were required to have regard to the special administration objectives;(c) sub-paragraph (2)(d) were omitted.The application of paragraph 55 is subject to regulation 38(6).
Paragraph 56	Further creditors’ meetings	To be read as if —(a) there were no amendments made by paragraph 10(18) to (20) of Schedule 9 to the SBEEA 2015;(b) the administrator were required to invite the FCA to any meeting summoned.
Paragraph 57	Creditors’ committee	To be read as if —(a) there were no amendment made by paragraph 10(21) of Schedule 9 to the SBEEA 2015;(b) a creditors’ committee were only able to be established by a creditors’ meeting to which creditors and users or holders have both been given notice;(c) the FCA were empowered to appoint a person to attend a meeting of the creditors’ committee and make representations as to any matter for decision;(d) there were a requirement that special administration insolvency rules prescribe that, where a meeting of creditors resolves to establish a creditors’ committee, the makeup of the creditors’ committee is a reflection of all parties with an interest in the achievement of the special administration objectives.
Paragraph 58	Correspondence instead of creditors’ meeting	To be read as it applied immediately before its repeal by paragraph 10(22) of Schedule 9 to the SBEEA 2015.
Paragraph 59	Functions of an administrator	To be read as if—(a) in sub-paragraph (1) the administrator’s power were to do anything necessary or expedient in pursuit of Objectives 1 to 3;(b) in sub-paragraph (2) the reference to a provision of the Schedule expressly permitting the administrator to do a specified thing included a provision of these Regulations expressly permitting the administrator to do a specified thing;(c) at the end there were inserted—“(4) The administrator is an officer of the court.”
Paragraph 60 (and Schedule 1 to the IA 1986)	General powers
Paragraph 61	Directors
Paragraph 62	Power to call meetings	To be read as if —(a) there were no amendment made by paragraph 10(23) of Schedule 9 to the SBEEA 2015;(b) the administrator were also empowered to call a meeting of users or holders or contributories.
Paragraph 63	Application to court for directions
Paragraph 64	Management powers
Paragraph 65	Distribution to creditors	To be read as if— (a) in sub-paragraph (1)—(i) the words from the beginning to “in full” were omitted;(ii) for “any other creditor” there were substituted “any creditor”;(b) sub-paragraph (3) were omitted in respect of England and Wales.
Paragraph 66	Payments	To be read as if the words from the beginning to “have been met,” were omitted;
Paragraph 67	Property
Paragraph 68	Management	To be read as if references to proposals approved under paragraphs 53 or 54 included, without need for approval—(a) proposals agreed with the FCA under 39 or 40; or(b) proposals in respect of which the court has made an order dispensing with the need for agreement in accordance with those regulations.
Paragraph 69	Agency
Paragraph 70	Floating charge
Paragraph 71	Non-floating charge
Paragraph 72	Hire purchase property
Paragraph 73	Protection for secured or preferential creditors	To be read as if sub-paragraph (2)(d) were omitted.
Paragraph 74	Challenge to administrator’s conduct	To be read as if —(a) there were no amendment made by paragraph 10(24) of Schedule 9 to the SBEEA 2015;(b) the FCA were also empowered to make an application to the court, on the grounds that—(i) the administrator is acting or has acted so as unfairly to harm the interests of some or all of the members, creditors or users or holders;(ii) the administrator is proposing to act in a way which would unfairly harm the interests of some or all of the members, creditors or users or holders;(iii) the administrator has failed to carry out a reconciliation in accordance with regulation 13;(c)a user or holder were also empowered to make an application to the court under sub-paragraph (1) or (2);(d)any of the following persons were also empowered to make an application on the grounds that the administrator is not taking any action in response to a request from that person under regulation 35(3) and that the person is of the opinion that the action requested would not lead to a material reduction in the value of the property of the institution—(i)the Bank of England;(ii) the Treasury;(iii) the FCA;(iv)the Payment Systems Regulator;(e)the following persons were also empowered to make an application on the grounds that the administrator has made, or proposes to make, a PPTA in contravention of 32 or 34—(i)the Bank of England;(ii) the FCA;(f)any person, other than the institution, who is party to an arrangement of a kind referred to in regulation 31(1) were also empowered to make an application on the grounds that the administrator has made, or proposes to make, a relevant transfer in contravention of that regulation;(g)where an application is made on the grounds that the administrator has made a relevant transfer in contravention of regulation 34—(i)sub-paragraphs (3)(a), (d) and (e) and (4) were omitted;(ii)the court were also empowered to make an order declaring that the transfer was made in contravention of the regulation concerned;(h)where an application is made on the grounds that the administrator has made a relevant transfer in contravention of regulation 32 or 33, the court were also empowered to make such order as it thinks fit for restoring the position to what it would have been if the transfer had not been made in contravention of the regulation concerned;(i)where the FCA has given a direction under regulation 38 which has not been withdrawn, the court did not have power to make an order if it would impede or prevent compliance with the direction.
Paragraph 75	Misfeasance	To be read as if a user or holder and the FCA were included in the list of persons who may make an application under sub-paragraph (2).
Paragraph 79	Court ending administration on application of administrator	To be read as if sub-paragraph (2) were omitted.
Paragraph 81	Court ending administration on application of a creditor	To be read as if it did not apply where the administrator was appointed by the court on the application of the FCA or the Secretary of State.
Paragraph 84	Termination: no more relevant funds for distribution	To be read as if—(a)the administrator were only empowered to send a notice under sub-paragraph (1) if the institution no longer holds relevant funds;(b)there were no amendment made by paragraph 10(33) of Schedule 9 to the SBEEA 2015;
		(c) in sub-paragraph (5)(b), a copy of the notice were also required to be sent be sent to every user or holder of the institution of whom the administrator is aware and the FCA.
Paragraph 85	Discharge of administration order
Paragraph 86	Notice to Companies Registrar at the end of administration
Paragraph 87	Resignation	To be read as if —(a) where the administrator was appointed by the court on the application of the FCA or the Secretary of State, the notice of the resignation given in accordance with sub-paragraph (2)(a) were also required to be given to the applicant;(b)sub-paragraphs (2)(b) to (d) were omitted.
Paragraph 88	Removal
Paragraph 89	Disqualification	To be read as if —(a)where the administrator was appointed by the court on the application of the FCA or the Secretary of State, the notice given in accordance with sub-paragraph (2)(a) were also required to be given to the applicant;(b)sub-paragraphs (2)(b) to (d) were omitted.
Paragraph 90	Replacement	To be read as if reference to paragraphs 91 to 95 were to paragraph 91 only.
Paragraph 91	Replacement	To be read as if the FCA were included in the list of persons who may make an application to appoint an administrator in sub-paragraph (1) but to whom the restrictions in sub-paragraph (2) apply.
Paragraph 98	Discharge	To be read as if —(a)there were no amendment made by paragraph 10(38) of Schedule 9 to the SBEEA 2015;(b) sub-paragraphs (2)(b) and (ba) and (3) were omitted.
Paragraph 99	Vacation of office: charges and liabilities	To be read as if —(a)in sub-paragraph (3), the former administrator’s remuneration and expenses incurred in respect of the pursuit of Objective 1 are to be charged on and payable out of relevant funds;
		(b)in sub-paragraph (4)(b), the reference to any charge arising under sub-paragraph (3) did not include a charge on relevant funds.
Paragraph 100	Joint and concurrent administrators
Paragraph 101	Joint and concurrent administrators	To be read as if in sub-paragraph (3), the reference to paragraphs 87 to 99 were to paragraphs 87 to 91 and 98 to 99.
Paragraph 102	Joint and concurrent administrators
Paragraph 103	Joint and concurrent administrators	To be read as if —(a)in sub-paragraph (2), the reference to paragraph 12(1)(a) to (e) were to regulation 8(1);(b)sub-paragraphs (3) to (5) were omitted.
Paragraph 104	Presumption of validity
Paragraph 105	Majority decision of directors
Paragraph 106 (and section 430 of and Schedule 10 to the IA 1986)	Fines	To be read as if —(a)there were no amendments made by paragraph 11 of Schedule 9 to the SBEEA 2015;(b) sub-paragraph (2)(a), (b) and (l) to (n) was omitted.
Paragraph 107	Extension of time limit	To be read as if, in considering an application under paragraph 107, the court were required to have regard to the special administration objectives.
Paragraph 108	Extension of time limit	To be read as if —(a)there were no amendments made by paragraph 10(39), (40), (42) and (43) of Schedule 9 to the SBEEA 2015;(b)the administrator were also required to obtain consent of those users or holders whose claims amount to more than 50% of the total amount of claims for relevant funds, disregarding the claims of those users or holders who were sent a copy of the statement of proposals but who did not respond to an invitation to give or withhold consent;(c)sub-paragraph (3) were omitted.
Paragraph 109	Extension of time limit
Paragraph 111	Interpretation	To be read as if —(a)there were no amendment made by paragraph 10(44) of Schedule 9 to the SBEEA 2015;(b) the definition of “administrator” and sub-paragraph (1A) and sub-paragraph (1B) were omitted.
Paras 112–116	Scotland

FCA direction

38

(1) The FCA may direct the administrator to prioritise one or more special administration objectives, subject as follows.

(2) A direction may only be given if the FCA is satisfied that the giving of the direction is necessary, having regard to the public interest in—

(a) the stability of the financial systems of the United Kingdom,

(b) the maintenance of public confidence in the stability of the financial markets, payment systems and payment services and electronic money sectors of the United Kingdom, or

(3) A direction must be given in writing and should set out reasons for giving the direction.

(4) Before giving a direction the FCA must consult the Treasury and the Bank of England.

(5) If the FCA thinks that the circumstances that gave rise to the need for it to give a direction have passed, it must withdraw its direction.

(6) Where the FCA has given a direction under this regulation and the direction has not been withdrawn, the following provisions do not apply—

(a) in England and Wales and Scotland, paragraphs 49(1) to (3), 51, 53, 54 and 55 of Schedule B1 to the IA 1986;

(b) in Northern Ireland, paragraphs 50(1) to (3), 52, 54, 55 and 56 of Schedule B1 to the I(NI)O 1989.

Administrator’s proposals in the event of FCA direction

39

(1) Where the FCA has given a direction under regulation 38, the administrator must make a statement setting out proposals for achieving the special administration objectives in accordance with the direction.

(2) The statement must deal with any matters set out in special administration insolvency rules and may include—

(a) a proposal for a voluntary arrangement under Part 1 of the IA 1986 or, as the case may be, Part 2 of the I(NI)O 1989, or

(b) a proposal for a compromise or arrangement to be sanctioned under Part 26 or Part 26A of the CA 2006 (arrangements and reconstructions).

(3) The statement must be agreed with the FCA.

(4) If the administrator is unable to agree the statement with the FCA, the administrator may apply to the court for directions under paragraph 63 of Schedule B1 to the IA 1986 or, as the case may be, paragraph 64 of Schedule B1 to the I(NI)O 1989.

(5) Following an application under sub-paragraph (4), the court may—

(a) make an order dispensing with the need for agreement,

(b) adjourn the hearing conditionally or unconditionally, or

(6) But the court may make an order under sub-paragraph (5)(a) only if it considers that the proposals set out in the statement are reasonably likely to ensure that the administrator acts in accordance with the direction.

(7) Where the court makes an order, the administrator must as soon as possible send a copy of the order to the registrar of companies.

(8) After—

(a) the statement has been agreed with the FCA; or

(b) the court has made an order dispensing with the need for agreement,

paragraph 49(4) to (8) of Schedule B1 to the IA 1986 or, as the case may be, paragraph 50(4) to (8) of Schedule B1 to the I(NI)O 1989 applies to the statement (though the administrator need not send the FCA a copy of the statement of proposals).

(9) Paragraph (10) applies where, before the FCA gives its direction under regulation 38, a meeting of creditors has approved the statement of proposals in accordance with paragraph 53 of Schedule B1 to the IA 1986 or paragraph 54 of Schedule B1 to the I(NI)O 1989.

(10) The statement of proposals must be ignored for the purposes of regulation 38, this regulation and paragraph 68 of Schedule B1 to the IA 1986 or (as the case may be) paragraph 69 of Schedule B1 to the I(NI)O 1989.

(11) References in this regulation to a numbered paragraph of Schedule B1 to the IA 1986 or to the I(NI)O 1989 are to that paragraph as applied and modified by these Regulations.

Revision of proposals in the event of FCA direction

40

(1) This regulation applies where—

(a) the administrator’s statement of proposals under regulation 39 has been agreed with FCA (or the court has made an order dispensing with the need for agreement),

(b) the administrator proposes a revision to the proposals,

(d) the FCA has not withdrawn its direction given under regulation 38.

(2) The administrator must agree the revised statement with the FCA.

(3) Regulation 39(4) to (7) applies where the administrator is unable to agree the revised statement with the FCA.

(4) After the revised statement has been agreed with the FCA (or the court has made an order dispensing with the need for agreement) the administrator must send the revised statement to—

(a) every creditor of the institution of whose claim and address the administrator is aware,

(b) every user or holder of whose claim the administrator is aware and who the administrator has a means of contacting, and

(5) The administrator is to be taken to have complied with paragraph (4)(c) if the administrator publishes a notice undertaking to provide a copy of the revised statement free of charge to any member of the institution who applies in writing to a specified address.

(6) A notice under paragraph (5) must be published.

(7) The administrator must send a copy of the revised statement to—

(a) the court, and

(b) the registrar of companies.

FCA direction withdrawn

41

(1) This regulation applies if, after the administrator’s statement of proposals has been agreed with FCA or the court has made an order dispensing with the need for agreement under regulation 39, the direction is then withdrawn.

(2) If the administrator proposes a revision to the statement of proposals and the administrator thinks that the proposed revision is substantial, then paragraphs 54 and 55 of Schedule B1 to the IA 1986 or, as the case may be, paragraphs 55 and 56 of Schedule B1 to the I(NI)O 1989, apply (as modified by these Regulations).

Safeguarding failures: costs of the administration

42

(1) Where the administrator considers that failure-related costs have been incurred in consequence of a failure by the institution to safeguard relevant funds (“a default”), the administrator—

(a) must seek the agreement of the creditors’ committee established under paragraph 57 of Schedule B1 to the IA 1986 or, as the case may be, paragraph 58 of Schedule B1 to the I(NI)O 1989, as applied and modified by these Regulations to the amount incurred in consequence of the default, or

(b) if there is no creditors’ committee or the administrator is unable to agree that amount with the creditors’ committee, must apply to the court for an order fixing the amount.

(2) In paragraph (1) “failure” includes where—

(a) a small payment institution, or

(b) in the case of funds received for the execution of payment transactions that are not related to the issuance of electronic money, a small electronic money institution,

held itself out to be one which voluntarily safeguarded relevant funds but failed to do so.

(3) On an application under paragraph (1)(b), the court may fix the amount incurred in consequence of the default or dismiss the application on the ground that there was no default or that no failure-related costs have been incurred in consequence of the default.

(4) Paragraph (5) applies where the creditors’ committee agree an amount incurred in consequence of the default or the court fixes an amount by order.

(5) Responsibility for the failure-related costs amount is assigned to the institution and the amount is to be paid out of the institution’s assets.

(6) Where the institution’s assets are insufficient to enable the failure-related costs amount to be met out of those assets, paragraph (5) has effect only in relation to that part of the amount which can be met out of those assets.

(7) In this regulation—

“failure-related costs” means costs incurred by the administrator in applying the procedure set out in Schedule B1 as applied and modified by these Regulations for ascertaining particulars of the relevant funds held by the institution, and in taking custody and control of and distributing those funds;

“failure-related costs amount” means the amount of failure-related costs incurred in consequence of the default as agreed by the creditors’ committee or fixed by the court.

Successful rescue

43

(1) This regulation applies if the administrator has—

(a) in pursuit of Objective 3, pursued the rescue of the institution as a going concern, and

(b) thinks that this has been sufficiently achieved.

(2) The administrator must make an application in accordance with paragraph 79 of Schedule B1 to the IA 1986 or, as the case may be, paragraph 80 of Schedule B1 to the I(NI)O 1989, as applied and modified by these Regulations.

(3) An administrator who makes an application referred to in paragraph (2) must send a copy to the FCA.

Dissolution or voluntary arrangement

44

(1) This regulation applies if the administrator—

(a) believes that Objectives 1 and 2 have been sufficiently achieved, and

(b) in pursuit of Objective 3, pursues the winding up of the institution in the best interests of the creditors.

(2) The administrator may—

(a) give a notice in accordance with paragraph 84 of Schedule B1 to the IA 1986 or, as the case may be, paragraph 85 of Schedule B1 to the I(NI)O 1989 as applied and modified by these Regulations; or

(b) make a proposal in accordance with Part 1 of the IA 1986 or, as the case may be, Part 2 of the I(NI)O 1989 (company voluntary arrangement).

(3) The following provisions apply to a proposal made by an administrator—

(a) Part 1 of the IA 1986, with the modifications set out in paragraphs (4) to (6), (7) and (8), or

(b) Part 2 of the I(NI)O 1989, with the modifications set out in paragraphs (6A) to (8).

(4) Section 3 (consideration of proposals) is to be read as if subsection (2) (and not subsection (1)) applies.

(5) Section 5(3) (effect of approval) is to be read as if the action that may be taken by a court includes suspension of the special administration order.

(6) Sections 2 to 6 and 7 have effect without the amendments of those provisions made by paragraphs 2 to 8 of Schedule 9 to the SBEEA 2015 (company voluntary arrangements).

(6A) Article 16 (summoning of meetings) is to be read as if paragraph (2) (and not paragraph (1)) applies.

(6B) Article 18(3) (effect of approval) is to be read as if the action which may be taken by the court includes suspension of the special administration order.

(7) On the termination of a company voluntary arrangement the administrator may apply to the court to lift the suspension of the special administration order.

(8) For the purposes of this regulation, references in Part 1 of the IA 1986 and Part 2 of the I(NI)O 1989 to administration include special administration.

Special administration order as an alternative order

45

(1) On the following the court may instead make a special administration order—

(a) a petition for a winding-up order,

(b) an application for a Schedule B1 administration order, or

(2) But a special administration order may be made under paragraph (1) only on the application of the FCA.

Disqualification of directors

46

(1) Where a special administration order is made under these Regulations in relation to an institution that is incorporated in, or formed under the law of, England and Wales or Scotland, the CDDA 1986 applies with the following modifications.

(1A) For the purposes of paragraph (1), an institution whose registered office, or in the case of an institution with no registered office, whose principal place of business, is situated in England and Wales or Scotland is to be treated as incorporated in, or formed under, the law of England and Wales or Scotland, as the case may be.

(2) The CDDA 1986 is to be read as if—

(a) references to a provision of the IA 1986 which is applied and modified by these Regulations were to the provision as applied and modified by these Regulations,

(b) references to liquidation include special administration;

(d) references to becoming insolvent include becoming subject to a special administration order, and

(e) references to a liquidator include an administrator.

(3) Section 6 is to be read as if subsection (2) were omitted.

(4) Section 7A is to be read as if—

(a) the reference to the office-holder were to the administrator,

(b) the reference to insolvency date were to the date on which the special administration order is made, and

(5) This regulation is subject to paragraph 7 of Schedule 2.

Further provision on special administration: schedules

47

(1) Schedule 1 makes further provision about how special administration applies to limited liability partnerships formed under the law of England and Wales or the law of Scotland.

(1A) Schedule 1A makes further provision about how special administration applies to limited liability partnerships formed under the law of Northern Ireland.

(2) Schedule 2 makes further provision about how special administration applies to partnerships formed under the law of England and Wales.

(2A) Schedule 2A makes further provision about how special administration applies to partnerships formed under the law of Northern Ireland.

(3) Schedule 3 makes further provision about how certain other legislation applies to companies in special administration.

(4) Schedule 4 contains consequential amendments.

FSMA 2000, Pt 24: application to payment and electronic money institution insolvency except special administration

48

(1) In the PSR 2017, in Schedule 6, for paragraph 9 substitute—

(9) The sections of the 2000 Act mentioned in the first column of the Table apply with any modifications shown in the third column.

Section	Subject	Modifications
Generally (for the sections mentioned below)		To be read as if—(a) references to an authorised person or recognised investment exchange were to an authorised payment institution or a small payment institution;(b) references to the appropriate regulator, or to the regulator or a regulator, were to the FCA;(c) references to creditors included users.
Section 356	Powers of FCA to participate in proceedings: company voluntary arrangements	To be read as if subsections (4) and (5) were omitted.
Section 357	Powers of FCA to participate in proceedings: individual voluntary arrangements	To be read as if subsections (7) and (8) were omitted.
Section 358	Powers of FCA to participate in proceedings: trust deeds for creditors in Scotland	To be read as if subsection (6A) were omitted.
Section 359	Administration order	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsection (1A) were omitted;(d) in subsection (3)(a), the reference to an agreement were to a contract for payment services;(e) subsection (3)(b) and (c) were omitted;(f) in subsection (4), the definitions of “agreement, “authorised deposit taker”, “authorised reclaim fund” and “relevant deposit” were omitted;(g) subsection (5) were omitted.
Section 361	Administrators’ duty to report to FCA	To be read as if—(a) in subsection (2)(a) the reference to the general prohibition were to regulation 138(1) of the Payment Services Regulations 2017;(b) subsection (2)(b) were omitted;(c) subsection (2A) were omitted;(d) in subsection (3)(b) the reference to the general prohibition were to regulation 138(1) of the Payment Services Regulations 2017.
Section 362	Powers of FCA to participate in proceedings	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsections (7) and (8) were omitted.
Section 362A	Administrator appointed by company or directors	To be read as if subsection (2B) were omitted.
Section 363	Receivership: powers of FCA to participate in proceedings	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsection (6) were omitted.
Section 364	Receiver’s duty to report to FCA	To be read as if—(a) in subsection (b), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017,”;(b) in the words after subsection (b), the words from “and,” to the end were omitted.
Section 365	Voluntary winding up: powers of FCA to participate in proceedings	To be read as if subsection (8) were omitted.
Section 367	Winding-up petitions	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsection (1A) were omitted;(d) in subsection (4) for “an agreement” there were substituted “a contract for payment services”;(e) subsection (5) were omitted.
Section 370	Liquidator’s duty to report to FCA	To be read as if —(a) in subsection (1)(b)(ii), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017,”;(b) in the words after subsection (1)(b), the words from “and,” to the end were omitted;(c) in subsection (2)(b), the reference to the general prohibition were to regulation 138(1) of the Payment Services Regulations 2017.
Section 371	Winding up: powers of FCA to participate in proceedings	To be read as if —(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsections (6) and (7) were omitted.
Section 372	Bankruptcy: Petitions	To be read as if —(a) subsection (1A) were omitted;(b) in subsections (3) and (4), the reference to an agreement, in both places it occurs, were to a contract for payment services;(c) in subsections (2) and (6) the reference to subsection (1A), in each place it occurs, were omitted;(d) in subsection (7)(b), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(e) subsection (8) were omitted.
Section 373	Bankruptcy: insolvency practitioner’s duty to report to FCA	To be read as if —(a) in subsection (1)(b), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017,”;(b) in the words after subsection (1)(b)(ii), the words from “and,” to the end were omitted;(c) in subsection (1A)(b), the reference to the general prohibition were to regulation 138(1) of the Payment Services Regulations 2017.
Section 374	Bankruptcy: powers of FCA to participate in proceedings	To be read as if —(a) in subsection (5)(b), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(b) in subsection (6)(b), for the words from “carrying” to the end there were substituted “providing or has provided payment services in contravention of regulation 138(1) of the Payment Services Regulations 2017.”;(c) subsections (7) and (8) were omitted.
Section 375	Provisions against debt avoidance: right of FCA to apply for an order	To be read as if—(a) in subsection (1)(a), for the words from “carrying” to the end there were substituted “providing payment services (whether or not in contravention of regulation 138 (1) of the Payment Services Regulations 2017);”;(b) in subsection (1)(b) the reference to a regulated activity carried on were to payment services being provided;(c) subsection (1A) were omitted;(d) in subsection (2) “or subsection (1A)(b) (as the case may be)” were omitted.

(2) In the Electronic Money Regulations 2011, in Schedule 3, for paragraph 7 substitute—

(7) The sections of the 2000 Act mentioned in the first column of the Table apply with any modifications shown in the third column.

Section	Subject	Modifications
Generally (for the sections mentioned below)		To be read as if—(a) references to an authorised person or recognised investment exchange were to an electronic money institution;(b) references to the appropriate regulator, or to the regulator or a regulator, were to the FCA;(c) references to creditors included users or holders.
Section 356	Powers of FCA to participate in proceedings: company voluntary arrangements	To be read as if subsections (4) and (5) were omitted.
Section 357	Powers of FCA to participate in proceedings: individual voluntary arrangements	To be read as if subsections (7) and (8) were omitted.
Section 358	Powers of FCA to participate in proceedings: trust deeds for creditors in Scotland	To be read as if subsection (6A) were omitted.
Section 359	Administration order	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsection (1A) were omitted;(d) in subsection (3)(a), the reference to an agreement were to a contract for electronic money issuance or payment services;(e) subsection (3)(b) and (c) were omitted;(f) in subsection (4) the definitions of “agreement, “authorised deposit taker”, “authorised reclaim fund” and “relevant deposit” were omitted;(g) subsection (5) were omitted.
Section 361	Administrators duty to report to FCA	To be read as if—(a) in subsection (2)(a) the reference to the general prohibition were to regulation 63(1) of the Electronic Money Regulations 2011;(b) subsection (2)(b) were omitted;(c) subsection (2A) were omitted;(d) in subsection (3)(b) the reference to the general prohibition were to regulation 63(1) of the Electronic Money Regulations 2011.
Section 362	Powers of FCA to participate in proceedings	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsections (7) and (8) were omitted.
Section 362A	Administrator appointed by company or directors	To be read as if subsection (2B) were omitted.
Section 363	Receivership: powers of FCA to participate in proceedings	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsection (6) were omitted.
Section 364	Receiver’s duty to report to FCA	To be read as if—(a) in subsection (b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011,”;(b) in the words after subsection (b), the words from “and,” to the end were omitted.
Section 365	Voluntary winding up: powers of FCA to participate in proceedings	To be read as if subsection (8) were omitted.
Section 367	Winding-up petitions	To be read as if—(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsection (1A) were omitted;(d) in subsection (4) for “an agreement” there were substituted “a contract for electronic money issuance or payment services”;(e) subsection (5) were omitted.
Section 370	Liquidator’s duty to report to FCA	To be read as if —(a) in subsection (1)(b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011,”;(b) in the words after subsection (1)(b), the words from “and,” to the end were omitted;(c) in subsection (2)(b), the reference to the general prohibition were to regulation 63(1) of the Electronic Money Regulations 2011.
Section 371	Winding up: powers of FCA to participate in proceedings	To be read as if —(a) subsection (1)(b) were omitted;(b) subsection (1)(c) were substituted with—“(c) is issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsections (6) and (7) were omitted.
Section 372	Bankruptcy: Petitions	To be read as if —(a) subsection (1A) were omitted;(b) in subsections (3) and (4), the reference to agreement, in both places it occurs, were to a contract for electronic money issuance or payment services;(c) in subsections (2) and (6) the reference to subsection (1A), in each place it occurs, were omitted;(d) in subsection (7)(b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(e) subsection (8) were omitted.
Section 373	Bankruptcy: insolvency practitioner’s duty to report to FCA	To be read as if —(a) in subsection (1)(b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011,”;(b) in the words after subsection (1)(b), the words from “and,” to the end were omitted;(c) in subsection (1A)(b), the reference to the general prohibition were to regulation 63(1) of the Electronic Money Regulations 2011.
Section 374	Bankruptcy: powers of FCA to participate in proceedings	To be read as if —(a) in subsection (5)(b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(b) in subsection (6)(b), for the words from “carrying” to the end there were substituted “issuing or has issued electronic money in contravention of regulation 63(1) of the Electronic Money Regulations 2011.”;(c) subsections (7) and (8) were omitted.
Section 375	Provisions against debt avoidance: right of FCA to apply for an order	To be read as if—(a) in subsection (1)(a), for the words from “carrying” to the end there were substituted “issuing electronic money (whether or not in contravention of regulation 63(1) of the Electronic Money Regulations 2011);”;(b) in subsection (1)(b), the reference to a regulated activity carried on were to electronic money issuance services being provided;(c) subsection (1A) were omitted;(d) in subsection (2), “or subsection (1A)(b) (as the case may be)” were omitted.

Correction of defect in instrument relating to the UK’s withdrawal from the EU and bank recovery and resolution

49

(1) In the Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018[^f00027], in Schedule 1, in paragraph 42, omit sub-paragraph (4).

(2) In consequence of the amendment made by paragraph (1), in the Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020[^f00028], in regulation 76, omit paragraph (4).

SCHEDULE 1 — How special administration applies to English/Welsh /Scottish LLPs

1

This Schedule makes provision about how special administration applies to institutions which are formed as limited liability partnerships under the law of England and Wales or Scotland.

2

In this Schedule—

(a) the “LLPR 2001” means the Limited Liability Partnerships Regulations 2001;

(b) the “LLP(S)R 2001” means the Limited Liability Partnerships (Scotland) Regulations 2001.

3

The provisions of the IA 1986 mentioned in the first column of the Table apply to institutions which are formed as limited liability partnerships with the further modifications (in addition to any set out in the table in regulation 37) set out in the third column.

Provision	Subject	Modifications
Those mentioned in regulation 5(2) of the LLPR 2001 in relation to limited liability partnerships established under the law of England and Wales		Those set out in regulation 5(2) of the LLPR 2001 in relation to limited liability partnerships established under the law of England and Wales (except regulation 5(2)(f) of those Regulations).
Those mentioned in regulation 4(2) of the LLP(S)R 2001, in relation to limited liability partnerships established under the law of Scotland		Those set out in regulation 4(2) of the LLP (Scotland) Regulations (except regulation 4(2)(e) of those Regulations).
Section 74	Liability as contributories of present and past members	To be read as if it were substituted with—
		741When a limited liability partnership goes into special administration, every present and past member of the limited liability partnership is liable to contribute to its assets as follows.2Where a member has agreed with the other members or with the limited liability partnership, that that member be liable to contribute to the assets of the limited liability partnership in the event that that body goes into liquidation or special administration, that member is liable, to the extent that they have so agreed, to contribute—ato its assets to any amount sufficient for payment of its debts and liabilities;bto the expenses of the special administration;cfor the adjustment of the rights of the contributories among themselves.3A past member shall only be liable under this section if the obligation arising from such agreement in subsection (2) survived them ceasing to be a member of the limited liability partnership.
Sections 76–78	Contributories	Omitted.
Section 79	Meaning of “contributory”	To be read as if—(a) in subsection (1) for “every person” there were substituted—“every past and present member of the limited liability partnership”;(b)at the end of subsection (2), there were inserted—“or section 214A (adjustment of withdrawals)”.(c)subsection (3) were omitted.
Section 83	Companies registered under the Companies Act Part XXII, Chapter II	Omitted.
Section 183	Effect of execution or attachment
Section 187	Power to make over assets to employees	Omitted.
Section 194	Resolutions passed at meetings	To be read as if after “contributories” there were inserted “or of the members of a limited liability partnership”.
Section 214	Wrongful trading	To be read as if after subsection (2), “but the court shall not” to the end of the subsection were omitted.
After section 214	Adjustment of withdrawals	The IA 1986 is to be read as if after section 214 there were inserted—
		214A1This section has effect in relation to a person (“P”) who is or has been a member of a limited liability partnership where, in the course of the special administration of that limited liability partnership, it appears that subsection (2) of this section applies in relation to P.2This subsection applies in relation to P if—awithin the period of two years ending with the commencement of the special administration, P was a member of the limited liability partnership who withdrew property of the limited liability partnership, whether in the form of a share of profits, salary, repayment of or payment of interest on a loan to the limited liability partnership or any other withdrawal of property, andbit is proved by the administrator to the satisfaction of the court that at the time of the withdrawal P knew or had reasonable ground for believing that the limited liability partnership—iwas at the time of the withdrawal unable to pay its debts, oriiwould become so unable to pay its debts after the assets of the limited liability partnership had been depleted by that withdrawal taken together with all other withdrawals (if any) made by any members contemporaneously with that withdrawal or in contemplation when that withdrawal was made.3Where this section has effect in relation to P, the court, on the application of the administrator, may declare that P is to be liable to make such contribution (if any) to the limited liability partnership’s assets as the court thinks proper.4The court may not make a declaration in relation to P the amount of which exceeds the aggregate of the amounts or values of all the withdrawals referred to in subsection (2) made by P within the period of two years referred to in that subsection.5The court may not make a declaration under this section with respect to P unless P knew or ought to have concluded that after each withdrawal referred to in subsection (2) there was no reasonable prospect that the limited liability partnership would avoid going into an insolvency procedure under the IA 1986 or special administration.6For the purposes of subsection (5) the facts which P ought to know or ascertain and the conclusions which P ought to reach are those which would be known, ascertained, or reached by a reasonably diligent person having both—athe general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by P in relation to the limited liability partnership, andbthe general knowledge, skill and experience that P has.7In this section “member” includes a shadow member.8In this section a reference to being unable to pay debts is to be read in accordance with section 93(4) of the BA 2009 (as applied and modified by the EMR 2011 and the PSR 2017).9This section does not limit the effect of section 214.
Section 215	Proceedings under section 213 or 214	To be read as if—(a) in subsection (1) for “section 213 or 214” there were substituted “section 213, 214 or 214A”;(b)in subsection (2) for “either section” there were substituted “any of those sections”;(c) in subsection (4) for “either section” there were substituted “any of those sections”;(d) in subsection (5) for “sections 213 and 214” there were substituted “sections 213, 214 or 214A”.
Section 218	Prosecution of delinquent officers and members of company	To be read as if—(a)in subsection (1), for “officer, or any member, of the company” there were substituted “member of the limited liability partnership”;(b)in subsection (3) for “officer of the company, or any member of it,” there were substituted “member of the limited liability partnership”.
Section 386 of and Schedule 6 (and Schedule 4 to the Pension Schemes Act 1993)	Preferential debts	To be read as if—(a)in subsection (1) “or an individual” were omitted;(b)in subsection (2) “or the individual” were omitted.
Section 387	“The relevant date”	To be read as if subsections (5) and (6) were omitted.
Section 432	Offences by bodies corporate	To be read as if in subsection (2) “, secretary” were omitted.
Schedule B1, paragraph 42	Moratorium on insolvency proceedings	To be read as if for sub-paragraph (2) there were substituted—“(2) No determination to wind up the limited liability partnership voluntarily may be made.”
Schedule B1, paragraph 61	Directors	To be read as if for paragraph 61 there were substituted—“61. The administrator may prevent any person from taking part in the management of the business of the limited liability partnership and may appoint any person to be a manager of that business.”.
Schedule B1, paragraph 62	Power to call meetings	To be read as if—(a) the existing provision were renumbered as sub-paragraph (1);(b) after that sub-paragraph there were inserted—2The meeting shall be held in a manner provided by the Payment and Electronic Money Institution Insolvency Regulations 2021, special administration insolvency rules or the limited liability partnership agreement.3The quorum required for a meeting of the members of the limited liability partnership shall be any quorum required by the limited liability partnership agreement for meetings of the members of the limited liability partnership and if no requirement for a quorum has been agreed upon, the quorum shall be 2 members.
Schedule B1, paragraph 91	Replacement	To be read as if sub-paragraph (1)(c) were omitted.
Schedule B1, paragraph 105	Majority decision of directors	Omitted.

4

The CDDA 1986 as applied and modified by these Regulations applies to institutions which are formed as limited liability partnerships with the further modifications set out in regulation 4(2) of and Part 2 of Schedule 2 to the LLPR 2001.

5

The following legislation applies to institutions which are formed as limited liability partnerships with such modifications as the context requires—

(a) to give effect to the IA 1986 as applied and modified by these Regulations—

(i) the Insolvency Practitioners Regulations 2005[^f00030];

(ii) the Insolvency Practitioners (Recognised Professional Bodies) Order 1986[^f00031];

(iii) the Insolvency Proceedings Fees Order 2004[^f00032];

(iv) the Insolvency Practitioners Tribunal (Conduct of Investigations) Rules 1986[^f00033], and

(b) to give effect to the CDDA 1986 as applied and modified by these Regulations and the CA 2006—

(i) the Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987[^f00034];

(ii) the Uncertificated Securities Regulations 2001;

(iii) the Insolvent Companies (Reports on Conduct of Directors) Rules 1996[^f00035];

(iv) the Insolvent Companies (Reports on Conduct of Directors) (Scotland) Rules 1996[^f00036].

SCHEDULE 2 — How special administration applies to English/Welsh partnerships

1

This Schedule makes provision about how special administration applies to institutions which are formed as partnerships under the law of England and Wales.

2

In this Schedule, the “IPO 1994” means the Insolvent Partnerships Order 1994[^f00037].

3

Where an institution is formed as a partnership, then—

(a) in these Regulations, and

(b) in the CDDA 1986 as applied and modified by these Regulations,

references to the things in the first column of Table 1 are to be read in accordance with the corresponding modification in the second column.

Reference	Modification
References to companies	To be read as if they were to partnerships.
References to the registrar of companies	Omitted.
References to shares of a company	To be read as it they were—(a) in relation to a partnership with capital, to rights to share in that capital, and(b) in relation to a partnership without capital, to interests—(i) conferring any right to share in the profits or liability to contribute to the losses of the partnership, or(ii) giving rise to an obligation to contribute to the debts or expenses of the partnership in the event of special administration.
Other references appropriate to companies	To be read as if they were to the corresponding persons, officers, documents or organs (as the case may be) appropriate to a partnership.

4

Table 2 sets out—

(a) in the first column, versions of provisions of the IA 1986 set out in the IPO 1994 (“IPO 1994 versions”),

(b) in the second column, the subject of each of those versions, and

5

Each IPO 1994 version in the first column of Table 2 applies to an institution which is formed as a partnership with any corresponding modification in the third column.

6

Where there is an entry for an IPO 1994 version in Table 2, that version of the provision of the IA 1986 applies, as modified by Table 2, to an institution which is formed as a partnership, and the entry relating to that provision of the IA 1986 in the table in regulation 37 is to be disregarded.

Provision (IPO 1994 version)	Subject	Modifications
Sections and other provisions except Schedule B1
Generally (for those sections or other provisions mentioned below except Schedule B1)		To be read as if references to—(a) references to the IA 1986 were to these Regulations,(b) references to a provision of the IA 1986 which is applied and modified by these Regulations were to the provision as applied and modified by these Regulations,(c) being wound up were to being in special administration;(d) office-holder were to the administrator;(e) an insolvency order were to a special administration order.
Schedule 1 (version in Schedule 2, paragraph 43)	Powers of administrator	To be read as if paragraph 19 were omitted.
Section 234 (version in Schedule 3, paragraph 9)	Getting in the partnership’s property	To be read as if the reference in subsection (1) to article 7 of the IPO 1994 were to regulation 10.
Schedule 4 (version in Schedule 3, paragraph 10)	Powers of liquidator in a winding up	To be read as if—(a) paragraphs 4 to 10, and paragraph 12, were omitted;(b) in paragraph 13, the reference to winding up the partnership’s affairs and distributing its property were to pursuing the special administration objectives.
Section 211 (version in Schedule 4, paragraph 25)	False representations to creditors	To be read as if for subsection (1) there were substituted—“(1) This section applies where a special administration order is made in respect of an insolvent partnership.”
Schedule B1
Generally (for those paragraphs mentioned below)		To be read as if—(a) references to a provision of the IA 1986 which is applied and modified by these Regulations were to the provision as applied and modified by these Regulations;(b) references to action included inaction;(c) references to the administrator were to the administrator appointed under regulation 7;(d) references to the court were to the court as defined in regulation 6;(e) references to the creditors’ meeting were to have the meaning given by paragraph 50 of Schedule B1 as applied and modified by these Regulations;(f) references to entering administration were to entering special administration;(g) references to a hire purchase agreement included a conditional sale agreement, a chattel leasing agreement and a retention of title agreement;(h) references to an insolvency order were to a special administration order;(i) references to an insolvency petition were to an application for a special administration order;(j) references to insolvency proceedings were to special administration;(k) references to market value were to the amount which would be realised on a sale of property in the open market by a willing vendor;(l) references to the purpose of administration were to the pursuit of the special administration objectives;(m) references to partnership were to an institution;(n) references to the partnership being in administration were to the institution being in special administration;(o) references to a responsible insolvency practitioner were to the administrator;(p) references to a thing in writing included a thing in electronic form;(q) references to being unable to pay debts were to be read in accordance with section 93(4) of the BA 2009 (as applied and modified by the EMR 2011 and the PSR 2017).
Paragraph 42 (version in Schedule 2, paragraph 17)	Moratorium on insolvency proceedings	To be read as if sub-paragraph (5)(a) were omitted.
Paragraph 43 (version in Schedule 2, paragraph 18)	Moratorium on other legal processes	To be read as if sub-paragraph (6) were omitted.
Paragraph 47 (version in Schedule 2, paragraph 19)	Statement of company’s affairs	To be read as if in sub-paragraph (2), the statement were also required to include particulars of the relevant funds held by the institution.
Paragraph 49 (version in Schedule 2, paragraph 20)	Administrator’s proposals	To be read as if —(a) sub-paragraph (2)(b) were omitted;(b) there were no amendment made by paragraph 6(2) of Schedule 2 to the Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017[^f00038];(c) in sub-paragraph (4), the administrator were also required to send a copy of the statement of proposals to every user or holder of whose claim the administrator is aware and who the administrator has a means of contacting, and to the FCA;(d) the administrator were also required to give notice that the statement of proposals is to be provided free of charge to a payment system operator who applies in writing to a specified address.The application of paragraph 49(1) to (3) is subject to regulation 38(6).
Paragraph 61 (version in Schedule 2, paragraph 22)	Directors
Paragraph 65 (version in Schedule 2, paragraph 23)	Distribution to creditors	To be read as if sub-paragraph (3) were omitted.
Paragraph 69 (version in Schedule 2, paragraph 24)	Agency
Paragraph 73 (version in Schedule 2, paragraph 25)	Protection for secured or preferential creditors
Paragraph 74 (version in Schedule 2, paragraph 26)	Challenge to administrator’s conduct	To be read as if —(a) there were no amendment made by paragraph 6(4) of Schedule 2 to the Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017;(b) the FCA were also empowered to make an application to the court, on the grounds that—(i) the administrator is acting or has acted so as unfairly to harm the interests of some or all of the members, creditors or users or holders;(ii) the administrator is proposing to act in a way which would unfairly harm the interests of some or all of the members, creditors or users or holders;(iii) the administrator has failed to carry out a reconciliation in accordance with regulation 13;(c)a user or holder were also empowered to make an application to the court under sub-paragraph (1) or (2);(d)any of the following persons were also empowered to make an application on the grounds that the administrator is not taking any action in response to a request from that person under regulation 35(3) and that the person is of the opinion that the action requested would not lead to a material reduction in the value of the property of the institution—(i)the Bank of England;(ii) the Treasury;(iii) the FCA;(iv)the Payment Systems Regulator;(e)the following persons were also empowered to make an application on the grounds that the administrator has made, or proposes to make, a PPTA in contravention of regulation 32 or 34—(i)the Bank of England;(ii) the FCA;(f)any person, other than the institution, who is party to an arrangement of a kind referred to in regulation 31(1) were also empowered to make an application on the grounds that the administrator has made, or proposes to make, a relevant transfer in contravention of that regulation;(g)where an application is made on the grounds that the administrator has made a relevant transfer in contravention of regulation 34—(i)sub-paragraphs (3)(a), (d) and (e) and (4) were omitted;(ii)the court were also empowered to make an order declaring that the transfer was made in contravention of the regulation concerned;(h)where an application is made on the grounds that the administrator has made a relevant transfer in contravention of regulation 32 or 33, the court were also empowered to make such order as it thinks fit for restoring the position to what it would have been if the transfer had not been made in contravention of the regulation concerned;(i)where the FCA has given a direction under regulation 38 which has not been withdrawn, the court did not have power to make an order if it would impede or prevent compliance with the direction.
Paragraph 84 (version in Schedule 2, paragraph 28)	Termination: no more relevant funds for distribution	To be read as if—(a)the administrator were only empowered to file a notice under sub-paragraph (1) if the institution no longer holds relevant funds;(b)in sub-paragraph (4), a copy of the notice were to be sent to every client of the institution of whom the administrator is aware and the FCA.
Paragraph 87 (version in Schedule 2, paragraph 29)	Resignation	To be read as if—(a)where the administrator was appointed by the court on the application of the FCA or the Secretary of State, the notice given in accordance with sub-paragraph (2)(a) must also be given to the applicant;(b) sub-paragraphs (2)(b) and (c) were omitted.
	Resignation	To be read as if—(a)where the administrator was appointed by the court on the application of the FCA or the Secretary of State, the notice given in accordance with sub-paragraph (2)(a) must also be given to the applicant;(b) sub-paragraphs (2)(b) and (c) were omitted.
Paragraph 89 (version in Schedule 2, paragraph 30)	Disqualification	To be read as if—(a) where the administrator was appointed by the court on the application of the FCA or the Secretary of State, the notice given in accordance with sub-paragraph (2)(a) were also to be given to the applicant;(b)sub-paragraphs (2)(b) and (c) were omitted.
Paragraph 90 (version in Schedule 2, paragraph 31)	Replacement	To be read as if the reference to paragraphs 91 to 93 and 95 were to paragraph 91.
Paragraph 91 (version in Schedule 2, paragraph 32)	Replacement	To be read as if the FCA were added to the list of persons who may make an application to appoint an administrator but to whom the restrictions in sub-paragraph (2) apply.
Paragraph 103 (version in Schedule 2, paragraph 38)	Joint administrators	To be read as if—(a)in sub-paragraph (2)(a), the reference to paragraph 12(1)(a) to (c) were to regulation 8(1);(b) sub-paragraphs (3) and (4) were omitted.
Paragraph 105 (version in Schedule 2, paragraph 39)	Majority decision of directors
Paragraph 106 (version in Schedule 2, paragraph 40)	Fines	To be read as if—(a) sub-paragraph (2)(a), (b), (j) and (k) was omitted.
Paragraphs 112 to 116 (version in Schedule 2, paragraph 42)	Scotland

7

Article 16 of the IPO 1994 applies to an institution which is formed as a partnership—

(a) reading article 16 as if the reference to being wound up under the IA 1986 were to entering special administration;

(b) reading the reference to the provisions of the CDDA 1986 as if it were to—

(i) sections 1, 1A, 8A to 10, 15C, 19(c) and 20 of that Act as applied and modified by regulation 46, and

(ii) the versions of sections 5A, 6 to 8ZE, 12C, 13 to 15B and 17 of and Schedule 1 to that Act set out in Schedule 8 to the IPO 1994, reading those versions as if they were modified by regulation 46,

subject to the further general modifications of the provisions mentioned in paragraphs (i) and (ii) in paragraph 8.

8

The general modifications are—

(i) references to a provision of the IA 1986 which is applied and modified by these Regulations are to be read as is they were to the provision as applied and modified by these Regulations;

(ii) references to being wound up are to be read as if they were to the partnership being in special administration;

(iii) references to office-holder are to be read as if they were to the administrator;

(iv) references to an insolvency order are to be read as if they were to a special administration order.

9

Article 18 of and Schedule 10 to the IPO 1994 apply to institutions which are formed as partnerships—

(a) reading article 18 as if—

(i) in paragraph (1) from “giving effect” to “this Order” were substituted with “giving effect to the provisions of the IA 1986 and the CDDA 1986 as applied and modified by these Regulations”;

(ii) in paragraph (2) the reference to the IPO 1994 were to these Regulations;

(b) reading Schedule 10 as if the list of legislation included any special administration insolvency rules and the following legislation were omitted—

The Insolvency Proceedings (Monetary Limits) Order 1986

The Administration of Insolvent Estates of Deceased Persons Order 1986

The Insolvency (Amendment of Subordinate Legislation) Order 1986

The Companies (Disqualification Orders) Regulations 2001

The Co-operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986

The Insolvency Practitioners and Insolvency Services Accounts (Fees) Order 2003

The Insolvency Proceedings (Fees) Order 2004.

SCHEDULE 3 — Further provision about how other legislation applies to companies in special administration

Introduction

1

This Schedule makes further provision about how certain other legislation applies to companies entering or being in special administration.

General modifications

2

The following legislation applies with the modifications in paragraph 3.

Primary Legislation

Taxes Management Act 1970[^f00039]

Land Registration Act (Northern Ireland) 1970

Prescription and Limitation (Scotland) Act 1973[^f00040]

Judgments Enforcement (Northern Ireland) Order 1981

Companies Act 1985[^f00041]

Finance Act 1986[^f00042]

Debtors (Scotland) Act 1987[^f00043]

Companies Act 1989[^f00044]

Companies (No. 2) (Northern Ireland) Order 1990

Taxation of Chargeable Gains Act 1992[^f00045]

Pension Schemes Act 1993[^f00046]

Pension Schemes (Northern Ireland) Act 1993

Pensions Act 1995[^f00047]

Pensions (Northern Ireland) Order 1995

Proceeds of Crime (Scotland) Act 1995[^f00048]

Employment Rights Act 1996[^f00049]

Employment Rights (Northern Ireland) Order 1996

Terrorism Act 2000[^f00050]

Finance Act 2000[^f00051]

International Criminal Court Act 2001[^f00052]

International Criminal Court (Scotland) Act 2001[^f00053]

Proceeds of Crime Act 2002[^f00054]

Debt Arrangement and Attachment (Scotland) Act 2002[^f00055]

Finance Act 2003[^f00056]

Pensions Act 2004[^f00057]

Pensions (Northern Ireland) Order 2005

Companies Act 2006 (except section 1078 does not apply)[^f00058]

Bankruptcy and Diligence (Scotland) Act 2007[^f00059]

Finance Act 2008[^f00060]

Dormant Bank and Building Society Accounts Act 2008[^f00061]

Corporation Tax Act 2009[^f00062]

Corporation Tax Act 2010[^f00063]

Taxation (International and other Provisions) Act 2010[^f00064]

Secondary Legislation

Statutory Maternity Pay (General) Regulations 1986[^f00065]

Statutory Maternity Pay (General) (Northern Ireland) Regulations 1987

Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987[^f00066]

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