The Payment and Electronic Money Institution Insolvency Regulations 2021

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 201737;(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 1970³⁸

• Land Registration Act (Northern Ireland) 1970

• Prescription and Limitation (Scotland) Act 1973³⁹

• Judgments Enforcement (Northern Ireland) Order 1981

• Companies Act 1985⁴⁰

• Finance Act 1986⁴¹

• Debtors (Scotland) Act 1987⁴²

• Companies Act 1989⁴³

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

• Taxation of Chargeable Gains Act 1992⁴⁴

• Pension Schemes Act 1993⁴⁵

• Pension Schemes (Northern Ireland) Act 1993

• Pensions Act 1995⁴⁶

• Pensions (Northern Ireland) Order 1995

• Proceeds of Crime (Scotland) Act 1995⁴⁷

• Employment Rights Act 1996⁴⁸

• Employment Rights (Northern Ireland) Order 1996

• Terrorism Act 2000⁴⁹

• Finance Act 2000⁵⁰

• International Criminal Court Act 2001⁵¹

• International Criminal Court (Scotland) Act 2001⁵²

• Proceeds of Crime Act 2002⁵³

• Debt Arrangement and Attachment (Scotland) Act 2002⁵⁴

• Finance Act 2003⁵⁵

• Pensions Act 2004⁵⁶

• Pensions (Northern Ireland) Order 2005

• Companies Act 2006 (except section 1078 does not apply)⁵⁷

• Bankruptcy and Diligence (Scotland) Act 2007⁵⁸

• Finance Act 2008⁵⁹

• Dormant Bank and Building Society Accounts Act 2008⁶⁰

• Corporation Tax Act 2009⁶¹

• Corporation Tax Act 2010⁶²

• Taxation (International and other Provisions) Act 2010⁶³

• Secondary Legislation

• Statutory Maternity Pay (General) Regulations 1986⁶⁴

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

• Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987⁶⁵

• Financial Markets and Insolvency Regulations 1991⁶⁶

• Financial Markets and Insolvency Regulations (Northern Ireland) 1991

• Land Registration Rules (Northern Ireland) 1994

• Insolvency Regulations 1994⁶⁷

• ...

• Insolvency Regulations (Northern Ireland) 1996

• Insolvent Companies (Reports on Conduct of Directors) Rules 1996⁶⁸

• Financial Markets and Insolvency Regulations 1996⁶⁹

• Financial Markets and Insolvency Regulations (Northern Ireland) 1996

• Individual Savings Account Regulations 1998⁷⁰

• Corporation Tax (Simplified Arrangements for Group Relief) Regulations 1999⁷¹

• Financial Markets and Insolvency (Settlement Finality) Regulations 1999⁷²

• Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002⁷³

• Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations (Northern Ireland) 2002

• Financial Collateral Arrangements (No 2) Regulations 2003⁷⁴

• Insolvent Companies (Reports on Conduct of Directors) Rules (Northern Ireland) 2003

• Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules (Northern Ireland) 2003

• Insolvency Practitioners Regulations 2005⁷⁵

• Pension Protection Fund (Entry Rules) Regulations 2005⁷⁶

• Pension Protection Fund (Entry Rules) Regulations (Northern Ireland) 2005

• Gender Recognition (Disclosure of Information) (England, Wales and Northern Ireland) (No 2) Order 2005⁷⁷

• Gender Recognition (Disclosure of Information) (Scotland) Order 2005⁷⁸

• Financial Assistance Scheme Regulations 2005⁷⁹

• Insolvency Practitioners Regulations (Northern Ireland) 2006

• Land Registration (Scotland) Rules 2006⁸⁰

• Companies (Cross-Border Mergers) Regulations 2007⁸¹

• Regulated Covered Bonds Regulations 2008⁸²

• Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015⁸³

• Land Registration (Network Access) Rules 2008⁸⁴

• Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008⁸⁵

• ...

• Companies (Disclosure of Address) Regulations 2009⁸⁶

• Additional Statutory Paternity Pay (General) Regulations 2010⁸⁷

• Additional Statutory Paternity Pay (General) Regulations (Northern Ireland) 2010

• Registrar of Companies (Fees) Companies, Overseas Companies and Limited Liability Partnerships) Regulations 2012

• Statutory Parental Bereavement Pay (General) Regulations 2020⁸⁸

• Statutory Parental Bereavement Pay (General) Regulations (Northern Ireland) 2023

• Statutory Neonatal Care Pay (General) Regulations 2025

3

References to—

• (a) a Schedule B1 administrator are to be read as if they were to an administrator appointed under regulation 7;

• (b) Schedule B1 administration or insolvent administration are to be read as if they were to special administration;

• (c) a Schedule B1 administration order are to be read as if they were to a special administration order;

• (d) insolvency legislation, the general law of insolvency, the enactments relating to insolvency and similar expressions are to be read as if they were to special administration and the provisions of the IA 1986 or the I(NI)O 1989 as applied and modified by these Regulations;

• (e) becoming insolvent and an insolvency event occurring are to be read as if they were to being put into special administration;

• (f) insolvency proceedings or an insolvency procedure are to be read as if they were to special administration;

• (g) winding up, being wound up, wound up by the court, going into liquidation and compulsory liquidation are to be read as if they were to being put into special administration;

• (h) a winding-up order are to be read as including a special administration order (and, in this context, references to a liquidator are to be read as if they were to an administrator);

• (i) a person acting as an insolvency practitioner within the meaning of section 388 of the IA 1986 or Article 3 of the I(NI)O 1989 are to be read as if they were to a person acting as an administrator under these Regulations;

• (j) the provisions of the IA 1986 and the I(NI)O 1989 are to be read as if they were to those provisions as applied and modified by these Regulations; and

• (k) the provisions of—

• (ai) the Insolvency Rules (Northern Ireland) 1991;

• (i) the Insolvency (England and Wales) Rules 2016⁸⁹,

• (ii) the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018⁹⁰, and

• (iii) the Insolvency (Scotland) (Receivership and Winding up) Rules 2018⁹¹,

are to be read as if they were to the provisions of special administration insolvency rules;

• (l) insolvency or liquidation within the meaning of section 247 of the IA 1986 or Article 6 of the I(NI)O 1989 are to be read as if they were to special administration;

• (m) the purposes of the IA 1986 or the I(NI)O 1989 are to be read as if they were to the purposes of these Regulations.

Pensions Act 2004

4

• (1) In the Pensions Act 2004⁹², in section 121(3)(d), the reference to entering administration within the meaning of paragraph 1(2)(b) of Schedule B1 to the IA 1986 is to be read as if it were to entering special administration.

• (2) In the Pensions (Northern Ireland) Order 2005, in Article 105(3)(d), the reference to entering administration within the meaning of paragraph 2(2)(b) of Schedule B1 to the I(NI)O 1989 is to be read as if it were to entering special administration.

CA 2006

5

In the CA 2006—

• (a) in section 461—

• (i) subsection (4)(c) is to be read as if it included these Regulations in the list of enactments in that subsection;

• (ii) subsection (4)(g) is to be read as if it included these Regulations in the list of enactments in that subsection;

• (b) in Part 35, references to the IA 1986 and to the I(NI)O 1989 are to be read as if they included that legislation as applied and modified by these Regulations;

• (c) sections 1139 and 1140 are, where an application is made to the court for—

• (i) a special administration order, ...

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

to be read as if they were subject to the provisions for service set out in special administration insolvency rules;

• (d) in Schedule 2, in Part 2, under heading A—

• (i) paragraph 13 is to be read as if it included these Regulations in the list of enactments in that paragraph, and

• (ii) paragraph 37 is to be read as if it included these Regulations in the list of enactments in that paragraph;

• (e) in Schedule 11A, in Part 2—

• (i) paragraph 30 is to be read as if it included these Regulations in the list of enactments in that paragraph, and

• (ii) paragraph 52 is to be read so as to include these Regulations in the list of enactments in that paragraph.

Land Registration Rules 2003

6

The following provisions are to be read as if the reference to administration were to special administration—

• (a) rule 166(1) of the Land Registration Rules (Northern Ireland) 1994, and

• (b) rule 184(1) of the Land Registration Rules 2003.

SCHEDULE 4 — Consequential amendments

PART 1 — Primary legislation

The Companies Act 1985

1

In the Companies Act 1985⁹³, in Schedule 15D, after paragraph 9(g) insert—

(h) the Payment and Electronic Money Institution Insolvency Regulations 2021.

⁹⁴.

The Finance Act 1986

2

• (1) The Finance Act 1986⁹⁵ is amended as follows.

• (2) In section 80D, in subsection (9), omit the “or” at the end of paragraph (ha) and after that paragraph insert—

(hb) if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or

• (3) In section 89AB, in subsection (9), omit the “or” at the end of paragraph (ha) and after that paragraph insert—

(hb) if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or

The Third Parties (Rights against Insurers) Act 2010

3

In the Third Parties (Rights against Insurers) Act 2010⁹⁶, in Schedule A1, in the List of Enactments, under the heading “Financial Services”, at the appropriate place insert—

Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716)

PART 2 — Secondary legislation

The EMR 2011

4

• (1) The EMR 2011 are amended as follows.

• (2) In regulation 22, in paragraph (3)—

• (a) at the appropriate places insert —

• “electronic money institution special administration” has the same meaning as in the Payment and Electronic Money Institution Insolvency Regulations 2021 (see regulation 4(3));

• “investment bank special administration” has the same meaning as in the Investment Bank Special Administration Regulations 2011 (see regulation 3(1) of those Regulations).

• (b) in the definition of “insolvency event”, omit the “or” at the end of paragraph (k) and after paragraph (l) insert—

; (m) the entry of the institution into payment institution special administration; or (n) the entry of the institution into investment bank special administration.

• (3) In regulation 24—

• (a) in the heading, at the end insert “(except electronic money institution special administration)”;

• (b) in paragraph (1) after “insolvency event” insert “(except electronic money institution special administration)”.

The IBSAR 2011

5

• (1) The IBSAR 2011 are amended as follows.

• (2) In regulation 8—

• (a) after paragraph (1) insert—

(1A) An application for an order under regulation 8 of the Payment and Electronic Money Institution Insolvency Regulations 2021 in respect of an investment bank may not be made unless the conditions in paragraph (5) are satisfied.

• (b) in paragraph (8), in the definition of “preliminary steps taken in respect of an insolvency procedure”, after paragraph (a) insert—

(aa) an application for an order under regulation 8 of the Payment and Electronic Money Institution Insolvency Regulations 2021 has been made;

• (3) In regulation 22(1)—

• (a) for “or” substitute a comma;

• (b) after “administration order” insert “or an order under regulation 8 of the Payment and Electronic Money Institution Insolvency Regulations 2021”.

The PSR 2017

6

• (1) Regulation 23 of the PSR 2017 is amended as follows.

• (2) In paragraph (14) after “insolvency event” insert “(except payment institution special administration)”.

• (3) In paragraph (18)—

• (a) in the definition of “insolvency event” omit the “or” at the end of paragraph (i) and after paragraph (j) insert—

; (k) the entry of the institution into payment institution special administration; or; (l) the entry of the institution into investment bank special administration.

• (b) at the appropriate places insert—

• “investment bank special administration” has the same meaning as in the Investment Bank Special Administration Regulations 2011 (see regulation 3(1) of those Regulations);

• “payment institution special administration” has the same meaning as in the Payment and Electronic Money Institution Insolvency Regulations 2021 (see regulation 4(3));

Signed

Alan Mak — Maggie Throup — Two of the Lords Commissioners of Her Majesty’s Treasury — 17th June 2021

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations establish a new insolvency procedure to be known as payment institution special administration or electronic money institution special administration (as the case may be) to operate as an alternative to the liquidation or administration of those institutions under the Insolvency Act 1986 (c. 45) (see regulations 7 to 47 and Schedules 1 to 4).

The main features of special administration are that—

• (a) an administrator is appointed, and the institution enters special administration, by court order (see regulations 7 to 10),

• (b) special administration objectives and procedures apply (see regulations 12 to 35),

• (c) specific provision is made about how those procedures apply to small institutions (see regulation 12(10)),

• (d) the administrator is to pursue the special administration objectives in accordance with the statement of proposals (see paragraph 49 of Schedule B1 of the Insolvency Act 1986 as applied and modified by regulation 37), and

• (e) in other respects the procedure is the same as for administration under Schedule B1 to the Insolvency Act 1986, subject to modifications and the inclusion of certain liquidation provisions of that Act (see regulation 37 and Schedules 1 and 2).

These Regulations also apply with modifications Part 24 of Financial Services and Markets Act 2000 (c. 8) (which makes provision about insolvency) to payment institutions and electronic money institutions except in respect of special administration (see regulation 48).

These Regulations also correct a defect relating to the United Kingdom’s withdrawal from the European Union and bank recovery and resolution in the Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350) (see regulation 49).

A de minimis impact assessment of the effect these Regulations will have on business and the voluntary sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ or on www.gov.uk and is published alongside these Regulations on www.legislation.gov.uk.

Footnotes

Editorial notes