Financial Services and Markets Act 2000

Part XXIVU.K. Insolvency

InterpretationU.K.

355 Interpretation of this Part.U.K.

(1)In this Part—

• F1...

• “the 1986 Act” means the M1Insolvency Act 1986;

• “the 1989 Order” means the M2Insolvency (Northern Ireland) Order 1989;

• [F2“the 2016 Act” means the Bankruptcy (Scotland) Act 2016;]

• “body” means a body of persons—

  (a)

  over which the court has jurisdiction under any provision of, or made under, the 1986 Act (or the 1989 Order); but

  (b)

  which is not a building society, a friendly society or [F3a registered society]; and

• “court” means—

  (a)

  the court having jurisdiction for the purposes of the 1985 Act or the 1986 Act; or

  (b)

  in Northern Ireland, the High Court.

• [F4“creditors’ decision procedure” has the meaning given by section 379ZA(11) of the 1986 Act;]

• [F5“PRA-regulated person” means a person who—

  (a)

  is or has been a PRA-authorised person,

  (b)

  is or has been an appointed representative whose principal (or one of whose principals) is, or was, a PRA-authorised person, or

  (c)

  is carrying on or has carried on a PRA-regulated activity in contravention of the general prohibition.]

• [F6“qualifying decision procedure” has the meaning given by section 246ZE(11) of the 1986 Act.]

(2)In this Part “insurer” has such meaning as may be specified in an order made by the Treasury.

[F7Arrangements and reconstructions: companies in financial difficultyU.K.

355APowers of FCA and PRA to participate in proceedingsU.K.

(1)This section applies where Part 26A of the Companies Act 2006 (“the 2006 Act”) (arrangements and reconstructions: companies in financial difficulty) applies in relation to a company which—

(a)is, or has been, an authorised person or recognised investment exchange;

(b)is, or has been, any of the following—

(i)an electronic money institution;

(ii)an authorised payment institution;

(iii)a small payment institution;

(iv)a registered account information service provider;

(c)is, or has been, an appointed representative; or

(d)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(2)A relevant applicant must give notice to the appropriate regulator of—

(a)any application which the relevant applicant intends to make under section 901C(1) of the 2006 Act, and

(b)any application which the relevant applicant believes a creditor or member of the company has made, or intends to make, under section 901C(1) of that Act in relation to the company.

(3)A relevant applicant may not make an application under section 901C(1) of the 2006 Act in relation to a company that is a PRA-regulated person without the consent of the PRA.

(4)In this section “relevant applicant”, in relation to a company, means—

(a)the company;

(b)if the company is being wound up, the liquidator;

(c)if the company is in administration, the administrator.

(5)The appropriate regulator is entitled to be heard at any hearing of an application made under section 901C or 901F of the 2006 Act in relation to the company.

(6)Any notice or other document required to be sent to a creditor of the company must also be sent to the appropriate regulator.

(7)A person appointed for the purpose by the appropriate regulator is entitled—

(a)to attend any meeting of creditors of the company summoned under section 901C of the 2006 Act;

(b)to make representations as to any matter for decision at such a meeting.

(8)In this section—

• “the appropriate regulator” means—

  (a)

  where the company is a PRA-regulated person, each of the FCA and the PRA, except that the reference in subsection (7) to a person appointed by the appropriate regulator is to be read as a reference to a person appointed by either the FCA or the PRA;

  (b)

  in any other case, the FCA;

• “authorised payment institution”, “small payment institution” and “registered account information service provider” have the same meaning as in the Payment Services Regulations 2017 (S.I. 2017/752) (see regulation 2 of those Regulations);

• “electronic money institution” has the same meaning as in the Electronic Money Regulations 2011 (S.I. 2011/99) (see regulation 2 of those Regulations).

355BEnforcement of requirements imposed by section 355AU.K.

(1)For the purpose of enforcing a requirement imposed on a company by section 355A(2) or (3), the appropriate regulator may exercise any of the following powers (so far as it would not otherwise be exercisable)—

(a)the power to publish a statement under section 205 (public censure);

(b)the power to impose a financial penalty under section 206.

(2)Accordingly, sections 205 and 206, and so much of this Act as relates to either of those sections, have effect in relation to a requirement imposed by section 355A(2) or (3) as if—

(a)any reference to an authorised person included (so far as would not otherwise be the case) a reference to a company falling within any of paragraphs (a) to (d) of section 355A(1),

(b)any reference to a relevant requirement included (so far as would not otherwise be the case) a reference to a requirement imposed by section 355A(2) or (3), and

(c)“the appropriate regulator” had the same meaning as in section 355A.

(3)In this section “the appropriate regulator” has the same meaning as in section 355A.]

Voluntary arrangementsU.K.

356 [F8Powers of FCA and PRA] to participate in proceedings: company voluntary arrangements.U.K.

[F9(1)Where a voluntary arrangement has effect under Part I of the 1986 Act in respect of a company or insolvent partnership which is an authorised person, [F10or recognised investment exchange, the appropriate regulator] may apply to the court under section 6 or 7 of that Act.]

[F11(2)Where a voluntary arrangement has been approved under Part II of the 1989 Order in respect of a company or insolvent partnership which is an authorised person, [F12or recognised investment exchange, the appropriate regulator] may apply to the court under Article 19 or 20 of that Order.]

(3)If a person other than [F13a regulator] makes an application to the court in relation to the company or insolvent partnership under [F14any] of those provisions, [F15the appropriate regulator] is entitled to be heard at any hearing relating to the application.

[F16(4)"The appropriate regulator” means—

(a)in the case of a PRA-authorised person—

(i)for the purposes of subsections (1) and (2), the FCA or the PRA, and

(ii)for the purposes of subsection (3), each of the FCA and the PRA;

(b)in any other case, the FCA.

(5)If either regulator makes an application to the court under any of those provisions in relation to a PRA-authorised person, the other regulator is entitled to be heard at any hearing relating to the application.]

357 [F17Powers of FCA and PRA] to participate in proceedings: individual voluntary arrangements.U.K.

(1)The [F18appropriate regulator] is entitled to be heard on an application by an individual who is an authorised person under section 253 of the 1986 Act (or Article 227 of the 1989 Order).

(2)Subsections [F19(2A)] to (6) apply if such an order is made on the application of such a person.

[F20(2A)Where under section 257 of the 1986 Act the individual’s creditors are asked to decide whether to approve the proposed voluntary arrangement—

(a)notice of the creditors’ decision procedure must be given to the appropriate regulator; and

(b)the appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) the creditors’ decision procedure by which the decision is made.

(2B)Notice of the decision made by the creditors’ decision procedure is to be given to the appropriate regulator by the nominee or the nominee’s replacement under section 256(3) or 256A(4) of the 1986 Act.]

(3)A person appointed for the purpose by the [F18appropriate regulator] is entitled to attend any meeting of creditors of the debtor summoned under [F21Article 231 of the 1989 Order].

(4)Notice of the result of a meeting so summoned is to be given to the [F18appropriate regulator] by the chairman of the meeting.

(5)The [F18appropriate regulator] may apply to the court—

(a)under section 262 of the 1986 Act (or Article 236 of the 1989 Order); or

(b)under section 263 of the 1986 Act (or Article 237 of the 1989 Order).

(6)If a person other than [F22a regulator] makes an application to the court under any provision mentioned in subsection (5), [F23the appropriate regulator] is entitled to be heard at any hearing relating to the application.

[F24(7)"The appropriate regulator” means—

[F25(a)in the case of a PRA-authorised person, each of the FCA and the PRA, except that the references in subsections (2A)(b) and (3) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;]

(b)in any other case, the FCA.

(8)If either regulator makes an application to the court under any of the provisions mentioned in subsection (5) in relation to a PRA-authorised person, the other regulator is entitled to be heard at any hearing relating to the application.]

358 [F26Powers of FCA and PRA] to participate in proceedings: trust deeds for creditors in Scotland.U.K.

(1)This section applies where a trust deed has been granted by or on behalf of a debtor who is an authorised person [F27or recognised investment exchange].

(2)The trustee must, as soon as practicable after he becomes aware that the debtor is an authorised person [F28or recognised investment exchange], send to the [F29appropriate regulator]—

(a)in every case, a copy of the trust deed;

(b)where any other document or information is sent to every creditor known to the trustee in pursuance of [F30section 170 of the 2016] Act, a copy of such document or information.

F31(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The [F29appropriate regulator] must be given the same notice as the creditors of any meeting of creditors held in relation to the trust deed.

(5)A person appointed for the purpose by [F32the appropriate regulator] is entitled to attend and participate in (but not to vote at) any such meeting of creditors as if [F33that regulator] were a creditor under the deed.

(6)This section does not affect any right [F34a regulator] has as a creditor of a debtor who is an authorised person [F35or recognised investment exchange].

[F36(6A)"The appropriate regulator” means—

(a)in the case of a PRA-authorised person—

(i)for the purposes of subsections (2) F37... and (4), each of the FCA and the PRA, and

(ii)for the purposes of subsection (5), the FCA or the PRA;

(b)in any other case, the FCA.]

(7)Expressions used in this section and in the [F382016] Act have the same meaning in this section as in that Act.

Administration ordersU.K.

[F39359 Administration orderU.K.

(1)The [F40FCA] may make an administration application under Schedule B1 to the 1986 Act [F41or Schedule B1 to the 1989 Order] in relation to a company or insolvent partnership which—

(a)is or has been an authorised person [F42or recognised investment exchange],

(b)is or has been an appointed representative, or

(c)is carrying on or has carried on a regulated activity in contravention of the general prohibition.

[F43(1A)The PRA may make an administration application under Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which is a PRA-regulated person.]

(2)Subsection (3) applies in relation to an administration application made (or a petition presented) by [F44a regulator] by virtue of this section.

(3)Any of the following shall be treated for the purpose of paragraph 11(a) of Schedule B1 to the 1986 Act [F45or paragraph 12(a) of Schedule B1 to the 1989 Order] as unable to pay its debts—

(a)a company or partnership in default on an obligation to pay a sum due and payable under an agreement, F46. . .

(b)an authorised deposit taker in default on an obligation to pay a sum due and payable in respect of a relevant deposit.[F47, and—

(c)an authorised reclaim fund in default on an obligation to pay a sum payable as a result of a claim made by virtue of section 1(2)(b) or 2(2)(b) of the Dormant Bank and Building Society Accounts Act 2008.]

(4)In this section—

• “agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the company or partnership,

• “authorised deposit taker” means a person with a [F48Part 4A] permission to accept deposits (but not a person who has a [F48Part 4A] permission to accept deposits only for the purpose of carrying on another regulated activity in accordance with that permission),

• [F49“authorised reclaim fund” [F50has the same meaning as in the Dormant Assets Acts 2008 to 2022 (see section 26 of the Dormant Assets Act 2022);]]

• “company” means a company—

  (a)

  in respect of which an administrator may be appointed under Schedule B1 to the 1986 Act, or

  (b)

  [F51in respect of which an administrator may be appointed under Schedule B1 to the 1989 Order,]

• “relevant deposit” shall, ignoring any restriction on the meaning of deposit arising from the identity of the person making the deposit, be construed in accordance with—

  (a)

  section 22,

  (b)

  any relevant order under that section, and

  (c)

  Schedule 2.

(5)The definition of “authorised deposit taker” in subsection (4) shall be construed in accordance with—

(a)section 22,

(b)any relevant order under that section, and

(c)Schedule 2.]

360 Insurers.U.K.

(1)The Treasury may by order provide that such provisions of Part II of the 1986 Act (or Part III of the 1989 Order) as may be specified are to apply in relation to insurers with such modifications as may be specified.

(2)An order under this section—

(a)may provide that such provisions of this Part as may be specified are to apply in relation to the administration of insurers in accordance with the order with such modifications as may be specified; and

(b)requires the consent of the Secretary of State.

(3)“Specified” means specified in the order.

[F52(4)Subsection (5) applies where, by virtue of an order under this section, a person may be appointed as administrator of an insurer.

(5)While a write-down order under section 377A has effect in relation to an insurer, a person may not be appointed as administrator of the insurer without the consent of the PRA.]

[F54361Administrator’s duty to report to [F53FCA and PRA] U.K.

(1)This section applies where a company or partnership is—

(a)in administration within the meaning of Schedule B1 to the 1986 Act, or

[F55(b)in administration within the meaning of Schedule B1 to the 1989 Order.]

[F56(2)If the administrator thinks that the company or partnership is carrying on, or has carried on—

(a)a regulated activity in contravention of the general prohibition, or

(b)a credit-related regulated activity in contravention of section 20,

the administrator must report the matter to the appropriate regulator without delay.]

[F57(2A)"The appropriate regulator” means—

(a)where the regulated activity is a PRA-regulated activity, the FCA and the PRA;

(b)in any other case, the FCA.]

[F58(3)Subsection (2) does not apply where—

(a)the administration arises out of an administration order made on an application made or petition presented by a regulator, and

(b)the regulator's application or petition depended on a contravention by the company or partnership of the general prohibition.]]

362 [F59Powers of FCA and PRA] to participate in proceedings.U.K.

(1)This section applies if a person F60... [F61makes an administration application under Schedule B1 to the 1986 Act [F62or Schedule B1 to the 1989 Order]] in relation to a company or partnership which—

(a)is, or has been, an authorised person [F63or recognised investment exchange];

(b)is, or has been, an appointed representative; or

(c)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

[F64(1A)This section also applies in relation to—

(a)the appointment under paragraph 14 or 22 of Schedule B1 to the 1986 Act [F65or paragraph 15 or 23 of Schedule B1 to the 1989 Order] of an administrator of a company of a kind described in subsection (1)(a) to (c), or

(b)the filing with the court of a copy of notice of intention to appoint an administrator under [F66any] of those paragraphs.]

[F67(1B)This section also applies in relation to—

(a)the appointment under paragraph 22 of Schedule B1 to the 1986 Act (as applied by order under section 420 of the 1986 Act), or under paragraph 23 of Schedule B1 to the 1989 Order (as applied by order under Article 364 of the 1989 Order), of an administrator of a partnership of a kind described in subsection (1)(a) to (c), or

(b)the filing with the court of a copy of notice of intention to appoint an administrator under either of those paragraphs (as so applied).]

(2)The [F68appropriate regulator] is entitled to be heard—

(a)at the hearing of the [F69administration application [F70or the petition]]; and

(b)at any other hearing of the court in relation to the company or partnership under Part II of the 1986 Act (or Part III of the 1989 Order).

(3)Any notice or other document required to be sent to a creditor of the company or partnership must also be sent to the [F68appropriate regulator].

[F71(4)The [F68appropriate regulator] may apply to the court under paragraph 74 of Schedule B1 to the 1986 Act [F72or paragraph 75 of Schedule B1 to the 1989 Order].

(4A)In respect of an application under subsection (4)—

(a)paragraph 74(1)(a) and (b) shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words “harm the interests of some or all members or creditors”, and

[F73(b)paragraph 75(1)(a) and (b) of Schedule B1 to the 1989 Order shall have effect as if for the words “harm the interests of the applicant (whether alone or in common with some or all other members or creditors)” there were substituted the words harm the interests of some or all members or creditors.]]

(5)A person appointed for the purpose by the [F68appropriate regulator] is entitled—

(a)to attend any meeting of creditors of the company or partnership summoned under any enactment;

(b)to attend any meeting of a committee established under [F74paragraph 57 of Schedule B1 to the 1986 Act] (or [F75paragraph 58 of Schedule B1 to the 1989 Order]; and

(c)to make representations as to any matter for decision at such a meeting.

[F76(5A)The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a qualifying decision procedure by which a decision about any matter is sought from the creditors of the company or partnership.]

(6)If, during the course of the administration of a company, a compromise or arrangement [F77in relation to which Part 26 of the Companies Act 2006 applies] is proposed between the company and its creditors, or any class of them, the [F68appropriate regulator] may apply to the court under [F78section 896 or 899 of [F79that Act]].

[F80(6A)If, during the course of the administration of a company, a compromise or arrangement in relation to which Part 26A of the Companies Act 2006 applies is proposed between the company and its creditors, or any class of them, the appropriate regulator may apply to the court under section 901C or 901F of that Act.]

[F81[F82(7)“The appropriate regulator” means—

(a)where the company or partnership is a PRA-regulated person, each of the FCA and the PRA, except that the references in subsections (5) and (5A) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;

(b)in any other case, the FCA.]

(8)But where the administration application was made by a regulator “the appropriate regulator” does not include that regulator.]

[F83362A Administrator appointed by company or directorsU.K.

(1)This section applies in relation to a company [F84or partnership] of a kind described in section 362(1)(a) to (c).

[F85(2)An administrator of the company or partnership may not be appointed under a provision specified in subsection (2A) without the consent of the appropriate regulator.

(2A)Those provisions are—

(a)paragraph 22 of Schedule B1 to the 1986 Act (including that paragraph as applied in relation to partnerships by order under section 420 of that Act);

(b)paragraph 23 of Schedule B1 to the 1989 Order (including that paragraph as applied in relation to partnerships by order under article 364 of that Order).

(2B)“The appropriate regulator” means—

(a)where the company or partnership is a PRA-regulated person, the PRA, and

(b)in any other case, the FCA.]

(3)Consent under subsection (2)—

(a)must be in writing, and

(b)must be filed with the court along with the notice of intention to appoint under paragraph 27 of [F86Schedule B1 to the 1986 Act or paragraph 28 of Schedule B1 to the 1989 Order].

(4)In a case where no notice of intention to appoint is required—

(a)subsection (3)(b) shall not apply, but

(b)consent under subsection (2) must accompany the notice of appointment filed under paragraph 29 of [F87Schedule B1 to the 1986 Act or paragraph 30 of Schedule B1 to the 1989 Order].]

ReceivershipU.K.

363 [F88Powers of FCA and PRA] to participate in proceedings.U.K.

(1)This section applies if a receiver has been appointed in relation to a company which—

(a)is, or has been, an authorised person [F89or recognised investment exchange];

(b)is, or has been, an appointed representative; or

(c)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(2)The [F90appropriate regulator] is entitled to be heard on an application made under section 35 or 63 of the 1986 Act (or Article 45 of the 1989 Order).

(3)The [F90appropriate regulator] is entitled to make an application under section 41(1)(a) or 69(1)(a) of the 1986 Act (or Article 51(1)(a) of the 1989 Order).

(4)A report under section 48(1) or 67(1) of the 1986 Act (or Article 58(1) of the 1989 Order) must be sent by the person making it to the [F90appropriate regulator].

(5)A person appointed for the purpose by the [F90appropriate regulator] is entitled—

(a)to attend any meeting of creditors of the company summoned under any enactment;

(b)to attend any meeting of a committee established under section 49 or 68 of the 1986 Act (or Article 59 of the 1989 Order); and

(c)to make representations as to any matter for decision at such a meeting.

[F91(6)"The appropriate regulator” means—

(a)for the purposes of subsections (2) to (4)—

(i)where the company is a PRA-regulated person, each of the FCA and the PRA, and

(ii)in any other case, the FCA;

(b)for the purposes of subsection (5)—

(i)where the company is a PRA-regulated person, the FCA or the PRA, and

(ii)in any other case, the FCA.]

364 Receiver’s duty to report to [F92FCA and PRA] U.K.

If—

(a)a receiver has been appointed in relation to a company, and

(b)it appears to the receiver that the company is carrying on, or has carried on, a regulated activity in contravention of the general prohibition [F93or a credit-related regulated activity in contravention of section 20],

the receiver must report the matter [F94without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA].

Voluntary winding upU.K.

365 [F95Powers of FCA and PRA] to participate in proceedings.U.K.

(1)This section applies in relation to a company which—

(a)is being wound up voluntarily;

(b)is an authorised person [F96or recognised investment exchange]; and

(c)is not an insurer effecting or carrying out contracts of long-term insurance.

(2)The [F97appropriate regulator] may apply to the court under section 112 of the 1986 Act (or Article 98 of the 1989 Order) in respect of the company.

(3)The [F97appropriate regulator] is entitled to be heard at any hearing of the court in relation to the voluntary winding up of the company.

(4)Any notice or other document required to be sent to a creditor of the company must also be sent to the [F97appropriate regulator].

(5)A person appointed for the purpose by the [F97appropriate regulator] is entitled—

(a)to attend any meeting of creditors of the company summoned under any enactment;

(b)to attend any meeting of a committee established under section 101 of the 1986 Act (or Article 87 of the 1989 Order); and

(c)to make representations as to any matter for decision at such a meeting.

[F98(5A)The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a qualifying decision procedure by which a decision about any matter is sought from the creditors of the company.]

(6)The voluntary winding up of the company does not bar the right of the [F97appropriate regulator] to have it wound up by the court.

(7)If, during the course of the winding up of the company, a compromise or arrangement [F99in relation to which Part 26 of the Companies Act 2006 applies] is proposed between the company and its creditors, or any class of them, the [F97appropriate regulator] may apply to the court under [F100section 896 or 899 of [F101that Act]].

[F102(7A)If, during the course of the winding up of the company, a compromise or arrangement in relation to which Part 26A of the Companies Act 2006 applies is proposed between the company and its creditors, or any class of them, the appropriate regulator may apply to the court under section 901C or 901F of that Act.]

[F103(8)“The appropriate regulator” means—

(a)where the company is a PRA-authorised person, each of the FCA and the PRA, except that the references in subsections (5) and (5A) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;

(b)in any other case, the FCA.]

366 Insurers effecting or carrying out long-term contracts or insurance.U.K.

(1)An insurer effecting or carrying out contracts of long-term insurance may not be wound up voluntarily without the consent of the [F104PRA].

(2)If notice of a general meeting of such an insurer is given, specifying the intention to propose a resolution for voluntary winding up of the insurer, a director of the insurer must notify the [F105PRA] as soon as practicable after he becomes aware of it.

(3)A person who fails to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

[F106(4)A winding up resolution may not be passed—

(a)as a written resolution (in accordance with Chapter 2 of Part 13 of the Companies Act 2006), or

(b)at a meeting called in accordance with section 307(4) to (6) or 337(2) of that Act (agreement of members to calling of meeting at short notice).]

(5)A copy of a winding-up resolution forwarded to the registrar of companies in accordance with [F107section 30 of the Companies Act 2006] must be accompanied by a certificate issued by the [F108PRA] stating that it consents to the voluntary winding up of the insurer.

(6)If subsection (5) is complied with, the voluntary winding up is to be treated as having commenced at the time the resolution was passed.

(7)If subsection (5) is not complied with, the resolution has no effect.

(8)“Winding-up resolution” means a resolution for voluntary winding up of an insurer effecting or carrying out contracts of long-term insurance.

[F109(9)Before giving or refusing consent under subsection (1), the PRA must consult the FCA.

(10)In the event that the activity of effecting or carrying out long-term contracts of insurance as principal is not to any extent a PRA-regulated activity—

(a)references to the PRA in subsections (1), (2) and (5) are to be read as references to the FCA, and

(b)subsection (9) does not apply.]

Winding up by the courtU.K.

367 Winding-up petitions.U.K.

(1)The [F110FCA] may present a petition to the court for the winding up of a body which—

(a)is, or has been, an authorised person [F111or recognised investment exchange];

(b)is, or has been, an appointed representative; or

(c)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

[F112(1A)The PRA may present a petition to the court for the winding up of a body which is a PRA-regulated person.]

(2)In [F113subsections (1) and (1A)] “body” includes any partnership.

(3)On such a petition, the court may wind up the body if—

[F114(za)in the case of an insurance undertaking or reinsurance undertaking, the PRA has cancelled the body’s Part 4A permission pursuant to section 55J(7C);]

(a)the body is unable to pay its debts within the meaning of section 123 or 221 of the 1986 Act (or Article 103 or 185 of the 1989 Order); or

(b)the court is of the opinion that it is just and equitable that it should be wound up.

(4)If a body is in default on an obligation to pay a sum due and payable under an agreement, it is to be treated for the purpose of subsection (3)(a) as unable to pay its debts.

(5)“Agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the body concerned.

(6)Subsection (7) applies if a petition is presented under subsection (1) [F115or (1A)] for the winding up of a partnership—

(a)on the ground mentioned in subsection (3)(b); or

(b)in Scotland, on a ground mentioned in subsection (3)(a) or (b).

(7)The court has jurisdiction, and the 1986 Act (or the 1989 Order) has effect, as if the partnership were an unregistered company as defined by section 220 of that Act (or Article 184 of that Order).

F116368 Winding-up petitions: EEA and Treaty firms.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

369 Insurers: service of petition etc. on [F117FCA and PRA].U.K.

(1)If a person other than [F118a regulator] presents a petition for the winding up of an authorised person with permission to effect or carry out contracts of insurance, the petitioner must serve a copy of the petition [F119on the appropriate regulator].

(2)If a person other than [F120a regulator] applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of an authorised person with permission to effect or carry out contracts of insurance, the applicant must serve a copy of the application [F121on the appropriate regulator].

[F122(3)"The appropriate regulator” means—

(a)in relation to a PRA-authorised person, the FCA and the PRA, and

(b)in any other case, the FCA.

(4)If either regulator—

(a)presents a petition for the winding up of a PRA-authorised person with permission to effect or carry out contracts of insurance, or

(b)applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of a PRA-authorised person with permission to effect or carry out contracts of insurance,

that regulator must serve a copy of the petition or application (as the case requires) on the other regulator.]

[F123369AReclaim funds: service of petition etc on [F124FCA and PRA] U.K.

(1)If a person [F125other than a regulator] presents a petition for the winding up of an authorised reclaim fund, the petitioner must serve a copy of the petition [F126on the appropriate regulator].

(2)If a person [F127other than a regulator] applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of an authorised reclaim fund, the applicant must serve a copy of the application [F128on the appropriate regulator].

(3)In this section “authorised reclaim fund” [F129has the same meaning as in the Dormant Assets Acts 2008 to 2022 (see section 26 of the Dormant Assets Act 2022)].

[F130(4)"The appropriate regulator” means—

(a)in relation to an authorised reclaim fund that is a PRA-authorised person, the FCA and the PRA, and

(b)in relation to any other authorised reclaim fund, the FCA.

(5)If either regulator—

(a)presents a petition for the winding up of an authorised reclaim fund that is a PRA-authorised person, or

(b)applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of an authorised reclaim fund that is a PRA-authorised person,

that regulator must serve a copy of the petition or application (as the case requires) on the other regulator.]]

[F131370Liquidator's duty to report to FCA and PRAU.K.

(1)If—

(a)a company is being wound up voluntarily or a body is being wound up on a petition presented by any person, and

(b)it appears to the liquidator that the company or body is carrying on, or has carried on—

(i)a regulated activity in contravention of the general prohibition, or

(ii)a credit-related regulated activity in contravention of section 20,

the liquidator must report the matter without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA.

(2)Subsection (1) does not apply where—

(a)a body is being wound up on a petition presented by a regulator, and

(b)the regulator's petition depended on a contravention by the body of the general prohibition.]

371 [F132Powers of FCA and PRA] to participate in proceedings.U.K.

(1)This section applies if a person F133... presents a petition for the winding up of a body which—

(a)is, or has been, an authorised person [F134or recognised investment exchange];

(b)is, or has been, an appointed representative; or

(c)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(2)The [F135appropriate regulator] is entitled to be heard—

(a)at the hearing of the petition; and

(b)at any other hearing of the court in relation to the body under or by virtue of Part IV or V of the 1986 Act (or Part V or VI of the 1989 Order).

(3)Any notice or other document required to be sent to a creditor of the body must also be sent to the [F135appropriate regulator].

(4)A person appointed for the purpose by the [F135appropriate regulator] is entitled—

(a)to attend any meeting of creditors of the body;

(b)to attend any meeting of a committee established for the purposes of Part IV or V of the 1986 Act under section 101 of that Act or under section 141 or 142 of that Act;

(c)to attend any meeting of a committee established for the purposes of Part V or VI of the 1989 Order under Article 87 of that Order or under Article 120 of that Order; and

(d)to make representations as to any matter for decision at such a meeting.

[F136(4A)The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a qualifying decision procedure by which a decision about any matter is sought from the creditors of the body.]

(5)If, during the course of the winding up of a company, a compromise or arrangement [F137in relation to which Part 26 of the Companies Act 2006 applies] is proposed between the company and its creditors, or any class of them, the [F135appropriate regulator] may apply to the court under [F138section 896 or 899 of [F139that Act]].

[F140(5A)If, during the course of the winding up of a company, a compromise or arrangement in relation to which Part 26A of the Companies Act 2006 applies is proposed between the company and its creditors, or any class of them, the appropriate regulator may apply to the court under section 901C or 901F of that Act.]

[F141(6)“The appropriate regulator” means—

(a)where the body is a PRA-regulated person, each of the FCA and the PRA, except that the references in subsections (4) and (4A) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;

(b)in any other case, the FCA.]

(7)But where the petition was presented by a regulator “the appropriate regulator” does not include the regulator which presented the petition.

BankruptcyU.K.

372 Petitions.U.K.

(1)The [F142FCA] may present a petition to the court—

(a)under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or

(b)under section [F1432 or 5 of the 2016] Act for the sequestration of the estate of an individual.

[F144(1A)The PRA may present a petition to the court—

(a)under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual who is a PRA-regulated person;

(b)under section [F1452 or 5 of the 2016] Act for the sequestration of the estate of an individual who is a PRA-regulated person.]

(2)But [F146a petition may be presented by virtue of subsection (1) or (1A)] only on the ground that—

(a)the individual appears to be unable to pay a regulated activity debt; or

(b)the individual appears to have no reasonable prospect of being able to pay a regulated activity debt.

(3)An individual appears to be unable to pay a regulated activity debt if he is in default on an obligation to pay a sum due and payable under an agreement.

(4)An individual appears to have no reasonable prospect of being able to pay a regulated activity debt if—

(a)[F147a regulator] has served on him a demand requiring him to establish to the satisfaction of [F148that regulator] that there is a reasonable prospect that he will be able to pay a sum payable under an agreement when it falls due;

(b)at least three weeks have elapsed since the demand was served; and

(c)the demand has been neither complied with nor set aside in accordance with rules.

(5)A demand made under subsection (4)(a) is to be treated for the purposes of the 1986 Act (or the 1989 Order) as if it were a statutory demand under section 268 of that Act (or Article 242 of that Order).

(6)For the purposes of a petition presented in accordance with subsection (1)(b) [F149or (1A)(b)]—

(a)[F150the regulator by which the petition is presented] is to be treated as a qualified creditor; and

(b)a ground mentioned in subsection (2) constitutes apparent insolvency.

(7)“Individual” means an individual—

(a)who is, or has been, an authorised person; or

(b)who is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(8)“Agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the individual concerned.

(9)“Rules” means—

(a)in England and Wales, rules made under section 412 of the 1986 Act;

(b)in Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and

(c)in Northern Ireland, rules made under Article 359 of the 1989 Order.

373 Insolvency practitioner’s duty to report [F151to FCA and PRA].U.K.

(1)If—

(a)a bankruptcy order or sequestration award is in force in relation to an individual F152..., and

(b)it appears to the insolvency practitioner that the individual is carrying on, or has [F153carried on—

(i)a regulated activity in contravention of the general prohibition, or

(ii)a credit-related regulated activity in contravention of section 20,]

the insolvency practitioner must report the matter [F154without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA].

[F155(1A)Subsection (1) does not apply where—

(a)the bankruptcy order or sequestration award is in force by virtue of a petition presented by a regulator, and

(b)the regulator's petition depended on a contravention by the individual of the general prohibition.]

(2)“Bankruptcy order” means a bankruptcy order under Part IX of the 1986 Act (or Part IX of the 1989 Order).

(3)“Sequestration award” means an award of sequestration under section [F15622 of the 2016] Act.

(4)“Individual” includes an entity mentioned in section 374(1)(c).

374 [F157Powers of FCA or PRA] to participate in proceedings.U.K.

(1)This section applies if a person F158... presents a petition to the court—

(a)under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual;

(b)under section [F1592 or 5 of the 2016] Act for the sequestration of the estate of an individual; or

(c)under section 6 of the [F1602016] Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section.

(2)The [F161appropriate regulator] is entitled to be heard—

(a)at the hearing of the petition; and

(b)at any other hearing in relation to the individual or entity under—

(i)Part IX of the 1986 Act;

(ii)Part IX of the 1989 Order; or

(iii)the [F1622016] Act.

(3)[F163In the case of a petition presented under Article 238 of the 1989 Order, a copy of the report prepared under Article 248 of that Order] must also be sent to the [F161appropriate regulator].

(4)A person appointed for the purpose by the [F161appropriate regulator] is entitled—

(a)to attend any meeting of creditors of the individual or entity;

(b)to attend any meeting of a committee established under section 301 of the 1986 Act (or Article 274 of the 1989 Order);

(c)to attend any meeting of commissioners held under paragraph [F16426 or 27 of schedule 6 to the 2016] Act; and

(d)to make representations as to any matter for decision at such a meeting.

[F165(4A)The appropriate regulator or a person appointed by the appropriate regulator is entitled to participate in (but not vote in) a creditors’ decision procedure by which a decision about any matter is sought from the creditors of the individual or entity.]

(5)“Individual” means an individual who—

(a)is, or has been, an authorised person; or

(b)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

(6)“Entity” means an entity which—

(a)is, or has been, an authorised person; or

(b)is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.

[F166[F167(7)“The appropriate regulator” means—

(a)where the individual or entity is a PRA-regulated person, each of the FCA and the PRA, except that the references in subsections (4) and (4A) to a person appointed by the appropriate regulator are to be read as references to a person appointed by either the FCA or the PRA;

(b)in any other case, the FCA.]

(8)But where the petition was presented by a regulator “the appropriate regulator” does not include the regulator which presented the petition.]

Provisions against debt avoidanceU.K.

375 [F168Right of FCA and PRA] to apply for an order.U.K.

(1)The [F169FCA] may apply for an order under section 423 of the 1986 Act (or Article 367 of the 1989 Order) in relation to a debtor if—

(a)at the time the transaction at an undervalue was entered into, the debtor was carrying on a regulated activity (whether or not in contravention of the general prohibition); and

(b)a victim of the transaction is or was party to an agreement entered into with the debtor, the making or performance of which constituted or was part of a regulated activity carried on by the debtor.

[F170(1A)The PRA may apply for an order under section 423 of the 1986 Act (or Article 367 of the 1989 Order) in relation to a debtor if—

(a)at the time the transaction at an undervalue was entered into, the debtor was carrying on a PRA-regulated activity (whether or not in contravention of the general prohibition); and

(b)a victim of the transaction is or was party to an agreement entered into with the debtor, the making or performance of which constituted or was part of a PRA-regulated activity carried on by the debtor.]

(2)An application made under this section is to be treated as made on behalf of every victim of the transaction to whom subsection (1)(b) [F171or subsection (1A)(b) (as the case may be)] applies.

(3)Expressions which are given a meaning in Part XVI of the 1986 Act (or Article 367, 368 or 369 of the 1989 Order) have the same meaning when used in this section.

Supplemental provisions concerning insurersU.K.

376 Continuation of contracts of long-term insurance where insurer in liquidation.U.K.

(1)This section applies in relation to the winding up of an insurer which effects or carries out contracts of long-term insurance.

(2)Unless the court otherwise orders, the liquidator must carry on the insurer’s business so far as it consists of carrying out the insurer’s contracts of long-term insurance with a view to its being transferred as a going concern to a person who may lawfully carry out those contracts.

(3)In carrying on the business, the liquidator—

(a)may agree to the variation of any contracts of insurance in existence when the winding up order is made; but

(b)must not effect any new contracts of insurance.

(4)If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the insurer attributable to contracts of long-term insurance effected by it require the appointment of a special manager, he may apply to the court.

(5)On such an application, the court may appoint a special manager to act during such time as the court may direct.

(6)The special manager is to have such powers, including any of the powers of a receiver or manager, as the court may direct.

(7)Section 177(5) of the 1986 Act (or Article 151(5) of the 1989 Order) applies to a special manager appointed under subsection (5) as it applies to a special manager appointed under section 177 of the 1986 Act (or Article 151 of the 1989 Order).

(8)If the court thinks fit, it may reduce the value of one or more of the contracts of long-term insurance effected by the insurer.

(9)Any reduction is to be on such terms and subject to such conditions (if any) as the court thinks fit.

(10)The court may, on the application of an official, appoint an independent actuary to investigate the insurer’s business so far as it consists of carrying out its contracts of long-term insurance and to report to the official—

(a)on the desirability or otherwise of that part of the insurer’s business being continued; and

(b)on any reduction in the contracts of long-term insurance effected by the insurer that may be necessary for successful continuation of that part of the insurer’s business.

(11)“Official” means—

(a)the liquidator;

(b)a special manager appointed under subsection (5); or

(c)the [F172PRA].

[F173(11A)The PRA must—

(a)consult the FCA before making an application under subsection (10), and

(b)provide the FCA with a copy of any actuary's report made to the PRA under that subsection.

(11B)In the event that the activity of effecting or carrying out long-term contracts of insurance as principal is not to any extent a [F174PRA-regulated] activity—

(a)the reference in subsection (11)(c) to the PRA is to be read as a reference to the FCA, and

(b)subsection (11A) does not apply.]

(12)The liquidator may make an application in the name of the insurer and on its behalf under Part VII without obtaining the permission that would otherwise be required by [F175Article 142 of, and Schedule 2 to, the 1989 Order.]

F176377 Reducing the value of contracts instead of winding up.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F177377AWrite-down ordersU.K.

(1)A “write-down order” is an order of the court directing that the value of one or more of an insurer’s liabilities is reduced on such terms as may be specified in the order.

(2)The court may make a write-down order in relation to an insurer if it is satisfied that—

(a)the insurer is, or is likely to become, unable to pay its debts (within the meaning given to that expression by section 123 of the 1986 Act or Article 103 of the 1989 Order), and

(b)making the order is reasonably likely to lead to a better outcome for the insurer’s policyholders and other creditors (taken as a whole) than not making the order.

(3)A write-down order—

(a)takes effect on the later of—

(i)the date specified in the order, and

(ii)the date on which the appointment of a person to act as the manager of the order first takes effect (see section 377G(7));

(b)ceases to have effect in accordance with section 377H;

(c)may be revoked or varied in accordance with section 377I.

(4)A write-down order may not be made in relation to an insurer—

(a)which is in administration (within the meaning of Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order), or

(b)which is in liquidation by virtue of—

(i)a resolution for voluntary winding up, or

(ii)a winding-up order under section 125 of the 1986 Act or Article 105 of the 1989 Order.

(5)A write-down order may not reduce the value of an excluded liability (within the meaning given by section 377B).

(6)A liability, to the extent of its reduction by a write-down order under this section, is to be treated as extinguished unless and until revived by section 377H or 377I.

(7)In this section, “creditor” includes a contingent or prospective creditor.]

[F177377BExcluded liabilitiesU.K.

(1)Each of the following is an “excluded liability”—

(a)a liability with an original maturity of less than 7 days;

(b)an amount payable in respect of goods delivered, or a service provided, on or after the date on which the write-down order is made;

(c)an amount in respect of remuneration or expenses of a person appointed under section 377G to act as the manager of the write-down order (including amounts incurred before, as well as after, the person’s appointment in connection with the order or the application for the order);

(d)an amount secured on property of any kind, other than an amount secured by a charge which, as created, was a floating charge;

(e)an amount payable in respect of wages or salary arising under a contract of employment;

(f)a contribution or other sum payable in respect of an occupational pension scheme;

(g)an amount payable in respect of redundancy payments;

(h)an amount payable under a contract or other instrument involving financial services.

(2)In this section—

• “contract or other instrument involving financial services” has the meaning given by Schedule ZA2 to the 1986 Act, but does not include an agreement which is, or forms part of, an arrangement involving the issue of a capital market investment (see paragraph 6 of that Schedule);

• “floating charge” has the meaning given by section 251 of the 1986 Act or paragraph (1) of Article 5 of the 1989 Order;

• “redundancy payment” means—

  (a)

  a redundancy payment under Part 11 of the Employment Rights Act 1996 or Part 12 of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16)), or

  (b)

  a payment made to a person who agrees to the termination of their employment in circumstances where they would have been entitled to a redundancy payment under that Part if dismissed;

• “wages or salary” includes—

  (a)

  a sum payable in respect of a period of holiday;

  (b)

  a sum payable in respect of a period of absence through illness or other good cause;

  (c)

  a sum payable in lieu of holiday.]

[F177377CApplication for a write-down orderU.K.

(1)An application to the court for a write-down order in relation to an insurer may be made only by—

(a)the Treasury;

(b)the PRA;

(c)the insurer;

(d)a shareholder of the insurer;

(e)a policyholder or other creditor (including a contingent or prospective creditor) of the insurer.

(2)An application for a write-down order may not be withdrawn without the permission of the court.

(3)A person other than the PRA or the Treasury—

(a)must obtain the consent of the PRA before making an application for a write-down order;

(b)must notify the PRA before seeking the court’s permission to withdraw an application for a write-down order.

(4)Consent under subsection (3)—

(a)must be in writing, and

(b)must be filed with the court with the relevant application.

(5)The PRA must consult the FCA before—

(a)making an application for a write-down order, or

(b)giving or refusing consent for a person to make an application for a write-down order.]

[F177377DPowers of the FCA and PRA to participate in proceedingsU.K.

(1)This section applies if an application is made to the court for a write-down order.

(2)The FCA and the PRA are entitled to be heard—

(a)at any hearing relating to the application, and

(b)if an order is made, at any hearing relating to the order.

(3)Any notice or other document required to be sent to a creditor of the insurer—

(a)in relation to the application, or

(b)if an order is made, in relation to the order,

must also be sent to the FCA and the PRA.]

[F177377EPowers of the courtU.K.

On an application for a write-down order, the court may—

(a)if, on hearing the application, it is satisfied of the matters in section 377A(2), make a write-down order in the terms sought, or in such other terms as the court thinks appropriate;

(b)dismiss the application;

(c)adjourn the hearing conditionally or unconditionally;

(d)make any other order which the court thinks appropriate.]

[F177377FDuty to notify creditorsU.K.

(1)This section applies where a write-down order is made in relation to an insurer.

(2)As soon as reasonably practicable after the order is made, the insurer must notify the FCA, the PRA and each affected person that the order has been made.

(3)An “affected person” is a person of a description specified in rules made by the PRA for the purposes of this section.

(4)Notification under this section—

(a)must include such other information as may be specified in rules made by the PRA for the purposes of this section, and

(b)must be given in such form and manner as may be specified in rules made by the PRA for the purposes of this section.

(5)Failure to notify an affected person in accordance with this section, or rules made by the PRA for the purposes of this section, does not affect the validity of the write-down order in relation to that person or any other person.]

[F177377GThe managerU.K.

(1)The court may by order appoint one or more eligible persons to act as the manager of a write-down order (“the manager”).

(2)An order under subsection (1) may—

(a)be made at the same time as the write-down order or at a later date (but see section 377A(3)(a));

(b)appoint a person in addition to or instead of a person who is for the time being appointed;

(c)give such directions about the carrying out of the person’s functions as the manager as the court thinks appropriate.

(3)The court may by order terminate the appointment of a person who is for the time being appointed to act as the manager of a write-down order.

(4)Sections 377C and 377D apply to an application to the court for an order under subsection (1) or (3) as they apply to an application for a write-down order but—

(a)if the application is for the appointment of a person in addition to, or instead of, a person for the time being appointed, section 377C(1) applies as if the persons mentioned included a person for the time being appointed;

(b)section 377C(2) does not apply.

(5)The court may appoint a person to act as the manager of a write-down order only if—

(a)the PRA has provided the court with a statement that the person is suitably qualified, and

(b)the person has provided the court with a statement that the person consents so to act.

(6)Where it is proposed that more than one person should act as the manager, the statement under subsection (5)(b) must specify—

(a)which of the functions of the manager (if any) are to be exercised by the persons acting jointly, and

(b)which of the functions of the manager (if any) are to be exercised by any or all of the persons.

(7)The appointment of a person to act as the manager—

(a)takes effect at the time specified in the order by which the person is appointed, and

(b)ceases to have effect at the time specified in the order by which the person’s appointment is terminated (whether by being replaced by another person or otherwise).

(8)Schedule 19A makes further provision about the manager of a write-down order.]

[F177377HWrite-down order ceasing to have effectU.K.

(1)A reduction in the value of a liability of an insurer under a write-down order ceases to have effect—

(a)on such date as may be specified in the order (and different dates may be specified in relation to different liabilities or liabilities of different types), or

(b)if earlier, or if no such date is specified, the date on which a termination event happens (or, if more than one termination event happens, the earliest of those dates).

(2)In the following table—

(a)the first column specifies each event which is a termination event for the purposes of this section, and

(b)the second column specifies, in relation to each termination event, the date on which the event happens for the purposes of this section.

(3)Where a write-down order is varied, this section applies as if references to the write-down order were to the order as varied.]

[F177377IVariation or revocation of a write-down orderU.K.

(1)The court may, by order—

(a)revoke a write-down order, or

(b)vary (or further vary) a write-down order.

(2)Section 377A(2)(b) applies to the making of an order under this section as it applies to the making of the write-down order.

(3)In varying (or further varying) a write-down order the court may, in particular—

(a)remove one or more of the insurer’s liabilities from the scope of the order (but removing all such liabilities from the scope of the order takes effect as a termination of the order);

(b)bring one or more of the insurer’s liabilities within the scope of the order (on such terms as the court may specify);

(c)further reduce the value of one or more of the insurer’s liabilities;

(d)increase the value of one or more of the insurer’s liabilities to any amount less than the value the liability had before the write-down order took effect;

(e)vary any term specified in the order, including the period for which a reduction in the value of a liability has effect;

(f)make any other order that the court thinks appropriate.

(4)Sections 377C to 377F apply to an application for an order under this section as they apply to an application for a write-down order but with the following modifications—

(a)section 377C(1) applies as if the list of persons entitled to make an application included—

(i)the FCA;

(ii)the scheme manager of the Financial Services Compensation Scheme (see section 212(1));

(iii)a person appointed under section 377G to act as the manager of the write-down order;

(b)if the person making the application is the scheme manager of the Financial Services Compensation Scheme, section 377C(3) does not apply.

(5)The scheme manager of the Financial Services Compensation Scheme must consult the FCA and the PRA before making an application to vary or revoke a write-down order.

(6)Where a provisional liquidator of the insurer has been appointed under section 135 of the 1986 Act or Article 115 of the 1989 Order, a person appointed to act as the manager of a write-down order must obtain the consent of the provisional liquidator before making an application for an order under this section.]

[F177377JFurther provision about write-down ordersU.K.

In Schedule 19B—

(a)Part 1 makes provision about the enforcement of a liability of an insurer while a write-down order has effect;

(b)Part 2 makes provision about the disposal of an insurer’s assets and the making of certain payments by an insurer while a write-down order has effect;

(c)Part 3 makes provision about the treatment of an insurer’s liabilities for the purposes of certain provisions relating to insolvency while a write-down order has effect;

(d)Part 4 makes provision about interest payable in respect of liabilities reduced under a write-down order or prevented from being enforced while a write-down order has effect.]

[F178377KInsurers in financial difficulties: enforcement of contractsU.K.

Schedule 19C makes provision about the enforcement of certain contracts to which an insurer is a party while the insurer is in financial difficulties (within the meaning given by the Schedule).]

378 Treatment of assets on winding up.U.K.

(1)The Treasury may by regulations provide for the treatment of the assets of an insurer on its winding up.

(2)The regulations may, in particular, provide for—

(a)assets representing a particular part of the insurer’s business to be available only for meeting liabilities attributable to that part of the insurer’s business;

(b)separate general meetings of the creditors to be held in respect of liabilities attributable to a particular part of the insurer’s business.

379 Winding-up rules.U.K.

(1)Winding-up rules may include provision—

(a)for determining the amount of the liabilities of an insurer to policyholders of any class or description for the purpose of proof in a winding up; and

(b)generally for carrying into effect the provisions of this Part with respect to the winding up of insurers.

(2)Winding-up rules may, in particular, make provision for all or any of the following matters—

(a)the identification of assets and liabilities;

(b)the apportionment, between assets of different classes or descriptions, of—

(i)the costs, charges and expenses of the winding up; and

(ii)any debts of the insurer of a specified class or description;

(c)the determination of the amount of liabilities of a specified description;

(d)the application of assets for meeting liabilities of a specified description;

(e)the application of assets representing any excess of a specified description.

(3)“Specified” means specified in winding-up rules.

(4)“Winding-up rules” means rules made under section 411 of the 1986 Act (or Article 359 of the 1989 Order).

(5)Nothing in this section affects the power to make winding-up rules under the 1986 Act or the 1989 Order.

[F179Settlement finalityU.K.

379APower to apply settlement finality regime to payment institutionsU.K.

(1)The Treasury may by regulations made by statutory instrument provide for the application to payment institutions, as participants in payment or securities settlement systems, of provision in subordinate legislation—

(a)modifying the law of insolvency or related law in relation to such systems, or

(b)relating to the securing of rights and obligations.

(2)“Payment institution” means—

(a)an authorised payment institution or small payment institution within the meaning of the Payment Services Regulations [F1802017], or

(b)a person whose head office, registered office or place of residence, as the case may be, is outside the United Kingdom and whose functions correspond to those of an institution within paragraph (a).

(3)“Payment or securities settlement system” means arrangements between a number of participants for or in connection with the clearing or execution of instructions by participants relating to any of the following—

(a)the placing of money at the disposal of a recipient;

(b)the assumption or discharge of a payment obligation;

(c)the transfer of the title to, or an interest in, securities.

(4)“Subordinate legislation” has the same meaning as in the Interpretation Act 1978.

(5)Regulations under this section may—

(a)make consequential, supplemental or transitional provision;

(b)amend subordinate legislation.

(6)A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.]