Financial Services and Markets Act 2000

215[F1Rights of the scheme in insolvency]U.K.

[F2(1)The compensation scheme may make provision—

(a)about the effect of a payment of compensation under the scheme on rights or obligations arising out of matters in connection with which the compensation was paid;

(b)giving the scheme manager a right of recovery in respect of those rights or obligations.]

(2)Such a right of recovery conferred by the scheme does not, in the event of [F3a person's insolvency], exceed such right (if any) as the claimant would have had in that event.

[F4(2ZA)The compensation scheme may also make provision in relation to a relevant person, or to a successor of a description falling within section 213(1)(b), who enters into or carries out funeral plan contracts and is unable, or likely to be unable, to satisfy claims made against them—

(a)about rights or obligations in connection with any trust or contract of insurance relating to the funeral plan contracts entered into or carried out by such a person or successor;

(b)about the effect of a payment of compensation, or of a payment in connection with securing continuity of funeral plan contracts under the scheme, on rights and obligations arising out of matters in connection with which the payment was made;

(c)giving the scheme manager a right of recovery in respect of the rights or obligations referred to in paragraphs (a) and (b).

(2ZB)The amount required to be paid to the scheme manager under such a right of recovery conferred by the scheme may not exceed the amount paid or (in the opinion of the scheme manager) to be paid out by the scheme manager in connection with those funeral plan contracts.

(2ZC)For the purposes of subsection (2ZA)(a), the provision that may be made includes—

(a)provision in respect of rights or obligations that came into existence before or after the date on which that subsection comes into force;

(b)provision to vary existing rights or obligations;

(c)provision to create new rights in favour of, or obligations to, the scheme manager which override existing rights or obligations.]

[F5(2A)Any payment made by the scheme manager under section 214B(2) in connection with the exercise of a stabilisation power in respect of a bank, building society or credit union is to be treated as a debt due to the scheme manager from that bank, building society or (as the case may be) credit union.

(2B)In [F6subsection (2A)]—

• “bank” has the meaning given in section 2 of the Banking Act 2009;

• “building society” has the meaning given in the Building Societies Act 1986;

• “credit union” means a credit union within the meaning of—

  (a)

  the Credit Unions Act 1979; or

  (b)

  article 2 of the Credit Unions (Northern Ireland) Order 1985.]

(3)If a person other than the scheme manager [F7makes an administration application under Schedule B1 to the 1986 Act or [F8Schedule B1 to] the 1989 Order] in relation to [F9—

(a)a company or partnership which is a relevant person; or

(b)a body corporate or unincorporated association which is a relevant exchange;

the scheme manager has the same rights as are conferred on the regulators by section 362.]

[F10(3A)In subsection (3) the reference to making an administration application includes a reference to—

(a)appointing an administrator under paragraph 14 or 22 of Schedule B1 to the 1986 Act [F11or paragraph 15 or 23 of Schedule B1 to the 1989 Order], or

(b)filing with the court a copy of notice of intention to appoint an administrator under [F12any] of those paragraphs.]

(4)If a person other than the scheme manager presents a petition for the winding up of a body which is a relevant person [F13or relevant exchange] , the scheme manager has the same rights as are conferred on the [F14regulators] by section 371.

(5)If a person other than the scheme manager presents a bankruptcy petition to the court in relation to an individual who, or an entity which, is a relevant person, the scheme manager has the same rights as are conferred on the [F14regulators] by section 374.

(6)Insolvency rules may be made for the purpose of integrating any procedure for which provision is made as a result of subsection (1) into the general procedure on the administration of a company or partnership or on a winding-up, bankruptcy or sequestration.

(7)“Bankruptcy petition” means 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 [F152 or 5 of the 2016] Act for the sequestration of the estate of an individual; or

(c)under section 6 of the [F162016] 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.

(8)“Insolvency rules” are—

(a)for England and Wales, rules made under sections 411 and 412 of the 1986 Act;

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

(c)for Northern Ireland, rules made under Article 359 of the 1989 Order and section 55 of the M1Judicature (Northern Ireland) Act 1978.

(9)F17... “the 1986 Act”, “the 1989 Order” [F18, “the 2016 Act”] and “court” have the same meaning as in Part XXIV.