The Investment Bank Special Administration (England and Wales) Rules 2011

PART 11Provisions of general effect

CHAPTER 1Miscellaneous and general

Costs, expenses etc

283.—(1) All fees, costs, charges and other expenses incurred in the course of the special administration are, unless otherwise stated, to be regarded as expenses of the special administration.

(2) In a special administration (bank insolvency), paragraph (1) does not include any money paid by the FSCS to eligible depositors in pursuance of Objective A.

(3) The costs associated with the prescribed part shall be paid out of the prescribed part.

Provable debts

284.—(1) Subject as follows, all claims by creditors are provable as debts against the investment bank whether they are present or future, certain or contingent, ascertained or sounding only in damages.

(2) The following are not provable—

(a)any obligation arising under Parts 2, 3 or 4 of the Proceeds of Crime Act 2002(1);

(b)any claim arising by virtue of section 382(1)(a) of the Financial Services and Markets Act 2000, not being a claim also arising by virtue of section 382(1)(b) of that Act; or

(c)any claim which by virtue of the 1986 Act or any other enactment is a claim the payment of which in a special administration is to be postponed.

(3) Claims under paragraphs (2)(b) and (c) are not provable except at a time when all other claims of creditors in the special administration (other than any of a kind mentioned in this paragraph) have been paid in full with interest under rule 168.

(4) Nothing in this rule prejudices any enactment or rule of law under which a particular kind of debt is not provable, whether on grounds of public policy or otherwise.

False claim of status as creditor, etc

285.—(1) This rule applies where the Rules provide a right for—

(a)creditors;

(b)clients;

(c)members of the investment bank; or

(d)contributories,

to inspect any documents, whether on the court’s file or in the hands of the administrator or other person.

(2) It is an offence for a person (‘P’), with the intention of obtaining a sight of documents which P has not under the Rules any right to inspect, falsely to claim a status which would entitle P to inspect them.

(3) A person guilty of an offence under this rule is liable to imprisonment or a fine, or both.

Punishment of offences

286.—(1) The Schedule to these Rules has effect with respect to the way in which contraventions of the Rules are punishable on conviction.

(2) In relation to an offence under a provision of the Rules specified in the first column of the Schedule (the general nature of the offence being described in the second column), the third column shows whether the offence is punishable on conviction on indictment, or on summary conviction, or either in the one way or the other.

(3) The fourth column shows, in relation to an offence, the maximum punishment by way of fine or imprisonment which may be imposed on a person convicted of the offence in the way specified in relation to it in the third column (that is to say, on indictment or summarily), a reference to a period of years or months being to a term of imprisonment of that duration.

(4) The fifth column shows (in relation to an offence for which there is an entry in that column) that a person convicted of the offence after continued contravention is liable to a daily default fine; that is to say, that person is liable on a second or subsequent conviction of the offence to the fine specified in that column for each day on which the contravention is continued (instead of the penalty specified for the offence in the fourth column of the Schedule).

(5) Section 431 of the 1986 Act (summary proceedings), as it is applied by the Regulations, has effect in relation to offences under the Rules as to offences under the 1986 Act.

CHAPTER 2The giving of notice and the supply of documents

Application

287.—(1) Subject to paragraphs (2) and (3), this Chapter applies where a notice or other document is required to be given, delivered or sent under the Regulations or the Rules by any person, including the administrator.

(2) This Chapter does not apply to the service of—

(a)any application to the court;

(b)any evidence in support of that application; or

(c)any order of the court.

(3) This Chapter does not apply to the submission of documents to the registrar of companies.

Personal delivery

288.  Personal delivery of a notice or other document is permissible in any case.

Postal delivery of documents

289.  Unless in any particular case some other form of delivery is required by the Regulations or the Rules or an order of the court, a notice or other document may be sent by post in accordance with the rules for postal service in CPR Part 6 and sending by such means has effect as specified in those rules.

Notice etc to solicitors

290.  Where under the Regulations or the Rules a notice or other document is required or authorised to be given, delivered or sent to a person, it may be given, delivered or sent instead to a solicitor authorised to accept delivery on that person’s behalf.

CHAPTER 3The giving of notice and the supply of documents to or by the administrator

Application

291.—(1) Subject to paragraphs (2) and (3), this Chapter applies where a notice or other document is required to be given, delivered or sent under the Regulations or the Rules.

(2) This Chapter does not apply to the submission of documents to the registrar of companies.

(3) Rules 295 to 298 do not apply to the filing of any notice or other document with the court.

The form

292.  Subject to any order of the court, any notice or other document required to be given, delivered or sent must be in writing and where electronic delivery is permitted a notice or other document in electronic form is treated as being in writing if a copy of it is capable of being produced in a legible form.

Proof of sending

293.—(1) Where a notice or other document is required to be given, delivered or sent by the administrator, the giving, delivering or sending of it may be proved by means of a certificate that the notice or other document was duly given, delivered or sent.

(2) In the case of the administrator the certificate may be given by—

(a)the administrator;

(b)the administrator’s solicitor;

(c)a partner or an employee of either of them.

(3) In the case of a notice or other document to be given, delivered or sent by a person other than the administrator, the giving, delivering or sending of it may be proved by means of a certificate by that person—

(a)that the notice or document was given, delivered or sent by that person; or

(b)that another person (named in the certificate) was instructed to give, deliver or send it.

(4) A certificate under this rule may be endorsed on a copy or specimen of the notice or document to which it relates.

Authentication

294.—(1) A document or information given, delivered or sent in hard copy form is sufficiently authenticated if it is signed by the person sending or supplying it.

(2) A document or information given, delivered or sent in electronic form is sufficiently authenticated—

(a)if the identity of the sender is confirmed in a manner specified by the recipient; or

(b)where no such manner has been specified by the recipient, if the communication contains or is accompanied by a statement of the identity of the sender and the recipient has no reason to doubt the truth of that statement.

Electronic delivery - general

295.—(1) Unless in any particular case some other form of delivery is required by the Regulations or the Rules or an order of the court and subject to paragraph (3), a notice or other document may be given, delivered or sent by electronic means provided that the intended recipient of the notice or other document has—

(a)consented (whether in the specific case or generally) to electronic delivery (and has not revoked that consent); and

(b)provided an electronic address for delivery.

(2) In the absence of evidence to the contrary, a notice or other document is presumed to have been delivered where—

(a)the sender can produce a copy of the electronic message which—

(i)contained the notice or other document, or to which the notice or other document was attached, and

(ii)shows the time and date the message was sent; and

(b)that electronic message contains the address supplied under paragraph (1)(b).

(3) A message sent electronically is deemed to have been delivered to the recipient no later than 9.00am on the next business day after it was sent.

(4) Paragraph (3) does not apply in respect of documents sent electronically under Part 2.

Electronic delivery by administrator

296.—(1) Where the administrator gives, sends or delivers a notice or other document to any person by electronic means, the notice or document must contain or be accompanied by a statement that the recipient may request a hard copy of the notice or document and specifying a telephone number, e-mail address and postal address which may be used to request a hard copy.

(2) Where a hard copy of the notice or other document is requested, it must be sent within 5 business days of receipt of the request by the administrator.

(3) The administrator must not require a person making a request under paragraph (2) to pay a fee for the supply of the document.

Use of websites by administrator

297.—(1) This rule applies for the purposes of section 246B(2).

(2) Where the administrator is required to give, deliver or send a document to any person (other than in a case where personal service is required), the administrator may satisfy that requirement by sending that person a notice—

(a)stating that the document is available for viewing and downloading on a website;

(b)specifying the address of that website together with any password necessary to view and download the document from that site; and

(c)containing a statement that the person to whom the notice is given, delivered or sent may request a hard copy of the document and specifying a telephone number, e-mail address and postal address which may be used to request a hard copy.

(3) Where a notice to which this rule applies is sent, the document to which it relates must—

(a)be available on the website for a period of not less than 3 months after the date on which the notice is sent; and

(b)must be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded.

(4) Where a hard copy of the document is requested it must be sent within 5 business days of the receipt of the request by the administrator.

(5) The administrator must not require a person making a request under paragraph (4) to pay a fee for the supply of the document.

(6) Where a document is given, delivered or sent to a person by means of a website in accordance with this rule, it is deemed to have been delivered—

(a)when the document was first made available on the website, or

(b)if later, when the notice under paragraph (2) was delivered to that person.

Special provision on account of expense as to website use

298.—(1) Where the court is satisfied that the expense of sending notices in accordance with rule 292 would, on account of the number of persons entitled to receive them, be disproportionate to the benefit of sending notices in accordance with that rule, it may order that the requirement to give, deliver or send a relevant document to any person may (other than in a case where personal service is required) be satisfied by the administrator sending each of those persons a notice—

(a)stating that all relevant documents will be made available for viewing and downloading on a website;

(b)specifying the address of that website together with any password necessary to view and download a relevant document from that site; and

(c)containing a statement that the person to whom the notice is given, delivered or sent may at any time request that hard copies of all, or specific, relevant documents are sent to that person, and specifying a telephone number, e-mail address and postal address which may be used to make that request.

(2) A document to which this rule relates must—

(a)be available on the website for a period of not less than 12 months from the date when it was first made available on the website or, if later, from the date upon which the notice was sent; and

(b)must be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded.

(3) Where hard copies of relevant documents have been requested, they must be sent by the administrator—

(a)within 5 business days of the receipt by the administrator of the request to be sent hard copies, in the case of relevant documents first appearing on the website before the request was received, or

(b)within 5 business days from the date a relevant document first appears on the website, in all other cases.

(4) The administrator must not require a person making a request under paragraph (3) to pay a fee for the supply of the document.

(5) Where a relevant document is given, delivered or sent to a person by means of a website in accordance with this rule, it is deemed to have been delivered—

(a)when the relevant document was first made available on the website, or

(b)if later, when the notice under paragraph (1) was delivered to that person.

(6) In this rule, a relevant document means any document which the administrator is first required to give, deliver or send to any person after the court has made an order under paragraph (1).

Electronic delivery of special administration documents to court

299.—(1) Except where paragraph (2) applies or the requirements of paragraph (3) are met, no application, notice or other document may be delivered or made to a court by electronic means.

(2) This paragraph applies where electronic delivery of documents to a court is permitted by another rule.

(3) The requirements of this paragraph are—

(a)the court provides an electronic working scheme for the proceedings to which the document relates; and

(b)the electronic communication is—

(i)delivered and authenticated in a form which complies with the requirements of the scheme;

(ii)sent to the electronic address provided by the court for electronic delivery of those proceedings; and

(iii)accompanied by any payment due to the court in respect of those proceedings made in a manner which complies with the requirements of the scheme.

(4) In this rule “an electronic working scheme” means a scheme set out in a practice direction permitting insolvency proceedings to be delivered electronically to the court.

(5) Under paragraph (3) an electronic communication is to be treated as delivered to the court at the time it is recorded by the court as having been received.

Notice etc to joint administrators

300.  Where there are joint office-holders in a special administration, delivery of a document to one of them is to be treated as delivery to all of them.

Execution overtaken by judgment debtor’s insolvency

301.—(1) This rule applies where execution has been taken out against property of a judgment debtor, and notice is given to the enforcement officer or other officer charged with the execution that the judgment debtor has entered special administration.

(2) Subject to rule 302, the notice must be delivered to the office of the enforcement officer or of the officer charged with the execution—

(a)by hand, or

(b)by any other means of delivery which enables proof of receipt of the document at the relevant address.

Notice to enforcement officers

302.—(1) This rule applies in relation to any provision of the Regulations or the Rules which makes provision for the giving of notice to an enforcement officer.

(2) Any such notice as is mentioned in paragraph (1) may be given by electronic means to any person who has been authorised to receive such notice on behalf of a specified enforcement officer or on behalf of enforcement officers generally.

Electronic submission of information

303.—(1) This rule applies in any case where prescribed information is required by the Rules to be sent by any person to the Secretary of State, the Chief Land Registrar or the administrator.

(2) A requirement of the kind mentioned in paragraph (1) is treated as having been satisfied where—

(a)the information is submitted electronically with the agreement of the person to whom the information is sent;

(b)the form in which the electronic submission is made satisfies the requirements of the person to whom the information is sent;

(c)that all the prescribed information is provided in the electronic submission; and

(d)the person to whom the information is sent can provide in legible form the information so submitted.

(3) Where prescribed information is permitted to be sent electronically under paragraph (2), any requirement that the information be accompanied by a signature is taken to be satisfied—

(a)if the identity of the person who is supplying the information and whose signature is required is confirmed in a manner specified by the recipient; or

(b)where no such manner has been specified by the recipient, if the communication contains or is accompanied by a statement of the identity of the person who is providing the information, and the recipient has no reason to doubt the truth of that statement.

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

Electronic submission of information where rule 303 does not apply

304.—(1) This rule applies in any case where rule 303 does not apply, where prescribed information is required by the Rules to be sent by any person.

(2) A requirement of the kind mentioned in paragraph (1) is treated as having been satisfied where—

(a)the person to whom the information is sent has agreed—

(i)to receiving the information electronically and to the form in which it is to be sent, and

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

(b)all the prescribed information required is provided in the electronic submission; and

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

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

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

Contents of notices to be gazetted

305.—(1) Where under the Regulations or the Rules a notice is gazetted, in addition to any content specifically required by the Regulations or any other provision of the Rules, the content of such a notice must be as set out in this Chapter.

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

(a)a statement that the proceedings are being held in the High Court and the court reference number;

(b)the name, postal address and date of appointment of the administrator;

(c)either an e-mail address, or a telephone number, through which the administrator may be contacted;

(d)the name of any person other than the administrator (if any) who may be contacted regarding the proceedings; and

(e)the number assigned to the office-holder by the Secretary of State.

Gazette notices relating to companies

306.  In addition to the information required by rule 305 a notice relating to an investment bank that is a company must specify—

(a)the registered name of the company;

(b)its registered number;

(c)its registered office;

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

(e)any name under which it was registered in the 12 months prior to the date the investment bank entered special administration; and

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

(i)the investment bank carried on business;

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

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

Omission of unobtainable information

307.  Information required under this Chapter to be included in a notice to be gazetted may be omitted if it is not reasonably practicable to obtain it.

The Gazette – general

308.—(1) A copy of the Gazette containing any notice required by the Regulations or the Rules to be gazetted is evidence of any facts stated in the notice.

(2) In the case of an order of the court notice of which is required by the Regulations or the Rules to be gazetted, a copy of the Gazette containing the notice may in any proceedings be produced as conclusive evidence that the order was made on the date specified in the notice.

(3) Where an order of the court which is gazetted has been varied, and where any matter has been erroneously or inaccurately gazetted, the person whose responsibility it was to procure the requisite entry in the Gazette must as soon as is reasonably practicable cause the variation of the order to be gazetted or a further entry to be made in the Gazette for the purpose of correcting the error or inaccuracy.

Notices otherwise advertised under the Regulations or Rules

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

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

(a)the name and postal business address of the administrator acting in the special administration to which the notice relates; and

(b)either an e-mail address, or a telephone number, through which the administrator may be contacted.

Non-Gazette notices

310.  In addition to the information required by rule 309, a notice relating to an investment bank must state—

(a)the registered name of the investment bank;

(b)its registered number;

(c)any name under which it was registered in the 12 months prior to the date the investment bank entered special administration; and

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

(i)the investment bank carried on business,

(ii)any asset was given to the investment bank to be held for a client, or

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

Non-Gazette notices – other provisions

311.—(1) The information required to be contained in a notice to which rules 309 and 310 apply must be included in the advertisement of that notice in a manner that is reasonably likely to ensure, in relation to the form of the advertising used, that a person reading, hearing or seeing the advertisement, will be able to read, hear or see that information.

(2) Information required under this Chapter to be included in a notice may be omitted if it is not reasonably practicable to obtain it.

CHAPTER 4Notifications to the registrar of companies

Application of Chapter 4

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

Information to be contained in all notifications to the registrar

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

(a)the registered name of the investment bank;

(b)its registered number;

(c)the nature of the notification;

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

(e)the date of the notification;

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

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

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

Notification relating to the administrator

314.  In addition to the information required by rule 313, a notification relating to the office of the administrator must also specify—

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

(b)the date of the event notified;

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

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

Notifications relating to documents

315.  In addition to the information required by rule 313, a notification relating to a document (for example, a statement of affairs) must also specify—

(a)the nature of the document; and

(b)the date of the document; or

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

Notifications relating to court orders

316.  In addition to the information required by rule 313, a notification relating to a court order must also specify—

(a)the nature of the court order; and

(b)the date of the order.

Notifications relating to other events

317.  In addition to the information required by rule 313, a notification relating to any other event (for example the coming into force of a moratorium) must specify—

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

(b)the date the event occurred.

Notifications of more than one nature

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

Notifications made to other persons at the same time

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

(2) Paragraph (1) does not apply—

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

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

CHAPTER 5Further provisions concerning documents

Confidentiality of documents – grounds for refusing inspection

320.—(1) Where the administrator considers that a document forming part of the records of the special administration—

(a)should be treated as confidential, or

(b)is of such a nature that its disclosure would be prejudicial to the conduct of the special administration or might reasonably be expected to lead to violence against any person,

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

(2) The persons to whom the administrator may under this rule refuse inspection include members of the Objective A committee or the creditors’ committee.

(3) Where under this rule the administrator determines to refuse inspection of a document, the person wishing to inspect it may apply to the court for that determination to be overruled and the court may either overrule it altogether or sustain it subject to such conditions (if any) as it thinks just.

Right to copy documents

321.—(1) Where the Regulations or the Rules confer a right for any person to inspect documents, the right includes that of taking copies of those documents, on payment—

(a)in the case of documents on the court’s file of proceedings, of the fee chargeable under any order made under section 92 of the Courts Act 2003(3); and

(b)in any other case, of the appropriate fee.

Charges for copy documents

322.  Except where prohibited by the Rules, the administrator is entitled to require the payment of the appropriate fee for the supply of documents requested by a creditor, client, member, contributory or member of the creditors’ committee.

Right to have list of creditors

323.—(1) A creditor has the right to require the administrator to provide a list of the creditors and the amounts of their respective debts unless paragraph (5) applies.

(2) The administrator on being required to furnish the list under paragraph (1)—

(a)as soon as reasonably practicable must send it to the person requiring the list to be furnished; and

(b)may charge the appropriate fee for doing so.

(3) The name and address of any creditor may be omitted from the list furnished under paragraph (2) where the administrator is of the view that its disclosure would be prejudicial to the conduct of the proceedings or might reasonably be expected to lead to violence against any person provided that—

(a)the amount of the debt in question is shown in the list; and

(b)a statement is included in the list that the name and address of the creditor has been omitted in respect of that debt.

(4) In a special administration (bank insolvency) or a special administration (bank administration), the list of creditors provided under paragraph (1) shall, in respect of creditors who are depositors, omit the names and addresses of individual depositors and shall contain a single statement of their aggregate debt.

(5) Paragraph (1) does not apply where a statement of affairs has been delivered to the registrar of companies.

CHAPTER 6Time limits and security

Time limits

324.—(1) The provisions of CPR rule 2.8(4) (time) apply, as regards computation of time, to anything required or authorised to be done by the Rules.

(2) The provisions of CPR rule 3.1(2)(a) (the court’s general powers of management) apply so as to enable the court to extend or shorten the time for compliance with anything required or authorised to be done by the Rules.

Administrator’s security

325.—(1) Wherever under the Rules any person has to appoint, or certify the appointment of an administrator, that person must, before making or certifying the appointment, be satisfied that the person appointed or to be appointed has security for the proper performance of that office.

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

(3) In a special administration (bank insolvency), before the Objective A committee have passed a full payment resolution, that committee shall have the duty in paragraph (2).

(4) In a special administration (bank administration), before the Bank of England has given a Objective A Achievement Notice, the Bank of England shall have that duty.

(5) The cost of the administrator’s security shall be defrayed as an expense of the proceedings.

CHAPTER 7Transfer of proceedings

Proceedings commenced in the wrong court

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

Proceedings other than special administration commenced

327.—(1) Where—

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

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

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

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

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

(4) Without prejudice to the generality of the court’s power in paragraph (2), where the person (“P”) appointed as office-holder under the original proceedings is not the same person as the administrator of the special administration, the court may direct that—

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

(b)P hand over—

(i)the records of the original proceedings, including correspondence, proofs and other related papers appertaining to those proceedings while they were within P’s responsibility; and

(ii)the investment bank’s books, papers and other records; and

(c)P hand over all the assets of the investment bank and the client assets held by the investment bank in P’s possession.

(5) In this rule—

“the Authority” means—

“office-holder” means provisional liquidator, liquidator or administrator as the case may be; and

“original proceedings” means the proceedings following the making of the winding up order, the administration order or the resolution referred to in paragraph (1).