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

• Citation: S.I. 2011/1301
• Sections: 334

Section 1 Citation

These Rules may be cited as the Investment Bank Special Administration (England and Wales) Rules 2011.

Section 2 Commencement

These Rules come into force on 30th June 2011.

Section 3 Extent

These Rules extend to England and Wales only.

Section 4 Interpretation

(1) In these Rules—

“the 1986 Act” means the Insolvency Act 1986;

“the 2006 Act” means the Companies Act 2006 ;

“the 2009 Act” means the Banking Act 2009 ;

“ business address ” means the place where a person works;

“ business day ” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of England and Wales under or by virtue of the Banking and Financial Dealings Act 1971 ;

“ certificate of service ” means a certificate of service verified by a statement of truth;

“CPR” means the Civil Procedure Rules 1998 and “CPR” followed by a Part or a rule number means the Part or rule with that number in those rules;

“ file in court and file with the court ” means deliver to the court for filing;

“ financial contract ” means a bilateral or multilateral contract entered into with the investment bank before it entered special administration, relating to transactions or positions of a financial nature, including contracts for the delivery or custody of client assets (but not including contracts which are purely administrative or contracts for services);

“ the Gazette ” means the London Gazette;

“ gazetted ” means advertised once in the Gazette;

“ investment bank ” has the meaning set out in section 232 of the 2009 Act ;

“ market price ” has the meaning set out in regulation 12(9);

“ means of contacting ” means being able to contact that person specifically;

“person connected with the investment bank” has the same meaning in respect of the investment bank as a person connected with a company in accordance with section 249 of the 1986 Act;

“ practice direction ” means a direction as to the practice and procedure of any court within the scope of the CPR;

“ prescribed order of priority ” means the order of priority of payments laid down by rule 134;

“ prescribed part ” has the same meaning as it does in section 176A(2)(a) of the 1986 Act and the Insolvency Act 1986 (Prescribed Part) Order 2003 ;

“registered number” of the investment bank has the meaning set out in section 1066 of the 2006 Act;

“ registrar of companies ” means the registrar of companies for England and Wales;

“the Regulations” means the Investment Bank Special Administration Regulations 2011;

“ resolution fund order ” has the meaning set out in section 49(3) of the 2009 Act;

“ special administration ” means, unless otherwise stated, special administration, special administration (bank insolvency) or special administration (bank administration) as the case may be;

“ standard contents ” means—

in relation to a notice to be gazetted, the contents specified in rules 305 and 306; and

in relation to a notice to be advertised in any other way, the contents specified in rules 309 and 310;

“ statement of truth ” means a statement of truth in accordance with CPR Part 22; and

“ witness statement ” means a witness statement verified by a statement of truth in accordance with CPR Part 22.

(2) A fee or remuneration is charged when the work to which it relates is done.

(3) Expressions used both in these Rules and in the Regulations (including expressions used in the provisions of the 1986 Act applied by the Regulations) have, unless otherwise stated, the meaning set out in the Regulations.

(4) A reference to a numbered paragraph in these Rules shall, unless—

(a) it is a reference to a paragraph within the same rule; or

(b) otherwise stated,

be to the paragraph so numbered in Schedule B1 to the 1986 Act , as applied by regulation 15.

(5) A reference to a provision of the 1986 Act, if that provision is listed in Table 1 or 2 in regulation 15, is, unless otherwise stated and subject to paragraph (5), a reference to that provision as applied by regulation 15.

(6) A reference to a provision of the 1986 Act being applied by regulation 15 in a special administration (bank administration), means that provision as applied by section 145 of the 2009 Act, together with the modifications (if any) set out in the table in paragraph 6 of Schedule 2 to the Regulations.

(7) A reference to a numbered regulation shall, unless otherwise stated, be to the regulation so numbered in the Regulations.

Section 5 Application of rules

(1) The rules apply as follows—

(a) Part 2, Chapter 1 applies where an application is made for a special administration order;

(b) Part 2, Chapter 2 applies where an application is made for a special administration (bank insolvency) order; and

(c) Part 2, Chapter 3 applies where an application is made for a special administration (bank administration) order.

(2) Unless otherwise stated, the remaining rules apply in respect of special administration, special administration (bank insolvency) and special administration (bank administration).

Section 6 Content of application

(1) An application for a special administration order must be made in writing and signed by the applicant.

(2) The application must state—

(a) the full name and registered number of the investment bank;

(b) any other trading names;

(c) the investment bank’s date of incorporation;

(d) the investment bank’s nominated capital and the amount of capital paid up;

(e) the address of the investment bank’s registered office;

(f) an email address for the investment bank;

(g) the identity of the person (or persons) nominated for appointment as administrator; and

(h) a statement setting out which of the grounds in regulation 6(1) the applicant is relying on in making the application.

Section 7 Statement of proposed administrator

An application for a special administration order must be accompanied by a statement by the proposed administrator—

(a) specifying the name and business address of the person (or each person) proposed to be appointed;

(b) giving that person’s (or each person’s) consent to act;

(c) giving details of the person’s (or each person’s) qualification to act as an insolvency practitioner; and

(d) giving details of any prior professional relationship that the person (or any of them) has had with the investment bank.

Section 8 Witness statement in support of application

(1) An application for a special administration order must be accompanied by a witness statement.

(2) If the application is made by—

(a) the investment bank or one of its directors, the witness statement shall be made by one of its directors or the company secretary of the investment bank, stating that they make it on behalf of the investment bank or, as the case may be, on behalf of the directors;

(b) a creditor or a contributory of the investment bank, the witness statement shall be made by a person acting under the authority of all the creditors, or, as the case may be, all the contributories, making the application;

(c) the FSA, the witness statement must identify the person making the statement and must include the capacity in which that person makes the statement and the basis for that person’s knowledge of the matters set out in the statement; or

(d) a combination of the persons listed in regulation 5(1)(a) to (e), the witness statement shall be made by a person acting under the authority of all the applicants.

(3) The witness statement shall—

(a) set out the reasons by which the applicant believes the ground in regulation 6 on which the application is based is satisfied;

(b) state the investment bank’s current financial position, specifying (to the best of the applicant’s knowledge and belief) the investment bank’s assets and liabilities, including contingent and prospective liabilities;

(c) specify any security known or believed to be held by the creditors of the investment bank;

(d) specify the amount of client assets held by the investment bank to the best of the applicant’s knowledge and belief;

(e) specify how functions are going to be allocated where more than one person is to be appointed as administrator (stating in particular whether functions are to be exercisable jointly or by any or all of the persons appointed); and

(f) specify any other matters which the applicant thinks will assist the court in deciding whether to make the special administration order.

Section 9 Filing of application

(1) The application and its accompanying documents must be filed in court together with enough copies of the application and accompanying documents for service and proof of service under rule 10.

(2) The court shall fix a venue for the hearing of the application.

(3) In fixing the venue the court shall have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable; and

(b) the need for the investment bank’s representatives to be able to reach the venue in time for the hearing.

(4) Each of the copies filed—

(a) shall have the seal of the court applied to it;

(b) shall be endorsed with the date and time of filing;

(c) shall be endorsed with the venue for the hearing of the application.

Section 10 Service of application

(1) The application shall be served on—

(a) the investment bank (if neither the investment bank nor its directors are the applicant);

(b) the person (or each of the persons) nominated for appointment as administrator;

(c) any person who has given notice to the FSA in respect of the investment bank under regulation 8;

(d) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement.

(2) Service under paragraph (1) must be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 9.

(3) Service of the application must be effected by the applicant, or their solicitor, or by a person instructed by the applicant or the solicitor, as soon as reasonably practicable before the hearing.

(4) Service shall be effected as follows—

(a) on the investment bank (subject to paragraph (5)), by delivering the documents to its registered office; and

(b) on any other person (subject to paragraph (6)) by delivering the documents to that person’s proper address.

(5) If delivery to the investment bank’s registered office is not practicable, service may be effected by delivery to its last known principal place of business in England and Wales.

(6) For the purposes of paragraph (4)(b), a person’s proper address is any which that person has previously notified to the applicant as their address for service, but if no address has been notified, service may be effected by delivery to that person’s usual or last known address.

(7) Delivery of documents to any place or address may be made by leaving them there or by electronic delivery in accordance with rule 295 (and where the document is sent electronically, it shall be sent with a read receipt and the message shall be deemed to be delivered when the message is read).

Section 11 Proof of service

(1) Service of the application shall be verified by a witness statement specifying the date and time on which, and the manner in which, service was effected.

(2) The witness statement, with a sealed copy of the application exhibited to it, shall be filed with the court—

(a) as soon as is reasonably practicable; and

(b) in any event, before the hearing of the application.

Section 12 Further notification

As soon as reasonably practicable after filing the application, the applicant must notify—

(a) any enforcement officer or other officer whom the applicant knows to be charged with effecting an execution or other legal process against the investment bank or its property;

(b) any person whom the applicant knows to have distrained against the investment bank or its property; and

(c) (if not the applicant) the FSA.

Section 13 The hearing

At the hearing of the application, any of the following may appear or be represented—

(a) the applicant;

(b) the investment bank;

(c) one or more of the directors;

(d) the person (or a person) nominated for appointment as administrator;

(e) any supervisor of a voluntary arrangement under Part 1 of the 1986 Act;

(f) any person who has given notice to the FSA in respect of the investment bank under regulation 8;

(g) the FSA; and

(h) with the permission of the court, any other person who appears to have an interest.

Section 14 The special administration order

If the court makes a special administration order, the order shall state—

(a) the name and address of the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(c) details of any other parties appearing at the hearing;

(d) the name of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Section 15 Costs

If the court makes a special administration order, the following are payable as an expense of the special administration—

(a) costs of the applicant; and

(b) any other costs allowed by the court.

Section 16 Notice of special administration order

(1) If the court makes a special administration order, it shall, as soon as reasonably practicable, send 3 sealed copies to the applicant.

(2) The applicant shall as soon as reasonably practicable, send a sealed copy to—

(a) the administrator; and

(b) the FSA (if not the applicant).

(3) If the court makes an order under regulation 7(1)(d), or any other order under regulation 7(1)(f), it shall give directions as to the persons to whom and how notice of that order is to be given.

Section 17 Filing of application

(1) The application for a special administration (bank insolvency) order, verified by witness statement in accordance with rule 21, shall be filed in court.

(2) There shall be filed with the application—

(a) a copy for service on the investment bank;

(b) a copy to be attached to the proof of service; and

(c) further copies to be sent to the persons under rule 20.

(3) The court shall fix the venue, date and time for the hearing of the application and in doing so shall have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable; and

(b) the need to give the investment bank a reasonable opportunity to attend.

(4) Each of the copies issued to the applicant shall be sealed and be endorsed with the venue, date and time for the hearing.

(5) Any application filed in relation to an investment bank in respect of which there is in force a voluntary arrangement under Part 1 of the 1986 Act shall be filed in accordance with this rule, but a copy of that application shall also be sent to the court to which the nominee’s report was submitted, if that is not the same court.

Section 18 Service of application

(1) The applicant shall serve the investment bank with a sealed copy of the application.

(2) The application shall be served on the investment bank by personal service at its registered office.

(3) In paragraph (2), “ registered office ” means—

(a) the place which is specified, in the investment bank’s statement delivered under section 9 of the 2006 Act as the intended situation of its registered office on incorporation; or

(b) if notice has been given by the investment bank to the registrar of companies under section 87 of the 2006 Act, the place specified in that notice or, as the case may be, in the last such notice.

(4) Service of the application at the registered office may be effected in any of the following ways—

(a) it may be handed to a person who there and then acknowledges that they are, or to the best of the server’s knowledge, information and belief are, a director or other officer, or employee, of the investment bank; or

(b) it may be handed to a person who there and then acknowledges that they are authorised to accept service of documents on the investment bank’s behalf; or

(c) in the absence of such person as is mentioned in sub-paragraphs (a) and (b), it may be deposited at or about the registered office in such a way that it is likely to come to the notice of a person attending the office.

(5) If for any reason it is impracticable to effect service as provided by paragraph (2) or (4), the application may be served in such other manner as the court may approve or direct.

(6) Application for permission of the court under paragraph (5) may be made without notice to the investment bank, stating in a witness statement what steps have been taken to comply with paragraph (2) or (4), and the reasons why it is impracticable to effect service as there provided.

(7) If the investment bank or its legal representatives fail to attend the hearing, the court may make the bank insolvency order in its absence if satisfied that the application has been served in accordance with this rule.

Section 19 Proof of service

(1) Service of the application must be proved by a certificate of service.

(2) The certificate of service must be sufficient to identify the application served and must specify—

(a) the name and registered number of the investment bank;

(b) the address of the registered office of the investment bank;

(c) whether the applicant is the Bank of England or the FSA;

(d) the address of the Bank of England;

(e) whether the copy served was a sealed copy;

(f) the date on which service was effected; and

(g) the manner in which service was effected.

(3) Where substituted service has been ordered under rule 18(5), the certificate of service must have attached to it a sealed copy of the order.

(4) The certificate of service must be filed in court as soon as reasonably practicable after service.

Section 20 Other persons to receive copy of application

(1) The applicant shall send 2 sealed copies of the application to—

(a) the proposed administrator;

(b) the Bank of England, (if not the applicant);

(c) the FSA, (if not the applicant);

(d) the FSCS;

(e) any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act; and

(f) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (2).

(2) One copy shall be sent electronically as soon as practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the application is served on the investment bank.

(3) Any of the persons in paragraph (1) will have the right to attend and be heard at the hearing of the application.

Section 21 Verification of application

(1) This rule applies where an application has been filed at the court under rule 17 above.

(2) A witness statement shall be attached to the application to state that the statements in the application are true, or are true to the best of the applicant’s knowledge, information and belief.

(3) The witness statement shall identify the person making the statement and shall include the capacity in which that person makes the statement and the basis for that person’s knowledge of the matters set out in the application.

Section 22 Persons entitled to copy of application

(1) Every contributory or creditor or client of the investment bank is entitled to a copy of the application on request from the applicant.

(2) The applicant shall respond to any request for a copy of the application as soon as reasonably practicable after the application has been made on payment of the appropriate fee.

Section 23 Certificate of compliance

(1) The applicant or the applicant’s solicitor shall, as soon as reasonably practicable before the hearing of the application, file in court a certificate of compliance with the rules relating to service.

(2) The certificate shall show—

(a) the date of the application;

(b) the date fixed for the hearing; and

(c) the date or dates when the application was served and that notice of it was given in compliance with the Rules.

(3) A witness statement made by the proposed administrator to the effect that—

(a) the person is qualified to act as an insolvency practitioner in accordance with section 390 of the 1986 Act ; and

(b) the person consents to act as the administrator,

shall be filed in court with the certificate.

Section 24 Leave for the applicant to withdraw

(1) The applicant may withdraw the application for a special administration (bank insolvency) order at any time before the hearing with the permission of the court.

(2) An application for permission under paragraph (1) may be made without notice.

(3) The court may grant permission on such terms as the court thinks fit.

Section 25 Witness statement in opposition

(1) If the investment bank intends to oppose an application, it may (but need not) file a witness statement in opposition in court.

(2) A statement under paragraph (1) must be filed before the hearing of the application and a copy must be served on the applicant, before the hearing.

(3) The statement may be served on the applicant by personal service or by electronic means.

(4) The statement should also be sent to the persons in rule 20(1) before the hearing by personal service or by electronic means.

(5) The fact that the investment bank has not filed a statement under this rule shall not prevent it being heard at the hearing.

Section 26 Making, transmission and advertisement of order

(1) The court shall not make a special administration (bank insolvency) order unless the person nominated to be appointed as the administrator in the application for the order has filed in court a witness statement under rule 23.

(2) When the order has been made, the court shall immediately send 5 sealed copies (or such larger number as the administrator may have requested) to the administrator.

(3) The court shall also, if practicable, immediately send a copy of the order to the administrator electronically.

(4) The administrator shall serve a sealed copy of the order on the investment bank at its registered office and, where the bank liquidator knows the investment bank’s email address, will send an electronic copy to the investment bank.

(5) The administrator shall send 2 copies of the order—

(a) to the Bank of England, the FSA and the FSCS; and

(b) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as reasonably practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the order is served on the investment bank.

Section 27 Special administration (bank insolvency) order

If the court makes a special administration (bank insolvency) order, the order shall state—

(a) the name and address of the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(c) details of any other parties appearing at the hearing;

(d) the name and business address of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Section 28 Authentication of administrator’s appointment

A sealed copy of the court’s order may in any proceedings be adduced as proof that the person appointed is duly authorised to exercise the powers and perform the duties of the administrator in the special administration (bank insolvency).

Section 29 Duties of Objective A committee

(1) This rule applies where a special administration (bank insolvency) order has been made.

(2) As soon as reasonably practicable after the making of a special administration (bank insolvency) order, the Objective A committee shall meet the administrator for the purpose of discussing which of the objectives, or combination of objectives, mentioned in section 102(1) of the 2009 Act (as applied by paragraph 6 of Schedule 1 to the Regulations), the committee should recommend the administrator to pursue.

(3) If the administrator and every individual on the Objective A committee agree, the meeting may be held by audio or video conference.

(4) The Objective A committee shall make its recommendation to the administrator at the meeting.

(5) The Bank of England shall confirm the Objective A committee’s recommendation in writing as soon as practicable after the meeting.

(6) As soon as practicable after the making of a special administration (bank insolvency) order, the Objective A committee shall also pass a resolution as to the terms on which, in accordance with rule 196, the administrator is to be remunerated in respect of—

(a) work done by the administrator in pursuit of Objective A; and

(b) work done by the administrator in pursuit of Objectives 2 and 3 of the special administration objectives.

(7) The Objective A committee—

(a) shall take decisions and pass resolutions by a simple majority; and

(b) for the purpose of taking decisions and passing resolutions, may communicate by any means that its members consider convenient.

Section 30 Appointment of person under section 135

(1) An application to the court for the appointment of a person under section 135 of the 1986 Act (as applied by paragraph 8 of Schedule 1 to the Regulations) may be made—

(a) by the Bank of England; or

(b) by the FSA (with the consent of the Bank of England).

(2) The application must be supported by a witness statement stating—

(a) the grounds upon which it is proposed that the person should be appointed;

(b) that the person to be appointed has consented to act;

(c) that the person to be appointed is qualified to act as an insolvency practitioner;

(d) whether to the applicant’s knowledge there has been proposed or is in force for the investment bank a company voluntary arrangement under Part 1 of the 1986 Act;

(e) the applicant’s estimate of the value of the assets in respect of which the person is to be appointed; and

(f) the functions the applicant wishes to be carried out by the person appointed under this rule in relation to the investment bank’s affairs.

(3) The court may on the application, if satisfied that an application has been made for a special administration (bank insolvency) order and that sufficient grounds are shown for the appointment, make it on such terms as it thinks fit.

Section 31 Notice of appointment

(1) Where a person has been appointed under rule 30, the court shall notify the applicant and the person appointed.

(2) Unless the court otherwise directs, on receipt of the notification under paragraph (1) the person appointed shall give notice of that appointment as soon as reasonably practicable. Such notice—

(a) shall be gazetted; and

(b) may be advertised in such other manner as the person appointed thinks fit.

Section 32 Order of appointment

(1) The order of appointment shall specify the functions to be carried out by the person appointed under rule 30 in relation to the investment bank’s affairs.

(2) The court shall, immediately after the order is made, send 4 sealed copies of the order (or such larger number as the person appointed may have requested), to the person appointed.

(3) The court shall also, if practicable, immediately send a copy of the order to the person appointed electronically.

(4) The person appointed shall serve a sealed copy of the order on the investment bank at its registered office and, where they know the investment bank’s email address, will send an electronic copy to the investment bank.

(5) The person appointed shall send 2 copies of the order—

(a) to the Bank of England, the FSA, and the FSCS; and

(b) if there is in force for the investment bank a voluntary arrangement under Part 1 of the 1986 Act, the supervisor of that arrangement,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as reasonably practicable and the other (a sealed copy) shall be sent by first class post of the business day on which the order is served on the investment bank.

(7) The person appointed shall also send notice of the appointment to the registrar of companies.

Section 33 Security

(1) The following applies where a person is appointed under rule 30.

(2) The cost of providing the security required by the 1986 Act shall be paid in the first instance by the person so appointed; but—

(a) if the special administration (bank insolvency) order is not made, the person so appointed is entitled to be reimbursed out of the estate of the investment bank, and the court may make an order on the investment bank accordingly; and

(b) if the special administration (bank insolvency) order is made, the person so appointed is entitled to be reimbursed as an expense of the administration in the prescribed order of priority.

Section 34 Failure to give or keep up security

(1) If the person appointed under rule 30 fails to give or keep up their security, that person may be removed by the court and the court make such order as it thinks just as to costs.

(2) If an order is made under this rule, the court shall give directions as to the steps to be taken for the appointment of another person under rule 30.

(3) Where another person is appointed under rule 30, that person shall send notice of their appointment to the registrar of companies.

Section 35 Remuneration

(1) The remuneration of the person appointed under rule 30 shall be fixed by the court from time to time on that person’s application.

(2) In fixing the remuneration, the court shall take into account—

(a) the time properly given by the person appointed;

(b) the complexity (or otherwise) of the case;

(c) any respects in which, in connection with the investment bank’s affairs, there falls on the person appointed any responsibility of an exceptional kind or degree;

(d) the effectiveness with which the person appointed appears to be carrying out, or has carried out, their duties; and

(e) the value and nature of the property with which the person appointed has to deal.

(3) Without prejudice to any order the court may make as to costs, the person appointed’s remuneration shall be paid to that person and the amount of any expenses incurred by that person shall be reimbursed—

(a) if the special administration (bank insolvency) order is not made, out of the estate of the investment bank;

(b) if the special administration (bank insolvency) order is made, as an expense of the administration, in the prescribed order of priority.

(4) Unless the court otherwise directs, in a case falling within paragraph (3)(a), the person appointed may retain out of the investment bank’s estate such sums or property as are, or may be, required for meeting their remuneration and expenses.

Section 36 Termination of appointment

(1) The appointment of the person appointed under rule 30 may be terminated—

(a) by the court on that person’s application; or

(b) on the application of any of the persons specified in rule 30(1).

(2) The appointment of the person so appointed will be automatically terminated on the making of the special administration (bank insolvency) order.

(3) On the termination of the appointment, the court may give such directions as it thinks fit with respect to the account of that person’s administration or any other matters which it thinks appropriate.

(4) Unless the court directs otherwise, where the appointment is terminated, the person who was appointed under rule 30 shall give notice of the termination. Such notice—

(a) shall be gazetted; and

(b) may be advertised in such other manner as that person thinks fit.

(5) The person who was appointed under rule 30 shall send notice of the termination of their appointment to the registrar of companies.

Section 37 Content of application

(1) An application by the Bank of England for a special administration (bank administration) order in respect of an investment bank must specify—

(a) the full name of the investment bank;

(b) any other trading names;

(c) the address of the investment bank’s registered office;

(d) an email address for the investment bank;

(e) the address of the Bank of England; and

(f) the identity of the person (or persons) nominated for appointment as administrator.

(2) If the investment bank has notified the Bank of England of an address for service which is, because of special circumstances, to be used in place of the registered office, that address shall be specified under paragraph (1)(c).

Section 38 Statement of proposed administrator

An application must be accompanied by a statement by the proposed administrator—

(a) specifying the name and business address of the person (or of each person) proposed to be appointed;

(b) giving that person’s (or each person’s) consent to act;

(c) giving details of the person’s (or each person’s) qualification to act as an insolvency practitioner; and

(d) giving details of any prior professional relationship that the person (or any of them) has had with the investment bank.

Section 39 Bank of England witness statement

(1) An application for a special administration (bank administration) order in respect of an investment bank must be accompanied by a witness statement made on behalf of the Bank of England—

(a) certifying that the conditions for applying for a special administration (bank administration) order, set out in section 143 of the 2009 Act (as applied by paragraph 6 of Schedule 2 to the Regulations), are met in respect of the investment bank;

(b) stating the investment bank’s current financial position to the best of the Bank of England’s knowledge and belief (including actual, contingent and prospective assets and liabilities);

(c) specifying any security which the Bank of England knows or believes to be held by a creditor of the investment bank;

(d) specifying the amount of client assets held by the investment bank to the best of the applicant’s knowledge and belief;

(e) specifying any insolvency proceedings which have been instituted in respect of the investment bank (including any process notified to the FSA under section 120 of the 2009 Act);

(f) giving details of the property transfer instrument which the Bank of England has made or intends to make in respect of the investment bank;

(g) where the property transfer instrument has not yet been made, explaining what effect it is likely to have on the investment bank’s financial position;

(h) specifying how functions are to be allocated where more than one person is to be appointed as administrator (stating, in particular, whether functions are to be exercisable jointly or concurrently); and

(i) including any other material which the Bank of England thinks may help the court to decide whether to make the special administration (bank administration) order.

(2) The statement must identify the person making the statement and must include the capacity in which that person makes the statement and the basis for that person’s knowledge of the matters set out in the statement.

Section 40 Filing

(1) The application, and its accompanying documents, must be filed with the court, together with enough copies of the application and accompanying documents for service under rule 41.

(2) Each filed copy—

(a) shall have the seal of the court applied to it;

(b) shall be endorsed with the date and time of filing;

(c) shall be endorsed with the venue for the hearing of the application (fixed by the court under rule 43); and

(d) shall be issued to the Bank of England.

Section 41 Service

(1) The Bank of England shall serve the application—

(a) on the investment bank;

(b) on the person (or each of the persons) nominated for appointment as administrator;

(c) on any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act (notice of preliminary steps of other insolvency procedures); and

(d) if the property transfer instrument was made or is to be made under section 11(2)(b) of the 2009 Act, on each transferee.

(2) Service under paragraph (1) must be service of a sealed and endorsed copy of the application and its accompanying documents issued under rule 40.

(3) Service must be effected as soon as is reasonably practicable, having regard in particular to the need to give the investment bank’s representatives a reasonable opportunity to attend the hearing.

(4) Service must be effected—

(a) by personal service to an address that the person has notified to the Bank of England as an address for service;

(b) by personal service to the person’s registered office (where no address for service has been notified);

(c) by personal service to the person’s usual or last known principal place of business in England and Wales (where there is no registered office and no address for service has been notified); or

(d) in such other manner and at such a place as the court may direct.

(5) If the Bank of England knows of an email address that is habitually used for business purposes by a person on whom service is required, the Bank must (in addition to personal service) as soon as is reasonably practicable send by email an electronic copy of a sealed and endorsed copy of the application and its accompanying documents.

(6) Service of the application shall be verified by a witness statement specifying the date on which, and the manner in which, service was effected.

(7) The witness statement, with a sealed copy of the application exhibited to it, shall be filed with the court—

(a) as soon as is reasonably practicable; and

(b) in any event, before the hearing of the application.

Section 42 Other notification

As soon as is reasonably practicable after filing the application the Bank of England must notify—

(a) any enforcement officer or other officer whom the Bank of England knows to be charged with effecting an execution or other legal process against the investment bank or its property;

(b) any person whom the Bank of England knows to have distrained against the investment bank or its property; and

(c) the FSA.

Section 43 Venue

(1) The court shall fix the venue for the hearing when the application is filed.

(2) In fixing the venue the court shall have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable; and

(b) the need for the investment bank’s representatives to be able to reach the venue in time for the hearing.

Section 44 Hearing

At the hearing of the application, any of the following may appear or be represented—

(a) the Bank of England;

(b) the FSA;

(c) the investment bank;

(d) a director of the investment bank;

(e) the person (or a person) nominated for appointment as administrator;

(f) any person who has given notice to the FSA in respect of the investment bank under section 120 of the 2009 Act; and

(g) with the permission of the court, any other person who appears to have an interest.

Section 45 Special administration (bank administration) order

If the court makes an special administration (bank administration) order, the order shall state—

(a) that the Bank of England is the applicant;

(b) the name, registered address and registered number of the investment bank to which the order refers;

(c) details of any other parties appearing at the hearing;

(d) the name and business address of any administrator appointed by the order;

(e) the date and time from which their appointment shall take effect;

(f) the terms for costs of the application; and

(g) any further particulars that the court thinks fit.

Section 46 Costs

If the court makes a special administration (bank administration) order, the following are payable as an expense of the bank administration—

(a) the Bank of England’s costs of making the application; and

(b) any other costs allowed by the court.

Section 47 Notice of order

(1) If the court makes a special administration (bank administration) order, it shall send 4 sealed copies to the Bank of England.

(2) The Bank of England shall as soon as is reasonably practicable send—

(a) a sealed copy to the administrator;

(b) a sealed copy to the FSA; and

(c) a sealed copy to the FSCS.

Section 48 Remuneration of the administrator

As soon as practicable after the making of a special administration (bank administration) order, the Bank of England shall fix the terms on which, in accordance with rule 196, the administrator is to be remunerated in respect of—

(a) work done by the administrator in pursuit of Objective A; and

(b) work done by the administrator in pursuit of Objectives 2 and 3 of the special administration objectives.

Section 49 Appointment of person under section 135

(1) An application to the court for the appointment of a person under section 135 of the 1986 Act (as applied by Table 2 in section 145(6) of the 2009 Act and by paragraph 6 of Schedule 2 to the Regulations) may be made by the Bank of England.

(2) The application must be supported by a witness statement stating—

(a) why the Bank of England thinks that such a person should be appointed;

(b) that the person to be appointed has consented to act;

(c) that the person to be appointed is qualified to act as an insolvency practitioner;

(d) whether, to the Bank of England’s knowledge, a company voluntary arrangement under Part 1 of the Insolvency Act 1986 has been proposed or is in force in respect of the investment bank; and

(e) the Bank of England’s estimate of the value of the assets in respect of which the person is to be appointed.

(3) If satisfied that sufficient grounds are shown for the appointment, the court may make it on such terms as it thinks fit.

Section 50 Order of appointment

(1) The order appointing a person described in rule 49(1) must specify the functions to be carried out in relation to the investment bank’s affairs.

(2) If the court makes an order appointing such a person, the court shall send 4 sealed copies of the order to the person appointed (and a copy by email if possible).

(3) As soon as is reasonably practicable after appointment the person appointed must send notice of the order of appointment to—

(a) the investment bank;

(b) the FSA;

(c) the FSCS; and

(d) the registrar of companies.

(4) Notice to the investment bank must be given by service in accordance with rule 41 above.

(5) Unless the court otherwise directs, on receipt of the order of appointment, as soon as reasonably practicable, the person appointed shall give notice of that appointment. Such notice—

(a) shall be gazetted; and

(b) may be advertised in such other manner as the person appointed thinks fit.

(6) The Bank of England may disclose the fact and terms of an order appointing a person under this rule to any person whom the Bank thinks has a sufficient business interest.

(7) Rules 33 to 36 shall then apply with the following modifications—

(a) a reference to “special administration (bank insolvency)” is to be read as a reference to “special administration (bank administration)”; and

(b) a reference to rule 30 is to be read as a reference to rule 49.