The Investment Bank Special Administration (Scotland) Rules 2011

• Citation: S.I. 2011/2262
• Sections: 194

Section 1 Citation

These Rules may be cited as the Investment Bank Special Administration (Scotland) Rules 2011.

Section 2 Commencement

These Rules come into force on 14th November 2011.

Section 3 Extent

These Rules extend to Scotland only.

Section 4 Interpretation

(1) In these Rules—

“the 1985 Act” means the Bankruptcy (Scotland) Act 1985 ;

“the 1986 Act” means the Insolvency Act 1986;

“the 2006 Act” means the Companies Act 2006 ;

“the 2009 Act” means the Banking Act 2009 ;

“ accounting period ” has the meaning given in rule 100 or, in relation to Part 6, section 52 of the 1985 Act as applied by rule 132;

“ appropriate fee ” means 15 pence per A4 or A5 page and 30 pence per A3 page;

“ 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 Great Britain;

“ expenses of the special administration ” means those expenses incurred in the course of the special administration, or treated as incurred as such by these Rules, that are to be paid out in accordance with Part 4;

“ final progress report ” has the meaning set out in rule 149;

“ 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);

“ 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);

“ 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 ;

“ principal ” has the meaning set out in rule 101(1);

“ proxy-holder ” has the meaning set out in rule 101(1);

“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 Scotland;

“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 content ” means—

in relation to a notice to be published or advertised in the Edinburgh Gazette, the content specified in rule 174; and

in relation to a notice to be advertised in any other way, the content specified in rule 175.

(2) 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 given in the Regulations.

(3) 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.

(4) 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.

(5) 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.

(6) 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) These 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

An application for a special administration order in respect of an investment bank must specify—

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

(b) any other trading names;

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

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

(e) an email address for the investment bank;

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

(g) 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 must be accompanied by a statement by the proposed administrator—

(a) specifying the name and 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 that 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 Lodging of application

The application, and its accompanying documents, must be lodged with the court.

Section 9 Service of application

(1) The application shall be served on—

(a) the FSA (if not the applicant);

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

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

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

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

(f) the registrar of companies; and

(g) the Keeper of the Register of Inhibitions and Adjudications for recording in that register.

(2) Notice of the application shall also be given to the persons upon whom the court orders that the application be served.

Section 10 Expenses

If the court makes a special administration order, the expenses of the applicant, and of any other party whose expenses are allowed by the court, shall be regarded as expenses of the special administration.

Section 11 Notice of special administration order

(1) If the court makes a special administration order, the applicant shall immediately after the order is made, send a certified copy of the order to—

(a) the administrator; and

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

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

Section 12 Application for a special administration (bank insolvency) order

(1) An application for a special administration (bank insolvency) order under section 95 of the 2009 Act (as applied by Schedule 1 to the Regulations) shall be in accordance with this Chapter and Chapter 74 of the Rules of the Court of Session 1994.

(2) In this rule, “ Rules of the Court of Session 1994 ” means those rules set out in Schedule 2 to the Act of Sederunt (Rules of the Court of Session 1994) 1994 .

Section 13 Persons entitled to copy of application

(1) Every contributory, 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 14 Appointment of administrator by the court

(1) This rule applies where an application is made for a special administration (bank insolvency) order.

(2) The court shall not make the order unless there is lodged in court a statement to the effect that—

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

(b) that person consents so to act.

(3) When the special administration (bank insolvency) order has been made, the court shall immediately send a certified copy of the order to—

(a) the person appointed as administrator under the order (who shall also, where practicable, be sent an electronic copy of the certified copy of the order); and

(b) the applicant.

(4) The administrator shall immediately—

(a) serve a copy of the order on the investment bank at its registered office and, where the administrator has received an electronic copy of the order and knows the investment bank’s email address, send an electronic copy to the investment bank; and

(b) send (electronically or otherwise) a copy of the order to—

(i) the FSA (if it is not the applicant);

(ii) the Bank of England (if it is not the applicant);

(iii) the FSCS; and

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

Section 15 Authentication of the administrator’s appointment

A copy certified by the clerk of court of the order of court appointing the administrator under rule 14 shall be sufficient evidence for all purposes and in any proceedings that that person has been appointed to exercise the powers and perform the duties of administrator in the special administration (bank insolvency) of that investment bank.

Section 16 Duties of Objective A committee

(1) 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.

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

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

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

(5) As soon as reasonably 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 135, 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.

(6) 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 17 Appointment of person under section 135 of the 1986 Act

(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 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 making of the order, make it on such terms as it thinks fit.

Section 18 Order of appointment

(1) The order of appointment of a person appointed under rule 17 shall specify the functions to be carried out by that person in relation to the investment bank’s affairs.

(2) The applicant shall, immediately after the order is made, send a certified copy of the order to—

(a) the person appointed;

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

(c) the FSA (if the FSA is not the applicant); and

(d) the FSCS,

and may also send to those persons an electronic copy of the certified copy of the order.

(3) Immediately after the order of appointment is made, the person appointed shall—

(a) serve a certified copy of the order on the investment bank and each director of the investment bank;

(b) give notice of the appointment to—

(i) the registrar of companies; and

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

(c) advertise the appointment in accordance with the directions of the court.

(4) Service on a director may be effected electronically by sending it to that director’s work email address.

Section 19 Caution

The cost of providing the caution required by the person appointed under rule 17 shall unless the court otherwise directs be—

(a) if a special administration (bank insolvency) order is not made, reimbursed to that person out of the property of the investment bank, and the court may make an order against the investment bank accordingly; and

(b) if a special administration (bank insolvency) order is made, reimbursed to that person as an expense of the special administration.

Section 20 Failure to find or maintain caution

(1) If the person (“ P ”) appointed under rule 17 fails to find or to maintain their caution, the court may remove P and make such order as it thinks fit as to expenses.

(2) If an order is made under this rule removing P, or discharging the order appointing P, the court shall give directions as to whether any, and if so what, steps should be taken for the appointment of another person in P’s place.

Section 21 Remuneration

(1) The remuneration of the person (“ P ”) appointed under rule 17 shall be fixed by the court from time to time.

(2) The basis for fixing the amount of the remuneration payable to P may be a commission calculated by reference to the value of the investment bank’s estate which has been realised by P but there shall in any event be taken into account—

(a) the work which, having regard to that value, was reasonably undertaken by P; and

(b) the extent of P’s responsibilities in administering the investment bank’s estate.

(3) Without prejudice to any order of the court as to expenses, P’s remuneration shall be paid, and the amount of any expenses incurred by P reimbursed—

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

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

(4) Unless the court otherwise directs, in a case falling within paragraph (3)(a), P 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 22 Termination of appointment

(1) The appointment of a person (“ P ”) under rule 17 may be terminated by the court on P’s application, or the application of—

(a) the Bank of England; or

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

(2) If P’s appointment terminates in consequence of the dismissal of the application for the special administration (bank insolvency) order, the court may give such directions as it thinks fit with respect to—

(a) the accounts of P’s administration;

(b) the expenses properly incurred by P; or

(c) other matters which it thinks appropriate.

(3) On the making of a special administration (bank insolvency) order, P’s appointment shall terminate.

(4) Unless the court directs otherwise, where the appointment is terminated, P shall give notice of that termination. Such notice—

(a) shall be advertised once in the Edinburgh Gazette; and

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

(5) P shall send notice of the termination of their appointment to the registrar of companies.

Section 23 Application for a special administration (bank administration) order

(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 of the investment bank;

(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 24 Statement of proposed administrator

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

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

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

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

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

Section 25 Lodging

The application, and its accompanying documents, must be lodged with the court.

Section 26 Service

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

(a) on the FSA;

(b) on the investment bank;

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

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

(e) if a property transfer instrument was made or is to be made under section 11(2)(b) of the 2009 Act (transfer to commercial purchaser), on each transferee as referred to in that instrument;

(f) on the registrar of companies; and

(g) on the Keeper of the Register of Inhibitions and Adjudications for recording in that register.

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

Section 27 Expenses

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

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

(b) any other expenses allowed by the court.

Section 28 Notice of order

If the court makes a special administration (bank administration) order, the Bank of England shall immediately after the order is made, send a certified copy of the order to—

(a) the administrator;

(b) the FSA; and

(c) the FSCS.

Section 29 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 135, the administrator is to be remunerated in respect of—

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

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

Section 30 Appointment of person under section 135 of the 1986 Act

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.

Section 31 Order of appointment

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

(2) The Bank of England shall, immediately after the order is made, send a certified copy of the order to—

(a) the person appointed;

(b) the FSA; and

(c) the FSCS,

and may also send to those persons an electronic copy of the certified copy of the order.

(3) Immediately after the order of appointment is made, the person appointed shall—

(a) serve a certified copy of the order on the investment bank and each director of the investment bank;

(b) give notice of the appointment to—

(i) the registrar of companies; and

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

(c) advertise the appointment in accordance with the directions of the court.

(4) Service on a director may be effected electronically by sending it to that director’s work email address.

(5) The Bank of England may disclose the fact and terms of the order of appointment to any person whom the Bank of England thinks has a sufficient business interest.

(6) Rules 19 to 22 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 a person being appointed under rule 17 is to a person being appointed following an application made under rule 30.

Section 32 Notification and advertisement of administrator’s appointment

(1) The notice of the appointment, which an administrator must publish as soon as reasonably practicable after appointment by virtue of paragraph 46(2)(b)—

(a) shall be advertised once in the Edinburgh Gazette; and

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

(2) In addition to the standard content, notices published under paragraph (1) must state—

(a) that an administrator has been appointed; and

(b) the date of the appointment.

(3) The administrator shall at the same time give notice of the appointment to the following persons—

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

(b) the Keeper of the Register of Inhibitions and Adjudications for recording in that register.

(4) The administrator shall send the notice of appointment and a copy of the special administration order to the registrar of companies within 7 days of the appointment.

(5) Where, by virtue of a provision of Schedule B1 to the 1986 Act or of these Rules, the administrator is required to send a notice of the appointment to any person, the administrator shall satisfy that requirement by sending to that person—

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

(b) the name and business address of the person or persons appointed as administrator.

Section 33 Notice requiring statement of affairs

(1) In this Part, “ relevant person ” has the meaning given to it in paragraph 47(3).

(2) The administrator shall send to each relevant person upon whom the administrator decides to make a requirement under paragraph 47 a notice requiring the relevant person to provide a statement of the investment bank’s affairs.

(3) The notice shall inform each of the relevant persons—

(a) of the names and addresses of all others (if any) to whom the same notice has been sent;

(b) of the time within which the statement must be delivered;

(c) of the effect of paragraph 48(4) (penalty for non-compliance); and

(d) of the application to that relevant person, and to each other relevant person, of section 235 of the 1986 Act (duty to provide information, and to attend on the administrator, if required).

(4) The administrator shall furnish each relevant person upon whom the administrator decides to make a requirement under paragraph 47 with the information that the administrator considers is necessary for the preparation of the statement of affairs.

Section 34 Details of the client assets held by the investment bank

(1) The statement of affairs shall include particulars of the client assets held by the investment bank.

(2) The particulars shall include—

(a) the names and addresses of clients of the investment bank for whom the investment bank holds client assets, but where these clients are individuals, the administrator shall not disclose their names and addresses;

(b) details as to the amount of client assets held, categorised into type and securities of a particular description;

(c) details as to the types of ownership those clients assert over the client assets; and

(d) details as to any security interest held by the investment bank or another person in respect of the client assets.

Section 35 Statements of affairs and statements of concurrence

(1) In addition to the information required by rule 34, the statement of the investment bank’s affairs shall be in the form required by rule 7.30 of, and Schedule 5 to, the Insolvency (Scotland) Rules 1986 .

(2) Where more than one relevant person is required to submit a statement of affairs the administrator may require one or more such persons to submit, in place of a statement of affairs, a statement of concurrence in the form required by rule 7.30 and Schedule 5; and where the administrator does so, the person making the statement of affairs shall be informed of that fact.

(3) The person making the statutory declaration in support of a statement of affairs shall send the statement and one copy of the statement to the administrator, and a copy of the statement to each of those persons whom the administrator has required to submit a statement of concurrence.

(4) A person required to submit a statement of concurrence shall deliver to the administrator the statement of concurrence, together with one copy of the statement, before the end of the period of 5 business days (or such other period as the administrator may agree) beginning with the day on which the statement of affairs being concurred with is received by that person.

(5) A statement of concurrence may be qualified in respect of matters dealt with in the statement of affairs, where the maker of the statement of concurrence is not in agreement with the statement of affairs, the maker considers that statement to be erroneous or misleading, or the maker is without the direct knowledge necessary for concurring with it.

(6) Subject to rule 36, the administrator shall, as soon as reasonably practicable, file a copy of the statement of affairs and any statement of concurrence with the registrar of companies.

(7) Subject to rule 36, the administrator shall insert any statement of affairs submitted to the administrator, together with any statement of concurrence, in the sederunt book.

Section 36 Limited disclosure

(1) Where the administrator thinks that it would prejudice the conduct of the administration or might be reasonably expected to lead to violence against any person for the whole or part of the statement of the investment bank’s affairs to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of the statement, or any specified part of it.

(2) The court may order that the statement or, as the case may be, the specified part of it, shall not be filed with the registrar of companies or entered in the sederunt book.

(3) The administrator shall as soon as reasonably practicable file a copy of that order with the registrar of companies, and shall place a copy of the order in the sederunt book.

(4) If a creditor or a client seeks disclosure of the statement of affairs or a specified part of it in relation to which an order has been made under this rule, that person may apply to the court for an order that the administrator disclose it or a specified part of it.

(5) Where a special administration (bank administration) order has been made, and where an application has been made under paragraph (4), the Bank of England and the FSA may appear or be represented at the hearing or may make written representations.

(6) The applicant shall give the administrator notice of the application at least 3 business days before the hearing.

(7) The court may attach to an order for disclosure any conditions as to confidentiality, duration and scope of the order in any material change of circumstances, and other matters as it sees fit.

(8) If there is a material change in circumstances rendering the limit on disclosure unnecessary, the administrator shall, as soon as reasonably practicable after the change, apply to the court for the order to be discharged or varied, and upon the discharge or variation of the order the administrator shall, as soon as reasonably practicable—

(a) file a copy of the full statement of affairs (or so much of the statement of affairs as is no longer subject to the order) with the registrar of companies;

(b) where the administrator has previously sent a copy of the statement of proposals to the creditors and clients in accordance with paragraph 49, provide the creditors and clients with a copy of the full statement of affairs (or so much of the statement as is no longer subject to the order) or a summary of the statement of affairs; and

(c) place a copy of the full statement of affairs (or so much of the statement as is no longer subject to the order) in the sederunt book.

(9) In paragraph (8)(b) the reference to the statement of proposals having been sent out in accordance with paragraph 49 also includes the situation where the statement has been sent out in accordance with paragraph 9 of Schedule 2 to the Regulations.

Section 37 Release from duty to submit statement of affairs

(1) The power of the administrator under paragraph 48(2) to revoke a requirement under paragraph 47(1), or to grant an extension of time, may be exercised at the administrator’s own instance, or at the request of any relevant person.

(2) A relevant person whose request under this rule has been refused by the administrator may apply to the court for a release or extension of time, and where the application is for an extension of time, the period referred to in paragraph 48(1) is suspended pending the court’s decision.

(3) An applicant under this rule shall bear their own expenses in the application and, unless the court otherwise orders, no allowance towards such expenses shall be made as an expense of the special administration of the investment bank.

(4) Where an application has been made under paragraph (2), the FSA may be given notice of the hearing and may appear or be represented and in a special administration (bank administration) the administrator and the Bank of England may also be given notice of the hearing and may appear or be represented at the hearing or may make written representations.

Section 38 Expenses of statement of affairs

(1) A relevant person who provides to the administrator a statement of affairs of the investment bank or statement of concurrence shall be allowed, and paid by the administrator as an expense of the special administration, any expenses incurred by the relevant person in so doing which the administrator considers reasonable.

(2) Any decision by the administrator under this rule is subject to appeal to the court.

(3) Nothing in this rule relieves a relevant person from any obligation to provide a statement of affairs or statement of concurrence, or to provide information to the administrator.

Section 39 Statement of proposals

(1) The administrator shall under paragraph 49 (or in the case of a special administration (bank administration) paragraph 7 of Schedule 2 to the Regulations) make a statement of proposals, which shall be sent to the registrar of companies.

(2) In addition to the information required by that paragraph, the statement of proposals must include—

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

(b) the full name, any other trading names, the registered address and registered number of the investment bank;

(c) details of the administrator’s appointment (including the date of appointment);

(d) in the case of joint administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the investment bank and details of any shareholdings in the investment bank they have;

(f) an account of the circumstances giving rise to the application for the appointment of the administrator;

(g) if a statement of the investment bank’s affairs has been submitted, a copy or summary of it with the administrator’s comments, if any;

(h) if an order limiting the disclosure of the statement of affairs has been made under rule 36, a statement of that fact, as well as—

(i) details of who provided the statement of affairs,

(ii) the date of the order for limited disclosure, and

(iii) the details or a summary of the details that are not subject to that order;

(i) if a full statement of affairs is not provided, the names, addresses and debts of the creditors including details of any security held (or in case of any depositors of the investment bank, a single statement of their aggregate debt);

(j) if a full statement of affairs is not provided, or if no statement of affairs is provided, the names and addresses of clients of the investment bank together with a description of the amount and type of client assets held, the type of ownership the clients have in respect of those assets and details as to any security interest held by the investment bank or another person in respect of those assets, but where those clients are individuals, their names and addresses are not to be disclosed;

(k) if no statement of affairs is provided, details of the financial position of the investment bank at the latest practicable date (which must, unless the court otherwise orders, be a date not earlier than that on which the investment bank entered special administration), a list of the investment bank’s creditors including their names, addresses and details of their debts, including any security held (or in case of any depositors of the investment bank, a single statement of their aggregate debt) and an explanation as to why there is no statement of affairs;

(l) the basis upon which it is proposed that the administrator’s remuneration should be fixed under rule 135, and, if this basis has already been set by the Objective A committee or by the Bank of England in respect of the relevant Objective A, or in respect of Objectives 2 and 3 of the special administration objectives, details as to what has been set and any proposals for this to be changed;

(m) a statement complying with paragraph (4) of any pre-administration costs charged or incurred by the administrator or, to the administrator’s knowledge, by any other person qualified to act as an insolvency practitioner;

(n) details of whether (and why) the administrator proposes to apply to the court under section 176A(5) of the 1986 Act (share of assets for unsecured creditors) as applied by regulation 15 (unless the administrator intends to propose a company voluntary arrangement);

(o) an estimate of the value of the prescribed part for the purposes of section 176A (unless the bank intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief;

(p) an estimate of the value of the investment bank’s net property (unless the administrator intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief;

(q) in—

(i) a special administration, an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FSA has given a direction under regulation 16, an explanation as to how this has dictated the priority given to a particular objective), and

(ii) a special administration (bank insolvency) or a special administration (bank administration)—

(aa) a summary of how the relevant Objective A is being or has been achieved and the resources devoted to the pursuit of the relevant Objective A; and

(bb) an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FSA has given a direction under regulation 16, an explanation as to how this has dictated the priority given to a particular objective);

(r) the manner in which the affairs and business of the investment bank have been managed and financed since the date of the administrator’s appointment (including the reasons for and terms of any disposal of assets);

(s) details as to the order in which the administrator aims to pursue the special administration objectives and the manner in which the affairs and business of the investment bank will be managed and financed if the administrator’s proposals are approved;

(t) whether the administrator expects a dividend to be paid to creditors and an estimate of the amount of this dividend;

(u) how it is proposed that the special administration shall end (winding-up or voluntary arrangement), in accordance with Objective 3; and

(v) any other information which the administrator thinks necessary to enable creditors and clients to vote for the approval of the statement of proposals.

(3) In this Part—

(a) “pre-administration costs” are—

(i) fees charged, and

(ii) expenses incurred,

by the administrator, or another person qualified to act as an insolvency practitioner, before the investment bank entered special administration but with a view to its doing so; and

(b) “unpaid pre-administration costs” are pre-administration costs which had not been paid when the investment bank entered special administration.

(4) A statement of pre-administration costs complies with this paragraph if it includes—

(a) details of any agreement under which the fees were charged and expenses incurred, including the parties to the agreement and the date on which the agreement was made;

(b) details of the work done for which the fees were charged and expenses incurred;

(c) an explanation of why the work was done before the investment bank entered special administration and how it would further the achievement of the special administration objectives;

(d) a statement of the amount of the pre-administration costs, setting out separately—

(i) the fees charged by the administrator,

(ii) the expenses incurred by the administrator,

(iii) the fees charged (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately), and

(iv) the expenses incurred (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately);

(e) a statement of the amounts of pre-administration costs which have already been paid (set out separately as under sub-paragraph (d));

(f) the identity of the person who made the payment or, if more than one person made the payment, the identity of each such person and of the amounts paid by each such person set out separately as under sub-paragraph (d);

(g) a statement of the amounts of unpaid pre-administration costs (set out separately as under sub-paragraph (d)); and

(h) a statement that the payment of unpaid pre-administration costs as an expense of the administration is—

(i) subject to approval under rule 112; and

(ii) not part of the proposals subject to approval under paragraph 53.

(5) The statement of proposals—

(a) may exclude information the disclosure of which could seriously prejudice the commercial interests of the investment bank; and

(b) must include a statement of any exclusion.

(6) In the case of special administration (bank administration) following transfer to a bridge bank under section 12(2) of the 2009 Act—

(a) the statement of proposals must state whether any payment is to be made to the investment bank from a scheme under a resolution fund order; or

(b) if that information is unavailable when the statement of proposals is made, the administrator must issue a supplemental statement when the information is available.

(7) Following an application by the administrator under paragraph 107, where the court orders an extension of the period of time in paragraph 49(5), the administrator shall notify—

(a) every creditor of the investment bank of whose address the administrator is aware;

(b) every client of the investment bank of whose claim the administrator is aware and whom the administrator has a means of contacting; and

(c) the FSA,

as soon as possible after the order is made.

(8) Where the administrator wishes to publish a notice under paragraph 49(6) or gives notice that the statement of proposals is to be provided free of charge to a market infrastructure body, the notice must be published once in a newspaper which the administrator considers to be suitable.

(9) A notice under paragraph (7) must include the standard content and must state—

(a) that persons can write for a copy of the statement of proposals for achieving the purpose of administration; and

(b) the address to which to write.

(10) This notice must be published as soon as reasonably practicable after the administrator sends out the statement of proposals in accordance with paragraph 49(4) (or in the case of a special administration (bank administration) under paragraph 9 of Schedule 2 to the Regulations), but no later than 8 weeks (or such other period as may be agreed by the creditors and clients or as the court may order) from the date that the investment bank entered special administration.

Section 40 Initial meeting

(1) As soon as reasonably practicable after an invitation to the initial meeting has been sent out in accordance with paragraph 51(1), (or in a special administration (bank administration), in accordance with paragraph 10 of Schedule 2 to the Regulations), the administrator must have advertised once in the Edinburgh Gazette—

(a) that an initial meeting of creditors and clients is to take place;

(b) the venue fixed for the meeting; and

(c) the full name and business address of the administrator.

(2) The information required to be advertised under paragraph (1) may also be advertised in such other manner as the administrator thinks fit.

(3) In a special administration (bank insolvency) or a special administration (bank administration) the Bank of England and the FSCS shall also be invited to the initial meeting.

(4) This rule shall not apply where the FSA has given a direction under regulation 16 and the direction has not been withdrawn.

Section 41 Notice to officers

(1) Where rule 40 applies, notice to attend the meeting must be given to every present or former officer of the investment bank whose presence the administrator thinks is required at the same time that notice is sent to creditors and clients.

(2) That notice must contain—

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

(b) the full name, registered address, registered number and any other trading names of the investment bank;

(c) the full name and business address of the administrator; and

(d) details of the venue, the date and the time of the meeting.

(3) Every person who receives a notice under paragraph (1) must attend.

Section 42 Business of the initial meeting

(1) At the initial meeting of creditors and clients—

(a) a creditors’ committee may be established in accordance with Chapter 8 of this Part; and

(b) the statement of proposals shall be approved as follows.

(2) The proposals shall not be approved unless both classes of voter have voted to approve them.

(3) The creditors and the clients shall vote separately on whether to approve the proposals.

(4) In a special administration (bank insolvency) (and in a special administration (bank administration) if there are depositors) the FSCS shall be entitled to vote as a creditor under this rule and rule 65 has effect with respect to its voting rights.

(5) If the proposals were approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposal as modified.

(6) Where the administrator is unable to get the requisite majority of a class of voter for approval of the statement of proposals (with or without any modifications), rule 43 applies.

(7) Paragraph (6) shall not apply in a special administration (bank administration).

(8) This rule shall not apply where the FSA has given a direction under regulation 16 and the direction has not been withdrawn.

Section 43 Adjournment of meeting to approve the statement of proposals

(1) If, at the initial meeting of creditors and clients, there is not the requisite majority for approval of the statement of proposals (with or without any modifications), the administrator may, and shall if a resolution is passed to that effect, adjourn the meeting for not more than 14 days (subject to any direction by the court).

(2) If there are subsequently further adjournments, the final adjournment must not be to a day later than 14 days after the date on which the meeting was originally held (subject to any direction by the court).

(3) Where a meeting is adjourned under this rule, proofs and proxies may be used if lodged at any time up to 12.00 hours on the business day immediately before the adjourned meeting.

(4) Where at the initial meeting, the proposals were approved (whether or not with modifications) by one class of voter but not the other, that approval shall no longer stand at the adjourned meeting unless the version of the proposals to be voted on has not been modified from the version that was approved.

(5) If the administrator is unable to get the requisite majority of creditors or clients for approval of the statement of proposals, the administrator may apply to the court for directions under paragraph 63.

(6) This rule shall not apply in a special administration (bank administration).

Section 44 Revision of the statement of proposals

(1) The administrator shall under paragraph 54 (or regulation 18 or paragraph 11 of Schedule 2 to the Regulations as the case may be) make a statement setting out the proposed revisions to the statement of proposals (“the revised statement”).

(2) The revised statement, which shall be sent out in accordance with paragraph 54(2)(b) and (c), shall include—

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

(b) the full name, registered address, registered number and any other trading names of the investment bank;

(c) details of the administrator’s appointment (including the date of appointment);

(d) in the case of joint administrators, details of the apportionment of functions;

(e) the names of the directors and secretary of the investment bank and details of any shareholdings in the investment bank they have;

(f) a summary of the initial proposals and the reasons for proposing a revision;

(g) details of the proposed revision including details of the administrator’s assessment of the likely impact of the proposed revision upon the creditors generally or upon each class of creditor or on the clients (as the case may be); and

(h) any other information that the administrator thinks necessary to enable creditors to decide whether or not to vote for the proposed revisions.

(3) The FSA shall be sent a copy of the revised statement at the same time as the revised statement is sent out.

(4) Where the administrator considers that the revision proposed will only affect creditors or, as the case may be, clients, the notice of the meeting to consider the revised proposals shall be sent to both creditors and clients, but will state who is invited to the meeting.

(5) In a special administration (bank insolvency) or a special administration (bank administration) the Bank of England and the FSCS shall also be invited to the meeting.

(6) Subject to paragraph 54(3) within 5 business days of sending out the revised statement in paragraph (1), the administrator shall send a copy of the statement to every member of the investment bank.

(7) Any notice to be published under paragraph 54(3) shall be advertised in such a manner as the administrator thinks fit.

(8) The notice shall be published as soon as reasonably practicable after the administrator sends the statement in accordance with paragraph 54(2) and, in addition to the standard content, shall state—

(a) that members can write for a copy of the statement of revised proposals, and

(b) the address to which to write.

(9) Paragraphs (4) and (5) shall not apply—

(a) in a special administration (bank administration), where—

(i) the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals, and

(ii) Objective A has been achieved; and

(b) in a special administration or a special administration (bank insolvency) where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals.

(10) In this rule, a reference to—

“paragraph 54(2)” also includes a reference to regulation 18(4) or paragraph 13(4) of Schedule 2 to the Regulations as the case may be; and

“paragraph 54(3)” also includes a reference to regulation 18(5) or paragraph 13(5) of Schedule 2 to the Regulations as the case may be.

Section 45 Meeting to approve the revised statement of proposals

(1) This rule applies to a meeting of creditors, a meeting of clients or a meeting of creditors and clients to approve the revisions to the statement of proposals.

(2) Where the revisions are being approved by a meeting of creditors and clients—

(a) the creditors and the clients shall vote separately on whether to approve the revisions;

(b) the revisions shall not be approved unless both classes of voter have voted to approve them; and

(c) where the revisions are approved by a class of voter subject to a modification, the proposals will not be considered approved by the other class unless that other class has approved the proposals as modified.

(3) In a special administration (bank insolvency) (and in an special administration (bank administration) if there are depositors) the FSCS shall be entitled to vote as a creditor under this rule and rule 65 has effect with respect to its voting rights.

(4) In a special administration or a special administration (bank insolvency), where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals, this rule shall not apply.

(5) In a special administration (bank administration), where the FSA has given a direction under regulation 16 and has not withdrawn its direction at the time that the administrator proposes a revision to the statement of proposals—

(a) if Objective A has not been achieved, paragraph (2)(c) shall not apply; and

(b) if Objective A has been achieved, this rule shall not apply.

Section 46 Notice to creditors and clients

As soon as reasonably practicable after the conclusion of a meeting of creditors or clients, or of creditors and clients to consider the administrator’s proposals or revised proposals, the administrator shall—

(a) send notice of the result of the meeting to every person who received notice of the meeting and to the registrar of companies;

(b) lodge in court, and send to any person who did not receive notice of the meeting and of whose claim the administrator has become subsequently aware, a copy of the notice of the result of the meeting along with a copy of the proposals which were considered at that meeting; and

(c) place a copy of the notice of the result of the meeting in the sederunt book.

Section 47 Meetings generally

This Chapter, except where different provision is made in the Regulations or these Rules, applies to meetings summoned by the administrator under—

(a) paragraph 51 (initial meeting);

(b) paragraph 54(2) (meeting to consider revision to the administrator’s proposals);

(c) paragraph 62 (general power to summon meetings),

or following a request or a direction from the court under paragraph 56 (further creditors’ meetings).

Section 48 Venue

(1) In fixing the venue for a meeting, the convener must have regard to the convenience of those attending.

(2) Meetings must be summoned for commencement between 10.00 and 16.00 hours on a business day (subject to any direction by the court).

(3) In this rule, “ meeting ” includes an adjourned meeting.

Section 49 Notice of meeting by individual notice: when and where sent

(1) This rule applies except where the court orders under rule 51 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must be delivered at least 14 days before the day fixed for the meeting as provided in paragraph (3).

(3) Notice must be sent—

(a) for a meeting involving the creditors, to all the creditors of whose address the administrator is aware and who had claims against the investment bank at the date when it entered administration (except for those who have subsequently been paid in full);

(b) for a meeting involving the clients, to all clients of whose claim the administrator is aware (except for those who have no outstanding claim to client assets held by the investment bank) and whom the administrator has a means of contacting;

(c) for a meeting of contributories, to every person appearing (by the investment bank’s books or otherwise) to be a contributory of the investment bank.

(4) The FSA, and in a special administration (bank insolvency) or special administration (bank administration), the Bank of England and the FSCS, shall also be notified of any such meeting.

Section 50 Notice of meeting by individual notice: content and accompanying documents

(1) This rule applies except where the court orders under rule 51 that notice of a meeting be given by advertisement only.

(2) Notice summoning a meeting must specify—

(a) the purpose of and venue for the meeting;

(b) the persons who are entitled to attend and vote at the meeting;

(c) the effects of Chapter 5 on voting at the meeting,

and state that claims or proofs and (if applicable) proxies must be lodged at a specified place not later than 12.00 hours on the business day before the date fixed for the meeting in order that creditors or clients may be entitled to vote at the meeting.

(3) Forms of proxy complying with rule 102 must be sent out with every notice summoning a meeting.