The Payment and Electronic Money Institution Insolvency (Scotland) Rules 2022

• Citation: S.I. 2022/1239
• Sections: 207

Section 1 Citation

These Rules may be cited as the Payment and Electronic Money Institution Insolvency (Scotland) Rules 2022.

Section 2 Commencement

These Rules come into force on 19th December 2022.

Section 3 Extent

These Rules extend to Scotland only.

Section 4 Interpretation

(1) The following definitions apply to these Rules or may be seen at the places indicated—

(a) user, which has the meaning set out in regulation 6, or

(b) holder, which has the meaning set out in regulation 6

(a) in relation to a notice to be gazetted, the contents specified in rule 177,

(b) in relation to a notice to be advertised in any other way, the contents specified in rule 180

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

(3) Reference to a notice or other document being given, delivered or sent under these Rules or in the Regulations shall be interpreted in accordance with Chapters 2 to 4 of Part 12 of these Rules.

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

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

(a) it is a reference to a paragraph within the same rule (in which case the number of the paragraph is written in parenthesis), or

(b) otherwise stated,

be to the paragraph so numbered in Schedule B1 to the IA 1986, as applied by regulation 37.

(6) A reference to a provision of the IA 1986, if that provision is listed in the Table in regulation 37, is a reference to that provision as applied and modified by the Regulations.

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

(8) For the purposes of these Rules references to a customer, or to relevant funds do not include a customer of, or relevant funds received by—

(a) a small payment institution, or

(b) in the case of funds received for the execution of payment transactions that are not related to the issuance of electronic money, a small electronic money institution,

where the institution had not chosen voluntarily to safeguard the funds when it entered special administration.

(9) To the extent that a customer claims a shortfall as a creditor, that shortfall claim is to be treated as a debt owed to the customer by the institution arising before the institution entered special administration.

(10) A relevant funds claim which is held jointly by one or more customers shall be treated as a single relevant funds claim under these Rules.

Section 5 Application of Rules

These Rules apply in respect of a special administration.

Section 6 Content of application

An application for a special administration order must state—

(a) the full name and registered number of the institution,

(b) any other trading names of the institution,

(c) the institution’s date of incorporation,

(d) the institution’s nominal capital and the amount of capital paid up,

(e) the address of the institution’s registered office,

(f) an email address for the institution,

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

(h) which of the grounds in regulation 9(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,

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

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 must be served on—

(a) the FCA (if not the applicant),

(b) the institution (if neither the institution 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 FCA in respect of the institution under regulation 11(6),

(e) if there is in force for the institution a voluntary arrangement under Part 1 of the IA 1986, the supervisor of that arrangement,

(f) the registrar of companies,

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

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

Section 10 Further notification

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

(a) any messenger-at-arms or sheriff officer whom the applicant knows to be charged with executing diligence or other legal process against the institution or its property,

(b) any person whom the applicant knows to have executed diligence or other legal process against the institution or its property.

Section 11 The hearing

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

(a) the applicant,

(b) the institution,

(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 IA 1986,

(f) any person who has given notice to the FCA in respect of the institution under regulation 11(6),

(g) the FCA,

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

Section 12 The special administration order

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

(a) the name and address of the applicant,

(b) the name, registered address and registered number of the institution 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,

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

Section 13 Expenses allowed by the court

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

(a) costs of the applicant,

(b) the costs of any other party whose expenses are allowed by the court.

Section 14 Notice of special administration order

(1) If the court makes a special administration order, it must, as soon as is reasonably practicable, deliver two copies of the order certified by the court to the applicant.

(2) The applicant must as soon as is reasonably practicable, deliver a certified copy to—

(a) the administrator,

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

(3) If the court makes an order under regulation 10(1)(d) or regulation 10(1)(f), it may direct (or give directions as) to whom and how notice of that order is to be given.

Section 15 Notification and advertisement of administrator’s appointment

(1) The notice of appointment under paragraph 46(2)(b) to be given by the administrator as soon as is reasonably practicable after appointment—

(a) must be gazetted,

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

(2) In addition to the standard contents, the notice must state that an administrator has been appointed and the date of the appointment.

(3) The administrator must as soon as is reasonably practicable after appointment give notice of the appointment to—

(a) any messenger-at-arms or sheriff officer who, to the administrator’s knowledge, is charged with executing diligence or other legal process against the institution,

(b) any person who, to the administrator’s knowledge, has executed diligence or other legal process against the institution,

(c) the Keeper of the Register of Inhibitions and Adjudications,

(d) any supervisor of a voluntary arrangement under Part 1 of the IA 1986.

(4) The administrator must send the notice of appointment to the registrar of companies within seven days of the date of the order appointing them.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 16 Notice requiring statement of affairs

(1) In this Part, “ relevant person ” has the meaning given to it in paragraph 47(3) and “nominated person” is the relevant person who has been required by the administrator to make out and deliver a statement of affairs to the administrator.

(2) The administrator must deliver notice to each relevant person who the administrator deems appropriate requiring that relevant person to make out and deliver a statement of the institution’s affairs.

(3) The notice must be headed “notice requiring statement of affairs” and must inform each of the nominated persons of—

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

(b) the date by which the statement must be delivered to the administrator, being before the end of the period of eleven days beginning with the day on which the nominated person receives notice of the requirement,

(c) the effect of paragraph 48(4),

(d) the application to that nominated person and to each other relevant person of section 235 of the IA 1986 ,

(e) details of the court and the relevant court reference number,

(f) the full name, registered address, registered number, all trading names and principal trading office of the institution,

(g) the name, business address and IP number of the person or persons appointed as administrator and the date of their appointment.

(3A) The notice must be authenticated and dated by the administrator.

(4) The administrator must, on request, provide details to the nominated person as to how the statement should be prepared.

(5) The nominated person must deliver the statement of affairs, together with a copy, to the administrator.

Section 17 Statement of affairs: content

(1) The statement of the institution’s affairs must be headed “Statement of affairs” and must—

(a) identify the institution immediately below the heading,

(b) state that it is a statement of the affairs of the institution on a specified date, being the date on which it entered special administration.

(2) The statement of affairs must contain (in addition to the matters required by paragraph 47(2))—

(a) a summary of the assets of the institution, setting out the book value and the estimated realisable value of—

(i) any assets subject to a fixed charge,

(ii) any assets subject to a floating charge,

(iii) any uncharged assets,

(iv) the total value of all the assets available for preferential creditors,

(b) a summary of the liabilities of the institution, setting out—

(i) the amount of preferential debts,

(ii) an estimate of the deficiency with respect to preferential debts or the surplus available after paying the preferential debts,

(iii) an estimate of the prescribed part, if applicable,

(iv) an estimate of the total assets available to pay debts secured by floating charges,

(v) the amount of debts secured by floating charges,

(vi) an estimate of the deficiency with respect to debts secured by floating charges or the surplus available after paying the debts secured by fixed or floating charges,

(vii) the amount of unsecured debts (excluding preferential debts),

(viii) an estimate of the deficiency with respect to unsecured debts or the surplus available after paying unsecured debts,

(ix) any issued and called-up capital,

(x) an estimate of the deficiency with respect to, or surplus available to, members of the institution,

(c) a list of the institution’s creditors with the further particulars required by paragraph (3) indicating—

(i) any creditors under hire-purchase, conditional sale and hiring agreements,

(ii) any creditors claiming retention of title over property in the institution’s possession,

(d) the name and address of each member of the institution and the number, nominal value and other details of the shares held by each member.

(3) Subject to paragraphs (4) and (5) , the list of creditors required by paragraph 47(2) and paragraph (2)(c) of this rule must contain the following details—

(a) the name and postal address of the creditor,

(b) the amount of the debt owed to the creditor,

(c) details of any security held by the creditor,

(d) the date on which the security was given,

(e) the value of any such security.

(4) Paragraph (5) applies where the particulars required by paragraph (3) relate to creditors who are—

(a) employees or former employees of the institution, or

(b) consumers claiming amounts paid in advance for the supply of goods or services.

(5) Where this paragraph applies—

(a) the statement of affairs itself must state—

(i) the number of employees or former employees of the institution and the total of the debts owed to them,

(ii) the number of consumers claiming amounts paid in advance for the supply of goods or services and the total of the debts owed to them,

(b) the particulars required by paragraph (3) must be set out in a separate schedule to the statement of affairs for each of the employees, former employees and consumers referred to in paragraphs (4)(a) and (4)(b) .

(6) Subject to paragraph (7) , the administrator must not—

(a) disclose to any person any schedule or any of the details contained in any schedule provided under paragraph (5)(b) ,

(b) send or deliver to any person (including the registrar of companies) any schedule provided under paragraph (5)(b) at the same time as sending or delivering the statement of affairs,

(c) include a schedule or any of the details contained in any schedule provided under paragraph (5)(b) in a statement of proposals under rule 24 or a revised statement of proposals under rule 30 .

(7) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (5)(b) .

Section 18 Details of the asset pool, safeguarding measures and reconciliation

(1) In addition to the matters required by paragraph 47(2), paragraph 47(5) and under rule 17 , the statement of affairs must include particulars of the asset pool including the relevant funds held by the institution.

(2) The particulars must include—

(a) subject to paragraph (3) , the names and contact details of each customer of the institution and each such customer’s relevant funds claim,

(b) details of the asset pool including details of—

(i) the safeguarding measures employed by the institution and the amount of relevant funds safeguarded in accordance with each of such measures,

(ii) any relevant funds invested (in the case of a payment institution) in secure, liquid assets approved by the FCA in accordance with regulation 23(6) of the PSR 2017 or (in the case of an electronic money institution) in secure, liquid low-risk assets in accordance with regulation 21(2) of the EMR 2011 ,

(iii) any insurance policy covering relevant funds,

(iv) the accounts in which relevant funds are held,

(v) any guarantee given by an authorised insurer or authorised credit institution covering relevant funds,

(c) details as to any security interest held by the institution or another person in respect of the asset pool.

(3) Where the particulars required by paragraph (2)(a) relate to customers who are individuals—

(a) the particulars must be set out in a separate schedule from the statement of affairs,

(b) the statement of affairs must state the number of customers who are individuals and the total of the debts owed to them.

(4) Subject to paragraph (5) , the administrator must not—

(a) disclose to any person any schedule or any of the details contained in any schedule provided under paragraph (3)(a) ,

(b) send or deliver to any person (including the registrar of companies) any schedule provided under paragraph (3)(a) at the same time as sending or delivering the statement of affairs,

(c) include any schedule or any of the details contained in any schedule provided under paragraph (3)(a) in a statement of proposals under rule 24 or a revised statement of proposals under rule 30 .

(5) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (3)(a) .

Section 19 Statement of concurrence

(1) The administrator may require any relevant person to submit a statement of concurrence.

(2) Where the administrator requires a statement of concurrence, the nominated person making the statement of affairs must be informed of that fact.

(3) The nominated person must deliver a copy of the statement of affairs to every person who has been required to submit a statement of concurrence.

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

(5) A statement of concurrence—

(a) must identify the institution,

(b) may be qualified in respect of matters dealt with by the statement of affairs, where the relevant person making the statement of concurrence—

(i) is not in agreement with the statement of affairs,

(ii) considers the statement of affairs to be erroneous or misleading,

(iii) is without the direct knowledge necessary for concurring with it.

(6) A statement of concurrence must be a statutory declaration made in accordance with the Statutory Declaration Act 1835 .

(7) Subject to paragraph (9) and rule 20 , the administrator must as soon as is reasonably practicable deliver a copy of the statement of affairs and any statement of concurrence to the registrar of companies.

(8) Subject to paragraph (10) and rule 20 , the administrator must insert any statement of affairs submitted to the administrator, together with any statement of concurrence, in the sederunt book.

(9) The administrator must not deliver to the registrar of companies with the statement of affairs and any statement of concurrence any schedule required by rule 17(5)(b) or rule 18(3)(a) .

(10) Any schedule required by rule 17(5)(b) or rule 18(3)(a) must not be entered in the sederunt book.

Section 20 Limited disclosure

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

(2) The court may, on such application, order that the statement of affairs or any statement of concurrence or, as the case may be, a specified part of either must not be delivered to the registrar of companies or entered in the sederunt book.

(3) The administrator must, as soon as is reasonably practicable, deliver a copy of the order, the statement of affairs and any statement of concurrence (to the extent provided by the order) to the registrar of companies and must place a copy of the order in the sederunt book.

(4) If a creditor or a customer seeks disclosure of the statement of affairs, a statement of concurrence or a specified part of either 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) An application under paragraph (4) must be supported by written evidence in the form of an affidavit.

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

(7) The court may make any order for disclosure subject to such conditions as to—

(a) confidentiality,

(b) duration,

(c) the scope of the order in the event of any change of circumstances, or

(d) other matters,

as it thinks just.

(8) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as is reasonably practicable after the change, apply to the court for the order or any part of it to be discharged or varied.

(9) The administrator must, as soon as is reasonably practicable after the making of an order under paragraph (8) —

(a) deliver a copy of the statement of affairs and any statement of concurrence to the extent provided by the order to the registrar of companies,

(b) place a copy of the order in the sederunt book together with a copy of the statement of affairs and any statement of concurrence to the extent no longer subject to the order under paragraph (2) .

(10) When the statement of affairs or a statement of concurrence is delivered to the registrar of companies in accordance with paragraph (9)(a) , the administrator must, where they have sent a statement of proposals under paragraph 49, deliver to the creditors and the customers a copy or summary of the statement of affairs and any statement of concurrence as delivered to the registrar of companies.

Section 21 Release from duty to submit statement of affairs

(1) The power of the administrator under paragraph 48(2) to revoke a requirement to submit a statement of affairs or to extend the period within which it must be submitted may be exercised upon the administrator’s own initiative, or at the request of any nominated person who has been required to provide the statement of affairs.

(2) The nominated person may, if they request a revocation or extension and it is refused by the administrator, apply to the court for it and when such an application is made, the period referred to in paragraph 48(1) and rule 16(3)(b) is suspended pending the court’s decision.

(3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it without giving notice to any other party other than the applicant.

(4) The applicant must, at least fourteen days before any hearing, deliver to the administrator a notice stating the venue and accompanied by a copy of the application and of any evidence on which the applicant intends to rely.

(5) Where an application has been made under paragraph (2) , the FCA may be given notice of the hearing and may appear or be represented at the hearing or may make written representations.

(6) The administrator may appear and be heard on the application and, whether or not they appear, the administrator may lodge a written report of any matters which they consider ought to be drawn to the court’s attention.

(7) If a report is lodged under paragraph (6) , a copy of it must be delivered by the administrator to the applicant not later than five business days before the hearing.

(8) Copies of any order made on the application must be delivered by the court to the applicant and the administrator.

(9) On any application under this rule, the applicant’s costs must be paid in any event by the applicant and, unless the court otherwise orders, no allowance towards them must be made as an expense of the special administration.

(10) A copy of any order made on the application must be placed in the sederunt book.

Section 22 Expenses of statement of affairs

(1) A nominated person making the statement of affairs ... or a relevant person making a statement of concurrence must be allowed and paid by the administrator as an expense of the special administration, any expenses incurred by the nominated person or 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 nominated person or a relevant person from any obligation with respect to—

(a) the preparation, verification and submission of the statement of affairs or a statement of concurrence,

(b) the provision of information to the administrator.

Section 23 Submission of accounts

(1) Any of the persons specified in section 235(3) of the IA 1986 must, at the request of the administrator, provide the administrator with the institution’s accounts as at such date and for such period as the administrator may specify.

(2) The period specified may begin from a date up to 3 years preceding the date the institution entered special administration, or from an earlier date to which the audited accounts of the institution were last prepared.

(3) The court may, on the administrator’s application, require accounts for an earlier period.

(4) Rule 22 applies (with the necessary modification) in relation to the accounts to be provided under this rule as it applies to the statement of affairs.

(5) The accounts must (if the administrator so requires) be verified by a statutory declaration and (whether or not so verified) be delivered within twenty-one days of the request under paragraph (1) (or such longer period as the administrator may allow).

Section 24 Administrator’s proposals

(1) The administrator must under paragraph 49 (or regulation 39 where the FCA has given a direction under regulation 38 which has not been withdrawn) make a statement of proposals, which is required by paragraph 49(4) to be delivered to the registrar of companies, creditors, every customer of whose claim the administrator is aware and who the administrator has a means of contacting, the FCA and members.

(2) In addition to the information required by paragraph 49 (or regulation 39, if applicable), 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 institution,

(c) details of the administrator’s appointment (including the date of appointment and details of who applied for the appointment),

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

(e) the names of the directors and secretary of the institution and details of any shareholdings in the institution they have,

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

(g) if a statement of affairs has been submitted—

(i) a copy or summary of it, except so far as an order under rule 20 limits disclosure of it, and excluding any schedule referred to in rule 17(5)(b) or rule 18(3)(a) or the particulars relating to creditors or customers contained in any such schedule,

(ii) any comments which the administrator may have on the statement of affairs,

(h) if an order limiting the disclosure of the statement of affairs has been made under rule 20, a statement of that fact, as well as—

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

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

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

(i) subject to sub-paragraphs (j) and (k) , if a full statement of affairs is not submitted, or if no statement of affairs is submitted, the name, postal address and the amount of the debt owing to each creditor of the institution including details of any security held and the value of any such security,

(j) sub-paragraph (k) applies where the particulars required by sub-paragraph (i) relate to creditors who are—

(i) employees or former employees of the institution, or

(ii) consumers claiming amounts paid in advance for the supply of goods or services,

(k) where this paragraph applies—

(i) the particulars required under sub-paragraph (i) must state separately for each of sub-paragraphs (j)(i) and (j)(ii) the number of such creditors and the total of the debts owed to them,

(ii) the particulars required by sub-paragraph (i) in respect of such creditors under sub-paragraphs (j)(i) and (j)(ii) must be set out in separate schedules,

(l) subject to sub-paragraph (m) , if a full statement of affairs is not submitted, or if no statement of affairs is submitted, the name and (to the extent known to the administrator after making all reasonable enquiries) the contact details of each customer of the institution and each customer’s relevant funds claim together with—

(i) details as to any security interest held by the institution or another person in respect of the asset pool,

(ii) details of the asset pool and the measures used by the institution to safeguard relevant funds,

(m) where customers are individuals—

(i) the particulars required under sub-paragraph (l) must state separately the number of such customers and the total of the debts owed to them,

(ii) the remaining details required under sub-paragraph (l) in relation to such customers must be set out in a separate schedule,

(n) if no statement of affairs is submitted, details of the financial position of the institution at the latest practicable date (which must, unless the court otherwise orders, be a date not earlier than that on which the institution entered special administration) and an explanation as to why there is no statement of affairs,

(o) a statement of the basis upon which it is proposed that the administrator’s remuneration should be fixed under rule 129,

(p) a statement complying with paragraph (6) 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,

(q) details of whether (and why) the administrator proposes to apply to the court under section 176A(5) of the IA 1986 (unless the administrator intends to propose a company voluntary arrangement),

(r) an estimate of the value of the prescribed part for the purposes of section 176A of the IA 1986 (unless the institution intends to propose a company voluntary arrangement) certified as being made to the best of the administrator’s knowledge and belief,

(s) an estimate of the value of the institution’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,

(t) an explanation of the priority that has been given since the commencement of special administration to the special administration objectives (and where the FCA has given a direction under regulation 38, an explanation as to how this has dictated the priority given to a particular objective),

(u) the manner in which the affairs and business of the institution have been managed and financed since the date of the administrator’s appointment (including the reasons for and terms of any disposal of assets),

(v) 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 institution will be managed and financed if the administrator’s proposals are approved,

(w) details of any reconciliation undertaken by the administrator (whether under regulation 13 or otherwise),

(x) details of the steps taken by the administrator to constitute any asset pool,

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

(z) how it is proposed that the special administration shall end, in accordance with Objective 3,

(aa) any other information which the administrator thinks necessary to enable creditors and customers to decide whether or not to approve the statement of proposals.

(3) Subject to paragraph (4) , the administrator must not—

(a) disclose any schedule or any of the details contained in any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) to any person,

(b) send or deliver any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) with a statement of proposals or revised statement of proposals to any person (including the registrar of companies) or enter any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) in the sederunt book.

(4) Following a written request from the FCA, the administrator must, as soon as is reasonably practicable, send or deliver to the FCA a copy of any schedule provided under paragraph (2)(k)(ii) or paragraph (2)(m)(ii) .

(5) In this Part—

(a) “pre-administration costs” are—

(i) fees charged,

(ii) expenses incurred,

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

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

(6) 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 institution 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 costs incurred in connection with the pursuit of Objective 1,

(ii) the costs incurred in connection with the pursuit of Objectives 2 and 3,

(iii) the fees charged by the administrator,

(iv) the expenses incurred by the administrator,

(v) 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),

(vi) 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) ),

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

(i) subject to approval under rule 97 ,

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

(7) The statement of proposals—

(a) may exclude information the disclosure of which could seriously prejudice the commercial interests of the institution,

(b) must include a statement of any exclusion.

(8) In addition to the standard contents, a notice published by the administrator under paragraph 49(6) must—

(a) identify the proceedings,

(b) be advertised in such manner as the administrator thinks fit,

(c) be published as soon as is reasonably practicable after the administrator has delivered the statement of proposals to the institution’s creditors and customers but no later than eight weeks (or such other period as may be agreed by the creditors and customers or as the court may order) from the date on which the institution entered special administration.

(9) In addition to the standard contents, a notice published by the administrator under paragraph 49(6) that the statement of proposals is to be provided free of charge to a payment system operator must—

(a) identify the proceedings,

(b) include a statement confirming that a copy of the statement of proposals will also be provided free of charge to the Payment Systems Regulator if it applies in writing to a specified address,

(c) be advertised in such a manner as the administrator thinks fit,

(d) be published as soon as is reasonably practicable after the administrator has delivered the statement of proposals to the institution’s creditors and customers but no later than eight weeks (or such other period as may be agreed by the creditors and customers or as the court may order) from the date on which the institution entered special administration.

(10) 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 must as soon as is reasonably practicable after the order has been made deliver a notice of the extension to—

(a) every creditor of the institution of whose address the administrator is aware,

(b) every customer of the institution who the administrator has a means of contacting and of whose relevant funds claim the administrator is aware,

(c) the members of the institution of whose address the administrator is aware,

(d) any relevant payment system operator,

(e) the registrar of companies,

(f) the FCA.

(11) A notice under paragraph (10) must—

(a) identify the proceedings,

(b) state the date to which the court has ordered an extension,

(c) contain the registered office of the institution.

(12) The administrator is taken to have complied with paragraph (10)(c) if the administrator publishes a notice which—

(a) contains the standard contents,

(b) contains the information in paragraph (9) ,

(c) is advertised in such a manner as the administrator thinks fit,

(d) states that the member may request in writing a copy of the notice of the extension, and states the address to which to write,

(e) is published as soon as is reasonably practicable after the administrator has delivered the notice of the extension to the institution’s creditors and customers.

(13) The administrator is taken to have complied with paragraph (10)(d) if the administrator publishes a notice which—

(a) contains the standard contents,

(b) contains the information in paragraph (9) ,

(c) is advertised in such a manner as the administrator thinks fit,

(d) states that the payment system operator may request in writing a copy of the notice of the extension free of charge, and states the address to which to write,

(e) is published as soon as is reasonably practicable after the administrator has delivered the notice of the extension to the institution’s creditors and customers.

Section 25 Limited disclosure of the statement of proposals

(1) Where the administrator thinks that it would prejudice the conduct of the special administration (or might reasonably be expected to lead to violence against any person) for any of the matters specified in rule 24(2)(i) to (n) to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of any specified part of the statement of proposals.

(2) The court may, on such application, order that some or all of the specified part of the statement must not be sent to the registrar of companies or to creditors, customers or members of the institution as otherwise required by paragraph 49(4) or to a payment system operator or to the Payment Systems Regulator or entered in the sederunt book.

(3) The administrator must as soon as is reasonably practicable deliver to the persons specified in paragraph (2) the statement of proposals (to the extent provided by the order) and an indication of the nature of the matter in relation to which the order was made.

(4) The administrator must also deliver a copy of the order to the registrar of companies and must place a copy in the sederunt book.

(5) A creditor who seeks disclosure of a part of the statement of proposals in relation to which an order has been made under this rule may apply to the court for an order that the administrator disclose it, and the application must be supported by written evidence in the form of an affidavit.

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

(7) The court may make any order for disclosure subject to such conditions as to—

(a) confidentiality,

(b) duration,

(c) the scope of the order in the event of any change of circumstances, or

(d) other matters,

as it thinks just.

(8) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as is reasonably practicable after the change, apply to the court for the order or any part of it to be discharged or varied.

(9) The administrator must, as soon as is reasonably practicable after the making of an order under paragraph (7) —

(a) deliver to the persons specified in paragraph (2) a copy of the statement of proposals to the extent allowed by the order,

(b) place a copy of the order in the sederunt book together with a copy of the statement of proposals to the extent no longer subject to the order under paragraph (2) .

Section 26 Initial meeting

(1) As soon as is reasonably practicable after an invitation to the initial meeting has been sent out in accordance with paragraph 51(1), the administrator must have gazetted—

(a) that an initial meeting of creditors and customers is to take place,

(b) the venue fixed for the meeting,

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

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

(3) Where the court orders an extension to the period set out in paragraph 51(2)(b), the administrator must notify each person who was sent notice in accordance with paragraph 49(4).

(4) This rule does not apply where the FCA has given a direction under regulation 38 and the direction has not been withdrawn.

Section 27 Notice to officers

(1) Where rule 26 applies, notice to attend the meeting must be given to every present or former officer of the institution whose presence the administrator thinks is required at the same time that notice is sent to creditors and customers.

(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 institution,

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

(d) details of the venue of the meeting.

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

Section 28 Business of the initial meeting

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

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

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

(2) Creditors and customers must vote as separate classes on whether to approve the proposals.

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

(4) If the proposals 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.

(5) 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 29 applies.

(6) This rule does not apply where the FCA has given a direction under regulation 38 and the direction has not been withdrawn.

Section 29 Adjournment of meeting to approve the statement of proposals

(1) If, at the initial meeting of creditors and customers, there is not the requisite majority for approval of the statement of proposals (with or without any modifications) for each class of voter, the administrator may, and must if a resolution is passed to that effect, adjourn the meeting for not more than fourteen 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 fourteen 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, statements of claim 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 must 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 customers for approval of the statement of proposals, the administrator may apply to the court for directions under paragraph 63.

Section 30 Revision of the statement of proposals

(1) The administrator must under paragraph 54 (or regulation 40 where the FCA has given a direction under regulation 38 which has not been withdrawn) make a statement setting out the proposed revisions to the statement of proposals (“the revised statement”).

(2) The revised statement, which must be delivered in accordance with paragraphs 54(2)(b) and (c), must 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 institution,

(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 institution and details of any shareholdings in the institution 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 upon the customers (as the case may be),

(h) any other information that the administrator thinks necessary to enable creditors and customers (where applicable) to decide whether or not to approve the proposed revisions.

(3) A copy of the revised statement must be delivered to the FCA at the same time as the revised statement is delivered to others in accordance with paragraph 54(2).

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

(5) Subject to paragraph 54(3), within five business days of delivering the revised statement the administrator must deliver a copy of the statement to every member of the institution of whose address the administrator is aware.

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

(7) The notice must be published as soon as is reasonably practicable after the administrator delivers the revised statement in accordance with paragraph 54(2) and, in addition to the standard contents, must—

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

(b) state the address to which to write.

(8) A copy of the revised statement must be placed in the sederunt book.

(9) Paragraph (4) shall not apply where the FCA has given a direction under regulation 38 which has not been withdrawn at the time the administrator proposes a revision to the statement of proposals.

(10) In this rule, a reference to—

(a) “paragraph 54(2)” also includes a reference to regulation 40(4),

(b) “paragraph 54(3)” also includes a reference to regulation 40(5).

Section 31 Meeting to approve the revised statement of proposals

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

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

(a) creditors and customers must vote as separate classes on whether to approve the revisions,

(b) the revisions must not be approved unless both classes of voter have voted to approve them,

(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) If the administrator is unable to get the requisite majority of creditors or customers for approval of the revised statement of proposals, the administrator may apply to the court for directions under paragraph 55.

(4) Where the FCA has given a direction under regulation 38 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.

Section 32 Notice to creditors and customers

(1) As soon as is reasonably practicable after the conclusion of a meeting of creditors, of customers, or of creditors and customers to consider the administrator’s proposals or revised proposals, the administrator must—

(a) deliver notice of the result of the meeting to every person who received a notice of the meeting,

(b) deliver notice of the result of the meeting to the Payment Systems Regulator and any payment system operator,

(c) attach a copy of the proposals considered at the meeting to the notice sent to each creditor and each customer who did not receive notice of the meeting and of whose claim the administrator has subsequently become aware,

(d) lodge with the court a copy of the proposals considered at the meeting and notice of the result of the meeting,

(e) place a copy of the notice of the result of the meeting along with a copy of the proposals which were considered at that meeting in the sederunt book.

(2) The administrator is taken to have complied with paragraph (1)(b) if the administrator publishes a notice which—

(a) contains the standard contents,

(b) identifies the proceedings,

(c) contains the registered office of the institution,

(d) is advertised in such manner as the administrator thinks fit,

(e) states that the payment system operator may request in writing a copy of the notice of the result of the meeting free of charge, and states the address to which to write,

(f) is published as soon as is reasonably practicable after the administrator has delivered the notice of the result of the meeting to those who received a copy of the original proposals.

Section 33 Meetings generally

Except where different provision is made in the Regulations or these Rules, this Chapter applies to meetings called by the administrator—

(a) under paragraph 51, 54(2) or 62,

(b) following a request or a direction from the court under paragraph 56.

Section 34 Venue

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

(2) Meetings must be called 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 35 Notice of meeting by individual notice: when and where sent

(1) This rule applies except where the court orders under rule 37 that notice of a meeting be given by advertisement only.

(2) Notice calling a meeting must be delivered at least fourteen 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 institution at the date when it entered special administration (except for those who have subsequently been paid in full),

(b) for a meeting involving the customers, to all customers of whose relevant funds claim the administrator is aware and has a means of contacting (except for those who have no outstanding relevant funds claims),

(c) for a meeting of contributories, to every person appearing (by the institution’s books or otherwise) to be a contributory of the institution and of whose address the administrator is aware.

(4) The FCA must also be notified of any such meeting.

Section 36 Notice of meeting by individual notice: content and accompanying documents

(1) This rule applies except where the court orders under rule 37 that notice of a meeting be given by advertisement only.

(2) Notice calling a meeting must specify the purpose of and venue for the meeting, the persons entitled to attend and vote at the meeting, and state that a creditor or customer (as the case may be) wishing to vote at the meeting must lodge a statement of claim (including relevant funds claims) and (if applicable) a proxy at or before the date fixed for the meeting.

(3) A blank proxy complying with rule 88 must be sent out with every notice calling a meeting.

Section 37 Notice of meeting by advertisement only

(1) The court may order that notice of any meeting under these Rules be given by advertisement and not by individual notice to the persons concerned.

(2) In considering whether so to order, the court must have regard to—

(a) the cost of advertisement,

(b) the amount of assets available,

(c) the extent of the interest of creditors, customers, members and contributories or any particular class of them.

Section 38 Content of notice for meetings

Notice of a meeting of the creditors, the customers or a meeting of creditors and customers, must contain the following information—

(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 institution,

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

(d) details of the venue of the meeting,

(e) whether the meeting is—

(i) an initial creditors’ and customers’ meeting under paragraph 51,

(ii) to consider revisions to the administrator’s proposals under paragraph 54(2),

(iii) a further creditors’, or creditors and customers’, or customers’ meeting under paragraph 56,

(iv) a meeting under paragraph 62,

unless the court orders that notice be given by advertisement only in accordance with rule 37.

Section 39 Gazetting and advertisement of meetings

(1) The administrator, in calling a meeting under these Rules, must have gazetted a notice which, in addition to the standard contents, must state—

(a) that a meeting of—

(i) creditors,

(ii) customers,

(iii) creditors and customers,

(iv) members, or

(v) contributories

is to take place,

(b) the venue fixed for the meeting,

(c) the purpose of the meeting,

(d) the time and date by which, and place at which, those attending who wish to vote must lodge proxies and (in the case of a meeting of creditors, customers or both) statements of claim.

(2) Notice under this rule must be gazetted before or as soon as is reasonably practicable after notice is given to those attending.

(3) Information to be gazetted under this rule may also be advertised in such other manner as the administrator thinks fit.

Section 40 Non-receipt of notice of meeting

Where, in accordance with the Regulations or these Rules, a meeting is called by notice, the meeting is presumed to have been duly called and held, even if not all those to whom the notice is to be given have received it.

Section 41 Requisition of meetings

(1) A request for a requisitioned meeting must contain the following information—

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

(b) the full name, registered address and registered number of the institution,

(c) the full name and address of the creditor requesting the meeting,

(d) the full amount of that creditor’s claim.

(2) The request for a requisitioned meeting must include a statement of the purpose of the proposed meeting and—

(a) a list of the creditors concurring with the request and of the amounts of their respective claims, and written confirmation of concurrence from each creditor concurring, or

(b) a statement that the requesting creditor’s debt alone is sufficient without the concurrence of other creditors.

(3) A requisitioned meeting must be held within twenty-eight days of the date of the administrator’s receipt of the notice.

(4) The administrator—

(a) must notify the FCA of the details and purpose of the requisitioned meeting,

(b) may, if the administrator thinks appropriate, summon customers to the requisitioned meeting.

Section 42 Expenses of requisitioned meetings

(1) The expenses of calling and holding a requisitioned meeting must be paid by the person who makes the request, who must deposit with the administrator caution for their payment.

(2) The sum to be deposited by way of caution must be such sum as the administrator may determine, and the administrator must not act without the deposit having been made.

(3) The meeting may resolve that the expenses of calling and holding it are to be payable out of the assets of the institution as an expense of the special administration.

(4) To the extent that any deposit made under this rule is not required for the payment of expenses of calling and holding the meeting, it must be repaid to the person who made it.

Section 43 Quorum at meetings

(1) A meeting of creditors, customers, creditors and customers or contributories is not competent to act unless a quorum is present.

(2) A quorum is—

(a) in the case of a meeting of creditors, at least one creditor entitled to vote,

(b) in the case of a meeting of customers, at least one customer entitled to vote,

(c) in the case of a meeting of creditors and customers, at least one creditor and one customer who are each entitled to vote,

(d) in the case of a meeting of contributories, at least two contributories so entitled, or all the contributories, if their number does not exceed two.

(3) For the purpose of this rule, the reference to the creditor, customer or contributories necessary to constitute a quorum is not confined to those persons present or duly represented in accordance with section 434B of the IA 1986 or under section 323 of the CA 2006 but includes those represented by proxy by any person (including the chair).

(4) Where—

(a) the provisions of this rule as to a quorum being present are satisfied by the attendance of—

(i) the chair alone,

(ii) one other person in addition to the chair,

(b) the chair is aware, by virtue of statements of claim and proxies received or otherwise, that one or more additional persons would, if attending, be entitled to vote,

the meeting must not commence until at least the expiry of 15 minutes after the time appointed for its commencement.

Section 44 Chair at meetings

(1) At any meeting of the creditors, the customers, or creditors and customers summoned by the administrator, the administrator must be the chair, or a person nominated by the administrator in writing to act in the administrator’s place.

(2) A person so nominated must be—

(a) one who is qualified to act as an insolvency practitioner in relation to the institution, or

(b) an employee of the administrator or the administrator’s firm who is experienced in insolvency matters.

(3) Where the chair holds a proxy which includes a requirement to vote for a particular resolution and no other person proposes that resolution—

(a) the chair must propose it unless the chair considers that there is good reason for not doing so,

(b) if the chair does not propose it, the chair must as soon as is reasonably practicable after the meeting notify the principal of the reason why not.

Section 45 Adjournment by chair

(1) The chair may, and must if the meeting so resolves, adjourn the meeting to such time and place as seems to the chair to be appropriate in the circumstances.

(2) An adjournment under this rule must not be for a period of more than fourteen days, subject to any direction by the court.

(3) If there are further adjournments, the final adjournment must not be to a day later than fourteen days after the date on which the meeting was originally held.

(4) Rule 34 applies with regard to the venue fixed for a meeting adjourned under this rule.

(5) This rule does not apply to the initial meeting of creditors and customers.

Section 46 Adjournment in absence of chair

(1) If within 30 minutes from the time fixed for commencement of a meeting there is no person present to act as chair, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

(2) If within 30 minutes from the time fixed for the commencement of the meeting those persons attending the meeting do not constitute a quorum, the chair may adjourn the meeting to such time and place as the chair may appoint.

Section 47 Statements of claim and proxies in adjournment

Where a meeting under these Rules is adjourned, statements of claim and proxies may be used if lodged before the resumption of the adjourned meeting.

Section 48 Suspension

Once only in the course of a meeting, the chair may, without an adjournment, declare it suspended for any period up to one hour.

Section 49 Venue and conduct of company meetings

(1) Where the administrator calls a meeting of members of the institution, the administrator must fix a venue for it having regard to the convenience of the members of the institution.

(2) The chair of the meeting must be the administrator or a person nominated by the administrator in writing to act in the administrator’s place.

(3) A person so nominated must be—

(a) one who is qualified to act as an insolvency practitioner in relation to the institution, or

(b) an employee of the administrator or the administrator’s firm who is experienced in insolvency matters.

(4) If within 30 minutes after the time fixed for commencement of the meeting there is no person present to act as chair, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

(5) Subject to anything to the contrary in the Regulations and these Rules, the meeting must be called and conducted in accordance with the law of Scotland, including any applicable provision in or made under CA 2006.

(6) The chair of the meeting must ensure that minutes of its proceedings are entered in the institution’s minute book and a copy placed in the sederunt book.

Section 50 Entitlement to vote (creditors)

(1) A creditor is entitled to vote at a meeting of creditors, or at a meeting of creditors and customers, only if—

(a) the creditor has delivered to the administrator a statement of claim and documentary evidence of the debt which is claimed as due to that person from the institution, including any calculation for the purposes of rule 51 or rule 52,

(b) the details were given to the administrator at or before the meeting,

(c) the claim has been admitted for the purposes of entitlement to vote,

(d) there has been lodged with the administrator any proxy intended to be used on behalf of that person.

(2) Where under rule 54(4) the administrator has become aware that a customer has a shortfall claim—

(a) the administrator must treat the customer as having provided details of the shortfall claim under paragraphs (1)(a) and (b),

(b) the claim must be admitted under paragraph (1)(c) for the purposes of entitlement to vote,

(c) the customer does not need to submit a separate claim under paragraph (1) in order to be entitled to vote as a creditor at a meeting of creditors and customers in respect of its shortfall claim but a customer should, if relevant, lodge a proxy in accordance with paragraph (1)(d).

(3) For the purposes of this Chapter, written details of a claim, once lodged or given in accordance with this rule, need not be lodged or given again.

(4) The chair of a meeting of creditors, or of a meeting of creditors and customers, may dispense with the requirement to produce documentary evidence of debt in paragraph (1)(a) .