142.147-153

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services (Banking Reform) Bill

147

“appeal” means an appeal made in accordance with section (Appeals

to Competition and Markets Authority);

“appeal rules” means rules of procedure under paragraph 16;

“appellant” has the meaning given by paragraph 3(4);

“authorised member of the CMA”—

(a)
in relation to a power exercisable in connection with an

appeal in respect of which a group has been constituted by

the chair of the CMA under Schedule 4 to the Enterprise and

Regulatory Reform Act 2013, means a member of that group

who has been authorised by the chair of the CMA to exercise

that power;

(b)
in relation to a power exercisable in connection with an

application for permission to bring an appeal, or otherwise

in connection with an appeal in respect of which a group has

not been so constituted by the chair of the CMA, means—

(i)
any member of the CMA Board who is also a

member of the CMA panel, or

(ii)
any member of the CMA panel authorised by the

Treasury (whether generally or specifically) to

exercise the power in question;

“CMA” means the Competition and Markets Authority;

“CMA Board” and “CMA panel” have the same meaning as in

Schedule 4 to the Enterprise and Regulatory Reform Act 2013;

“group” means a group selected in accordance with paragraph 6;

“statement of truth”, in relation to the production of a statement or

provision of information by a person, means a statement that the

person believes the facts stated in the statement or information to

be true;

“working day” means any day other than—

(a)
Saturday or Sunday;

(b)
Christmas Day or Good Friday;

(c)
a day which is a bank holiday under the Banking and

Financial Dealings Act 1971 in any part of the United

Kingdom.

      (2)
References in this Schedule to a party to an appeal are references to—

(a)
the appellant, or

(b)
the Payment Systems Regulator.”
177
Insert the following new Schedule—

“Conduct of FMI administration

1
The following provisions of this Schedule provide for—

(a)
the general powers and duties of FMI administrators (by

application of provisions about administrators), and

(b)
the general process and effects of FMI administration (by

application of provisions about administration).

2
The provisions set out in the Tables apply in relation to FMI

administration as in relation to administration, with—

(a)
the modifications set out in paragraph 3,

(b)
any other modification specified in the Tables, and

148

(c)
any other necessary modification.

3
The modifications are that—

(a)
a reference to the administrator is a reference to the FMI

administrator,

(b)
a reference to administration is a reference to FMI

administration,

(c)
a reference to an administration application is a reference to an

FMI administration application,

(d)
a reference to an administration order is a reference to an FMI

administration order,

(e)
a reference to a company is a reference to the infrastructure

company, and

(f)
a reference to the purpose of administration (other than the

reference in paragraph 111(1) of Schedule B1) is a reference to the

objective in section (Objective of FMI administration).

4
Powers conferred by this Part of this Act and by the 1986 Act (as applied)

are in addition to, and not in restriction of, any existing powers of

instituting proceedings against any contributory or debtor of an

infrastructure company, or the estate of any contributory or debtor, for

the recovery of any call or other sum.

5
A reference in an enactment or other document to anything done under

a provision applied by this Part of this Act includes a reference to the

provision as applied.

TABLE 1 OF APPLIED PROVISIONS

SCHEDULE B1 TO THE INSOLVENCY ACT 1986

Provision of
Subject
Modification

Schedule B1

Para.
Dismissal of pending winding-

40(1)(a)
up petition

Para. 41
Dismissal of administrative or

other receiver

Para. 42
Moratorium on insolvency
Ignore sub-paras. (4) and (5).

proceedings

Para. 43
Moratorium on other legal

process

Para.
Interim moratorium

44(1)(a) and

(5)

Para. 46
Announcement of appointment
Ignore sub-para. (6)(b) and (c).

Paras. 47
Statement of affairs

and 48

Para. 49
Administrator’s proposals
(a)
The administrator must obtain the

approval of the Bank of England to

any proposals under sub-para. (1).

(b)
Treat the reference in sub-para.

(2)(b) to the objective mentioned in

para. 3(1)(a) or (b) as a reference to

the objective in section (Objective of

FMI administration) of this Act.

(c)
Ignore sub-para. (3)(b).

Para. 59
General powers

Para. 60 and
General powers
The exercise of powers under Schedule 1 is

Schedule 1

subject to section (Objective of FMI

administration) of this Act.

Para. 61
Directors

Para. 62
Power to call meetings of

creditors

Para. 63
Application to court for
(a)
Before making an application in

directions
reliance on this paragraph the FMI

administrator must give notice to

the Bank of England, which is to be

entitled to participate in the

proceedings.

(b)
In making directions the court must

have regard to the objective in

section (Objective of FMI

administration) of this Act.

Para. 64
Management powers

Para. 65
Distribution to creditors

Para. 66
Payments

Para. 67
Taking custody of property

Para. 68
Management
(a)
Ignore sub-paras. (1) and (3).

(b)
The Bank of England may apply to

the court for the variation or

revocation of any directions given

by the court.

Para. 69
Agency

Para. 70
Floating charges

Para. 71
Fixed charges

Para. 72
Hire-purchase property

Para. 73
Protection for secured and

preferential creditors

Para. 74
Challenge to administrator’s
For sub-para. (2) there is to be taken to be

conduct
substituted—


“(2) Where a company is in FMI

administration, a creditor or

member of the company may apply

to the court claiming that the FMI

administrator is conducting himself

or herself in a manner preventing

the achievement of the objective of

the FMI administration as quickly

and efficiently as is reasonably

practicable.”

Para. 75
Misfeasance
In addition to applications that may anyway

be made under para. 75, an application may

be made by the FMI administrator or the

Bank of England.

Para. 79
Court ending administration on
For sub-paras. (1) to (3) there are to be taken

application of administrator
to be substituted—


“(1) On an application made by a

person mentioned in sub-paragraph

(2), the court may provide for the

appointment of an FMI

administrator of a company to cease

to have effect from a specified time.


(2) The persons who may apply to

the court under sub-paragraph (1)

are—


(a) the Bank of England;


(b) with the consent of the Bank, the

FMI administrator.”

Para. 84
Termination: no more assets for

distribution

Para. 85
Discharge of administration

order

Para. 86
Notice to Companies Registrar

of end of administration

Para. 87
Resignation
An FMI administrator may not resign under

para. 87 without giving 28 days’ notice of the

intention to do so to the Bank of England.

Para. 88
Removal
An application for an order removing an FMI

administrator from office may be made only

by or with the consent of the Bank of

England.

Para. 89
Disqualification
The notice under sub-para. (2) must be given

to the Bank of England.

Paras. 90
Replacement
(a)
Para. 91(1) applies as if the only

and 91

person who could make an

application were the Bank of

England.

(b)
Ignore para. 91(2).

Para. 98
Discharge
Ignore sub-paras. (2)(b) and (3).

Para. 99
Vacation of office: charges and
In the application of sub-para. (3), payments

liabilities
may be made only—

(a)
in accordance with directions of the

Bank of England, and

(b)
if the Bank is satisfied that they will

not prejudice the objective in section

(Objective of FMI administration) of

this Act.

Paras. 100 to
Joint administrators
An application under para. 103 may be made

103

only by the Bank of England.

Para. 104
Validity

Para. 106
Fines

(and section

430 and

Schedule 10)

Paras. 107 to
Extension of time limits

109

Para. 110
Amendment of provisions about
An order under para. 110 may amend a

time
provision of the Schedule as it applies by

virtue of this Act (whether or not in the same

way as it amends the provision as it applies

otherwise).

Para. 111
Interpretation

Paras. 112 to
Scotland

116

149

150

151

TABLE 2 OF APPLIED PROVISIONS

OTHER PROVISIONS OF THE INSOLVENCY ACT 1986

Section
Subject
Modification or comment

Section 233
Utilities

Section 234
Getting in company’s property

Section 235
Duty to co-operate with office-

holder

Section 236
Inquiry into company’s dealings

Section 237
Section 236: enforcement by

court

Section 238
Transactions at an undervalue

(England and Wales)

Section 239
Preferences (England and

Wales)

Section 240
Ss. 238 and 239: relevant time

Section 241
Orders under ss. 238 and 239
(a)
In considering making an order in

reliance on section 241 the court

must have regard to the objective in

section (Objective of FMI

administration) of this Act.

(b)
Ignore subsections (2A)(a) and (3) to

(3C).

Section 242
Gratuitous alienations

(Scotland)

Section 243
Unfair preferences (Scotland)
In considering the grant of a decree under

subsection (5) the court must have regard to

the objective in section (Objective of FMI

administration) of this Act.

Section 244
Extortionate credit transactions

Section 245
Avoidance of floating charges

Section 246
Unenforceability of liens

Sections 386
Preferential debts

and 387, and

Schedule 6

(and

Schedule 4

to the

Pension

Schemes Act

1993)

Section 389
Offence of acting without being
Treat references to acting as an insolvency

qualified
practitioner as references to acting as an FMI

administrator.

Section 390
Persons not qualified to act
Treat references to acting as an insolvency

practitioner as references to acting as an FMI

administrator.

Section 391
Recognised professional bodies
An order under section 391 has effect in

relation to any provision applied for the

purposes of FMI administration.

Sections 423
Transactions defrauding
In considering granting leave under section

to 425
creditors
424(1) or making an order in reliance on

section 425, the court must have regard to the

objective in section (Objective of FMI

administration) of this Act.

Sections 430
Offences

to 432 and

Schedule 10

152

6    (1)
The Treasury may by order amend this Schedule so as to make further

modifications.

      (2)
The further modifications that may be made are confined to such

modifications of—

(a)
the 1986 Act, or

(b)
other enactments passed or made before this Act that relate to

insolvency or make provision by reference to anything that is or

may be done under the 1986 Act,


as the Treasury consider appropriate in relation to any provision made

by or under this Part of this Act.

153

      (3)
An order under this paragraph may also make modifications of the

provisions of this Schedule.”
178
Insert the following new Schedule—

“Financial market infrastructure transfer schemes

Application of Schedule

1
This Schedule applies where—

(a)
the court has made an FMI administration order in relation to a

company (“the old company”), and

(b)
it is proposed that a transfer within section (Objective of FMI

administration)(5) be made to another company (“the new

company”).

Interpretation of Schedule

2
In this Schedule—

“FMI transfer scheme” has the meaning given by paragraph 4(1);

“the new company” and “the old company” are to be read in

accordance with paragraph 1;

“third party”, in relation to an FMI transfer scheme or a

modification of such a scheme, means a person other than the old

company or the new company.

FMI administrator to act on behalf of old company

3
It is for the FMI administrator, while the FMI administration order is in

force, to act on behalf of the old company in the doing of anything that it

is authorised or required to do by or under this Schedule.

Making of FMI transfer schemes

4    (1)
The old company may—

(a)
with the consent of the new company, and

(b)
for the purpose of giving effect to the proposed transfer,


make a scheme under this Schedule for the transfer of property, rights

and liabilities from the old company to the new company (an “FMI

transfer scheme”).

      (2)
Such a scheme may be made only at a time when the FMI administration

order is in force in relation to the old company.

      (3)
An FMI transfer scheme may set out the property, rights and liabilities

to be transferred in one or more of the following ways—

(a)
by specifying or describing them in particular,

(b)
by identifying them generally by reference to, or to a specified

part of, the undertaking of the old company, or

(c)
by specifying the manner in which they are to be determined.

      (4)
An FMI transfer scheme is to take effect in accordance with paragraph 7

at the time appointed by the court.

      (5)
But the court must not appoint a time for a scheme to take effect unless

that scheme has been approved by the Bank of England.