Corporate Insolvency and Governance Bill (HC Bill 128)

Corporate Insolvency and Governance BillPage 220

(ii) and is the subject of recurrent dealing in the
swaps or derivatives markets;

(f) an inter-bank borrowing agreement where the term of the
borrowing is three months or less;

(g) 5a master agreement for any of the contracts or agreements
referred to in paragraphs (a) to (f).

(3) For the purposes of this paragraph “commodities” includes—

(a) units recognised for compliance with the requirements of
EU Directive 2003/87/EC establishing a scheme for
10greenhouse gas emission allowance trading,

(b) allowances under paragraph 5 of Schedule 2 to the Climate
Change Act 2008 relating to a trading scheme dealt with
under Part 1 of that Schedule (schemes limiting activities
relating to emissions of greenhouse gas), and

(c) 15renewables obligation certificates issued—

(i) by the Gas and Electricity Markets Authority under
an order made under section 32B of the Electricity
Act 1989, or

(ii) by the Northern Ireland Authority for Utility
20Regulation under the Energy (Northern Ireland)
Order 2003 (S.I. 2003/419 (N.I. 6)S.I. 2003/419 (N.I. 6)) and pursuant to
an order made under Articles 52 to 55F of that
Order.

Securities financing transactions

14 (1) 25This paragraph applies to a securities financing transaction.

(2) “Securities financing transaction” has the meaning given by
Article 3(11) of Regulation (EU) 2015/2365 on the transparency of
securities financing transactions.

(3) But for the purposes of that Article as it applies for the purposes of
30this paragraph, references to “commodities” in that Regulation are
to be taken as including the units, allowances and certificates
referred to in paragraph 13(3)(a) to (c).

Derivatives

15 This paragraph applies to a derivative, within the meaning given
35by Article 2(5) of Regulation (EU) No. 648/2012.

Spot contracts

16 (1) This paragraph applies to a spot contract.

(2) “Spot contract” has the meaning given by Article 7(2) or 10(2) of
Commission Delegated Regulation of 25.4.2016 supplementing
40Directive 2014/65/EU of the European Parliament and of the
Council as regards organisational requirements and operating
conditions for investment firms and defined terms for the
purposes of that Directive.

Corporate Insolvency and Governance BillPage 221

Capital market arrangements

17 This paragraph applies to a capital market arrangement within the
meaning given by paragraph 13(2) of Schedule ZA1.

Contracts forming part of a public-private partnership

18 5This paragraph applies to a contract forming part of a public-
private partnership project within the meaning given by
paragraph 16 of Schedule ZA1.

Part 4 Other exclusions
10Financial markets and insolvency

19 Nothing in section 233B affects the operation of—

(a) Part 7 of the Companies Act 1989 (financial markets and
insolvency),

(b) the Financial Markets and Insolvency Regulations 1996
15(S.I. 1996/1469S.I. 1996/1469),

(c) the Financial Markets and Insolvency (Settlement Finality)
Regulations 1999 (S.I. 1999/2979S.I. 1999/2979), or

(d) the Financial Collateral Arrangements (No.2) Regulations
2003 (S.I. 2003/3226S.I. 2003/3226).

20Set-off and netting

20 Nothing in section 233B affects any set-off or netting arrangements
(within the meanings given by section 48(1)(c) and (d) of the
Banking Act 2009).”

Part 2 25Consequential amendments

Amendments to Acts

2 In Schedule 15 to the Building Societies Act 1986 (application of companies
winding up legislation to building societies), after paragraph 32 insert—

“Protection of supplies

32A 30Section 233B of the Act (protection of supplies of goods and
services) does not apply.”

3 In Schedule 15A to the Building Societies Act 1986 (application of other
companies insolvency legislation to building societies), after paragraph 27F
insert—

35“Protection of supplies

27FA Section 233B of the Act (protection of supplies of goods and
services) is omitted.”

Corporate Insolvency and Governance BillPage 222

4 In Schedule 10 to the Friendly Societies Act 1992 (application of companies
winding up legislation to friendly societies), after paragraph 35 insert—

“Protection of supplies

35A Section 233B of the Act (protection of supplies of goods and
5services) does not apply.”

Amendments to subordinate legislation

5 In the Insolvent Partnerships Order 1994 (S.I. 1994/2421S.I. 1994/2421), in article 4(3)(a),
for “section 233 and section 233A” substitute “sections 233, 233A and 233B
and Schedule 4ZZA”.

6 10In Schedule 4 to the Limited Liability Partnerships Regulations 2001 (S.I.
2001/1090) (disapplications for Scotland), after the entry relating to section
233A insert—

7 In Schedule 2 to the Limited Liability Partnerships (Scotland) Regulations
2001 (S.S.I. 2001/128S.S.I. 2001/128), after the entry relating to section 233A insert—

8 15In Schedule 3 to the Co-operative and Community Benefit Societies and
Credit Unions (Arrangements, Reconstructions and Administration) Order
2014 (S.I. 2014/229S.I. 2014/229), after paragraph 3 insert—

3A Section 233B (protection of supplies of goods and services) does
not apply in relation to a registered society that is registered as a
20credit union.”

Section 16

SCHEDULE 13 Protection of supplies of goods and services: Northern Ireland

Part 1 Exclusions

1 25After Schedule 2 to the Insolvency (Northern Ireland) Order insert—

Article 197B

“Schedule 2ZZA Protection of supplies under Article 197B: exclusions

Part 1 Essential supplies
Essential supplies

1 (1) 30Article 197B(3) and (4) do not apply in relation to provision of a
contract if—

Corporate Insolvency and Governance BillPage 223

(a) the company becomes subject to a relevant insolvency
procedure as specified in Article 197B(2)(b) or (d), and

(b) the provision of the contract ceases to have effect under
Article 197A(1).

(2) 5Article 197B(7) does not apply in relation to a supply to the
company if—

(a) the company becomes subject to a relevant insolvency
procedure as specified in Article 197B(2)(b) to (f), and

(b) the supply is a supply mentioned in Article 197(3).

10Part 2 Persons involved in financial services
Introductory

2 Article 197B does not apply in relation to a contract for the supply
of goods or services to a company (“the company”) where any of
15paragraphs 3 to 11 applies.

Insurers

3 (1) This paragraph applies where either the company or the
supplier—

(a) carries on the regulated activity of effecting or carrying out
20contracts of insurance, and

(b) is not an exempt person in relation to that activity.

(2) In this paragraph—

  • “exempt person”, in relation to a regulated activity, has the
    meaning given by section 417 of the Financial Services and
    25Markets Act 2000;

  • “regulated activity” has the meaning given by section 22 of
    that Act, taken with Schedule 2 to that Act and any order
    under that section.

Banks

4 (1) 30This paragraph applies where either the company or the
supplier—

(a) has permission under Part 4A of the Financial Services and
Markets Act 2000 to carry on the regulated activity of
accepting deposits,

(b) 35is a banking group company within the meaning of Part 1
of the Banking Act 2009 (see section 81D of that Act), or

(c) has a liability in respect of a deposit which it accepted in
accordance with the Banking Act 1979 or the Banking Act
1987.

(2) 40In sub-paragraph (1)(a) “regulated activity” has the meaning
given by section 22 of the Financial Services and Markets Act 2000
2000, taken with Schedule 2 to that Act and any order under that
section.

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Electronic money institutions

5 This paragraph applies where either the company or the supplier
is an electronic money institution within the meaning of the
Electronic Money Regulations 2011 (S.I. 2011/99S.I. 2011/99) (see regulation 2
5of those Regulations).

Investment banks and investment firms

6 (1) This paragraph applies where either the company or the supplier
is an investment bank or an investment firm.

(2) In this paragraph—

  • 10“investment bank” means a company or other entity that has
    permission under Part 4A of the Financial Services and
    Markets Act 2000 to carry on the regulated activity of—

    (a)

    safeguarding and administering investments,

    (b)

    managing an AIF or a UCITS,

    (c)

    15acting as trustee or depositary of an AIF or a UCITS,

    (d)

    dealing in investments as principal, or

    (e)

    dealing in investments as agent;

  • “investment firm” has the same meaning as in the Banking
    Act 2009 (see section 258A of that Act), disregarding any
    20order made under section 258A(2)(b) of that Act;

  • “regulated activity” has the meaning given by section 22 of
    the Financial Services and Markets Act 2000, taken with
    Schedule 2 to that Act and any order under that section.

Payment institutions

7 25This paragraph applies where either the company or the supplier
is an authorised payment institution, a small payment institution
or a registered account information service provider within the
meaning of the Payment Services Regulations 2017 (S.I. 2017/752S.I. 2017/752)
(see regulation 2 of those Regulations).

30Operators of payment systems, infrastructure providers etc

8 This paragraph applies where either the company or the supplier
is—

(a) the operator of a payment system or an infrastructure
provider within the meaning of Part 5 of the Financial
35Services (Banking Reform) Act 2013 (see section 42 of that
Act), or

(b) an infrastructure company within the meaning of Part 6 of
that Act (see section 112 of that Act).

Recognised investment exchanges etc

9 40This paragraph applies where either the company or the supplier
is a recognised investment exchange, a recognised clearing house
or a recognised CSD within the meaning of the Financial Services
and Markets Act 2000 (see section 285 of that Act).

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Securitisation companies

10 This paragraph applies where either the company or the supplier
is a securitisation company within the meaning of the Taxation of
Securitisation Companies Regulations 2006 (S.I. 2006/3296S.I. 2006/3296) (see
5regulation 4 of those Regulations).

Overseas activities

11 This paragraph applies where either the company or the supplier
does or has done anything outside the United Kingdom which, if
done in the United Kingdom, would cause any of the preceding
10paragraphs of this Part of this Schedule to apply.

Part 3 Contracts involving financial services
Introductory

12 To the extent that anything to which any of paragraphs 13 to 18
15applies is a contract for the supply of goods or services, Article
197B does not apply in relation to it.

Financial contracts

13 (1) This paragraph applies to a financial contract.

(2) “Financial contract” means—

(a) 20a contract for the provision of financial services consisting
of—

(i) lending (including the factoring and financing of
commercial transactions),

(ii) financial leasing, or

(iii) 25providing guarantees or commitments;

(b) a securities contract, including—

(i) a contract for the purchase, sale or loan of a security
or group or index of securities;

(ii) an option on a security or group or index of
30securities;

(iii) a repurchase or reverse repurchase transaction on
any such security, group or index;

(c) a commodities contract, including—

(i) a contract for the purchase, sale or loan of a
35commodity or group or index of commodities for
future delivery;

(ii) an option on a commodity or group or index of
commodities;

(iii) a repurchase or reverse repurchase transaction on
40any such commodity, group or index;

(d) a futures or forwards contract, including a contract (other
than a commodities contract) for the purchase, sale or
transfer of a commodity or property of any other

Corporate Insolvency and Governance BillPage 226

description, service, right or interest for a specified price at
a future date;

(e) a swap agreement, including—

(i) a swap or option relating to interest rates, spot or
5other foreign exchange agreements, currency, an
equity index or equity, a debt index or debt,
commodity indexes or commodities, weather,
emissions or inflation;

(ii) a total return, credit spread or credit swap;

(iii) 10any agreement or transaction similar to an
agreement that is referred to in sub-paragraph (i) or
(ii) and is the subject of recurrent dealing in the
swaps or derivatives markets;

(f) an inter-bank borrowing agreement where the term of the
15borrowing is three months or less;

(g) a master agreement for any of the contracts or agreements
referred to in paragraphs (a) to (f).

(3) For the purposes of this paragraph “commodities” includes—

(a) units recognised for compliance with the requirements of
20EU Directive 2003/87/EC establishing a scheme for
greenhouse gas emission allowance trading,

(b) allowances under paragraph 5 of Schedule 2 to the Climate
Change Act 2008 relating to a trading scheme dealt with
under Part 1 of that Schedule (schemes limiting activities
25relating to emissions of greenhouse gas), and

(c) renewables obligation certificates issued—

(i) by the Gas and Electricity Markets Authority under
an order made under section 32B of the Electricity
Act 1989, or

(ii) 30by the Northern Ireland Authority for Utility
Regulation under the Energy (Northern Ireland)
Order 2003 and pursuant to an order made under
Articles 52 to 55F of that Order.

Securities financing transactions

14 (1) 35This paragraph applies to a securities financing transaction.

(2) “Securities financing transaction” has the meaning given by
Article 3(11) of Regulation (EU) 2015/2365 on the transparency of
securities financing transactions.

(3) But for the purposes of that Article as it applies for the purposes of
40this paragraph, references to “commodities” in that Regulation are
to be taken as including the units, allowances and certificates
referred to in paragraph 13(3)(a) to (c).

Derivatives

15 This paragraph applies to a derivative, within the meaning given
45by Article 2(5) of Regulation (EU) No. 648/2012.

Corporate Insolvency and Governance BillPage 227

Spot contracts

16 (1) This paragraph applies to a spot contract.

(2) “Spot contract” has the meaning given by Article 7(2) or 10(2) of
Commission Delegated Regulation of 25.4.2016 supplementing
5Directive 2014/65/EU of the European Parliament and of the
Council as regards organisational requirements and operating
conditions for investment firms and defined terms for the
purposes of that Directive.

Capital market arrangements

17 10This paragraph applies to a capital market arrangement within the
meaning given by paragraph 13(2) of Schedule ZA1.

Contracts forming part of a public-private partnership

18 This paragraph applies to a contract forming part of a public-
private partnership project within the meaning given by
15paragraph 16 of Schedule ZA1.

Part 4 Other exclusions
Financial markets and insolvency

19 Nothing in Article 197B affects the operation of—

(a) 20Part 5 of the Companies (No. 2) (Northern Ireland) Order
1990 (financial markets and insolvency),

(b) the Financial Markets and Insolvency Regulations
(Northern Ireland) 1996 (S.R. 1996/252S.R. 1996/252),

(c) the Financial Markets and Insolvency (Settlement Finality)
25Regulations 1999 (S.I. 1999/2979S.I. 1999/2979), or

(d) the Financial Collateral Arrangements (No.2) Regulations
2003 (S.I. 2003/3226S.I. 2003/3226).

Set-off and netting

20 Nothing in Article 197B affects any set-off or netting arrangements
30(within the meanings given by section 48(1)(c) and (d) of the
Banking Act 2009).”

Part 2 Consequential amendments

Amendments to Acts

2 35In Schedule 15 to the Building Societies Act 1986 (application of companies

Corporate Insolvency and Governance BillPage 228

winding up legislation to building societies), after paragraph 55D insert—

“Protection of supplies

55DA Article 197B (protection of supplies of goods and services) does
not apply.”

3 5In Schedule 15A to the Building Societies Act 1986 (application of other
companies insolvency legislation to building societies), after paragraph 52
insert—

“Protection of supplies

52A Article 197B of the Order (protection of supplies of goods and
10services) is omitted.”

4 In Schedule 10 to the Friendly Societies Act 1992 (application of companies
winding up legislation to friendly societies), after paragraph 65 insert—

“Protection of supplies

65A Article 197B of the Order (protection of supplies of goods and
15services) does not apply.”

Amendment to subordinate legislation

5 In the Insolvent Partnerships Order (Northern Ireland) 1995 (S.R. (N.I.)
1995/225), in article 4(3)(b), for “Article 197” substitute “Articles 197 to
197B”.

Section 35

20SCHEDULE 14 Meetings of companies and other bodies

Meaning of “qualifying body”

1 In this Schedule “qualifying body” means—

(a) a registered society within the meaning of the Co-operative and
25Community Benefit Societies Act (Northern Ireland) 1969 (c. 24
(N.I.)),

(b) a credit union within the meaning of the Credit Unions (Northern
Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)S.I. 1985/1205 (N.I. 12)),

(c) a building society within the meaning of the Building Societies Act
301986,

(d) a society that is registered within the meaning of the Friendly
Societies Act 1974 or incorporated under the Friendly Societies Act
1992,

(e) a registered branch within the meaning of the Friendly Societies Act
351992,

(f) a Scottish charitable incorporated organisation within the meaning
of Chapter 7 of Part 1 of the Charities and Trustee Investment
(Scotland) Act 2005 (asp 10)2005 (asp 10),

Corporate Insolvency and Governance BillPage 229

(g) a company within the meaning of section 1(1) of the Companies Act
2006,

(h) a charitable incorporated organisation within the meaning of Part 11
of the Charities Act 2011, and

(i) 5a registered society within the meaning of the Co-operative and
Community Benefit Societies Act 2014.

Meaning of “relevant period”

2 (1) In this Schedule the “relevant period” means the period which—

(a) begins with 26 March 2020, and

(b) 10ends with 30 September 2020.

(2) The appropriate national authority may by regulations substitute for the
date for the time being specified in sub-paragraph (1)(b)—

(a) an earlier date, or

(b) a later date that is not more than three months after the date for the
15time being so specified and is not later than 5 April 2021.

(3) Regulations under sub-paragraph (2) may make consequential or
transitional provision or savings.

(4) In sub-paragraph (2) “the appropriate national authority” means—

(a) in relation to a qualifying body within paragraph 1(c), (d), (e), (g), (h),
20or (i), the Secretary of State,

(b) in relation to a qualifying body within paragraph 1(f), the Scottish
Ministers, and

(c) in relation to a qualifying body within paragraph 1(a) or (b), the
Department for the Economy in Northern Ireland.

25Meetings of qualifying bodies held during the relevant period

3 (1) This paragraph applies to a meeting within sub-paragraph (2) that is held
during the relevant period.

(2) A meeting is within this sub-paragraph if it is—

(a) a general meeting of a qualifying body,

(b) 30a meeting of any class of members of a qualifying body, or

(c) a meeting of delegates appointed by members of a qualifying body.

(3) The meeting need not be held at any particular place.

(4) The meeting may be held, and any votes may be permitted to be cast, by
electronic means or any other means.

(5) 35The meeting may be held without any number of those participating in the
meeting being together at the same place.

(6) A member of the qualifying body does not have a right—

(a) to attend the meeting in person,

(b) to participate in the meeting other than by voting, or

(c) 40to vote by particular means.

(7) The provisions of any enactment relating to meetings within sub-paragraph
(2) have effect subject to this paragraph.