Financial Services and Markets Bill

Financial Services and Markets Bill - continued	House of Commons
PART XXII, INSOLVENCY - continued

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	Bankruptcy
Petitions.	322. - (1) The Authority may present a petition to the court-
	(a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or
	(b) under section 5 of the 1985 Act for the sequestration of the estate of an individual.
	(2) But such a petition may be presented only on the ground that-
	(a) the individual appears to be unable to pay a regulated activity debt; or
	(b) the individual appears to have no reasonable prospect of being able to pay a regulated activity debt.
	(3) An individual appears to be unable to pay a regulated activity debt if he is in default on an obligation to pay a sum due and payable under an agreement.
	(4) An individual appears to have no reasonable prospect of being able to pay a regulated activity debt if-
	(a) the Authority has served on him a demand requiring him to establish to the satisfaction of the Authority that there is a reasonable prospect that he will be able to pay a sum payable under an agreement when it falls due;
	(b) at least three weeks have elapsed since the demand was served; and
	(c) the demand has been neither complied with nor set aside in accordance with rules or, in relation to Scotland, with prescribed provisions.
	(5) "Individual" means an individual-
	(a) who is, or has been, an authorised person; or
	(b) who is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
	(6) "Agreement" means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the individual concerned.
	(7) "Rules" means rules made under section 412 of the 1986 Act (or Article 359 of the 1989 Order).
Insolvency practitioner's duty to report to Authority.	323. - (1) If-
	(a) a bankruptcy order or sequestration award is in force in relation to an individual by virtue of a petition presented by a person other than the Authority, and
	(b) it appears to the insolvency practitioner that the individual is carrying on, or has carried on, a regulated activity in contravention of the general prohibition,
	the insolvency practitioner must report the matter to the Authority without delay.
	(2) "Bankruptcy order" means a bankruptcy order under Part IX of the 1986 Act (or Part IX of the 1989 Order).
	(3) "Sequestration award" means an award of sequestration under section 12 of the 1985 Act.
Authority's powers to participate in proceedings.	324. - (1) This section applies if a person other than the Authority presents a petition to the court-
	(a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or
	(b) under section 5 of the 1985 Act for the sequestration of the estate of an individual.
	(2) The Authority is entitled to be heard-
	(a) at the hearing of the petition; and
	(b) at any other hearing in relation to the individual under-
	(i) Part IX of the 1986 Act;
	(ii) Part IX of the 1989 Order; or
	(iii) the 1985 Act.
	(3) A copy of the report prepared under section 274 of the 1986 Act (or Article 248 of the 1989 Order) must also be sent to the Authority.
	(4) A person appointed for the purpose by the Authority is entitled-
	(a) to attend any meeting of creditors of the individual;
	(b) to attend any meeting of a committee established under section 301 of the 1986 Act (or Article 274 of the 1989 Order);
	(c) to attend any meeting of commissioners held under paragraph 17 or 18 of Schedule 6 to the 1985 Act; and
	(d) to make representations as to any matter for decision at such a meeting.
	(5) "Individual" means an individual who-
	(a) is, or has been, an authorised person; or
	(b) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
	Provisions against debt avoidance
Authority's right to apply for an order.	325. - (1) The Authority may apply for an order under section 423 of the 1986 Act (or Article 367 of the 1989 Order) in relation to a debtor if-
	(a) at the time the transaction at an undervalue was entered into, the debtor was carrying on a regulated activity (whether or not in contravention of the general prohibition); and
	(b) a victim of the transaction is or was party to an agreement entered into with the debtor, the making or performance of which constituted or was part of a regulated activity carried on by the debtor.
	(2) An application made under this section is to be treated as made on behalf of every victim of the transaction to whom subsection (1)(b) applies.
	(3) Expressions which are given a meaning in Part XVI of the 1986 Act (or Article 367, 368 or 369 of the 1989 Order) have the same meaning when used in this section.

Prepared 17 June 1999