Paragraph 4

(1)

The provisions of Schedule B1 as applied by regulation 15 apply in respect of a partnership but where a provision of Schedule B1 is listed in Table 1 below, that provision shall apply—

(a)

as modified by Schedule 2 to the 1994 Order; and

(b)

with the modifications set out in column 3 of Table 1,

instead of as modified in accordance with regulation 15.

(2)

In the provisions referred to in the second column of Table 1, a reference to—

(a)

a provision of the Insolvency Act is to that provision as applied by regulation 15 (subject to sub-paragraph (1));

(b)

action includes a reference to inaction;

(c)

the administrator means the administrator appointed under regulation 7;

(d)

the court means the court as defined in regulation 2;

(e)

the creditors’ meeting has the meaning given by paragraph 50 of Schedule B1 (as applied by regulation 15);

(f)

entering administration means entering special administration;

(g)

a hire purchase agreement includes a conditional sale agreement, a chattel leasing agreement and a retention of title agreement;

(h)

an insolvency order is to a special administration order;

(i)

an insolvency petition means an application for a special administration order;

(j)

insolvency proceedings means special administration;

(k)

market value means the amount which would be realised on a sale of property in the open market by a willing vendor;

(l)

the purpose of administration means the pursuit of the special administration objectives;

(m)

partnership is to an investment bank;

(n)

the partnership being in administration is to the investment bank being in special administration;

(o)

a responsible insolvency practitioner is to the administrator;

(p)

a thing in writing includes a reference to a thing in electronic form; and

(q)

an inability to pay its debts has the meaning given in regulation 2(4).

Table 1: Applied provisions of the 1994 Order with respect to Schedule B1

Provision of Schedule 2	Subject	Modification or comment
Para 17	Para 42: moratorium on insolvency proceedings	In the modified paragraph 42, sub-paragraph (5)(a) is not applied.
Para 18	Para 43: moratorium on other legal process	In the modified paragraph 43, sub-paragraph (6) is not applied.
Para 19	Para 47: statement of affairs	In the modified paragraph 47, in sub-paragraph (2), the statement must also include particulars (to the extent prescribed) of the client assets held by the investment bank.
Para 20	Para 49: administrator’s proposals	In the modified paragraph 49— (a) sub-paragraph (2)(b) is not applied; (b) under sub-paragraph (4), the administrator shall also send a copy of the statement of proposals to— (i) every client of the investment bank of whose claim the administrator is aware and has a means of contacting, and (ii) the FSA; and (c) the administrator shall also give notice in the prescribed manner that the statement of proposals is to be provided free of charge to a market infrastructure body who applies in writing to a specified address.
Para 22	Para 61: management
Para 23	Para 65: distribution to creditors	In the modified paragraph 61, sub-paragraph (3) is not applied.
Para 24	Para 69: agency
Para 25	Para 73: protection for secured or preferential creditors
Para 26	Para 74: challenge to administrator’s conduct	In the modified paragraph 74— (a) the FSA may also make an application under this modified paragraph on the grounds that— (i) the administrator is acting or has acted so as unfairly to harm the interests of some or all of the members, creditors or clients; or (ii) the administrator is proposing to act in a way which would unfairly harm the interests of some or all of the members, creditors or clients; (b) a client may also make an application under sub-paragraph (1) or (2); (c) where the FSA has given a direction under regulation 16 which has not been withdrawn, an order may not be made under this paragraph if it would impede or prevent compliance with the direction; and (d) any of the following persons may make an application under this paragraph on the grounds that the administrator is not taking any action in response to a request from that person under regulation 13(2) and that the person is of the opinion that the action requested would not lead to a material reduction in the value of the property of the investment bank— (i) the Bank of England, (ii) the Treasury, (iii) the FSA, or (iv) a market infrastructure body.
Para 28	Para 84: termination: no more assets for distribution	In the modified paragraph 84— (a) the administrator shall only file a notice under sub-paragraph (1) if the investment bank no longer holds client assets; and (b) in sub-paragraph (5), a copy of the notice shall be sent to every client of the investment bank of whom the administrator is aware and the FSA.
Para 29	Para 87: resignation	In the modified paragraph 87— (a) where the administrator was appointed on the application of the Secretary of State or the FSA, the notice given in accordance with sub-paragraph (2)(a) must also be given to the applicant; and (b) sub-paragraphs (2)(b) and (c) are not applied.
Para 30	Para 89: disqualification	In the modified paragraph 89— (a) where the administrator was appointed by the Secretary of State or the FSA, the notice given in accordance with sub-paragraph (2)(a) must also be given to the applicant; and (b) sub-paragraphs (2)(b) and (c) are not applied.
Para 31	Para 90: replacement	In the modified paragraph 90, the reference to paragraphs 91to 93 and 95 is to paragraph 91.
Para 32	Para 91: replacement	In the modified paragraph 91, the FSA is added to the list of persons who may make an application to appoint an administrator but to whom the restrictions in sub-paragraph (2) apply.
Para 38	Para 103: joint administrators	In the modified paragraph 103— (a) in sub-paragraph (2)(a), the reference to paragraph 12(1)(a) to (c) is to regulation 5(1); and (b) sub-paragraphs (3) and (4) are not applied.
Para 39	Para 105: majority decision of directors	Paragraph 105 is not applied.
Para 40	Para 106: fines	In the modified paragraph 106, sub-paragraphs (2)(a), (2)(b), (2)(j) and (2)(k) are not applied.
Para 42	Paras 112 to 116: Scotland	Paragraphs 112 to 116 are not applied.