Regulation 12B Objectives 1 and 3—client assets (other than client money) which the administrator is unable to return to clientsF1

This regulation applies where the administrator, after setting a soft bar date, includes in the distribution plan provision for the option of setting a hard bar date.

If the administrator thinks it necessary in order to expedite the return of client assets, the administrator may by a hard bar date notice set a hard bar date.

The administrator may not set a hard bar date without the approval of the court given on application by the administrator.

A late claim of a type described in regulation 11(1) which is submitted in response to the setting of a bar date under that regulation on or after the date on which the administrator sets a hard bar date is to be treated as a client asset claim.

Where the administrator sets a hard bar date, the administrator, after that date—

A person who acquires client assets on a disposal of residual assets acquires good title to them as against all clients.

Where the administrator receives a client asset claim after the hard bar date (“late claim”) and—

the administrator must meet the late claim out of the residual assets.

Where the administrator has returned client assets after setting a hard bar date and then receives a late claim in respect of assets that have been returned—

The restrictions in paragraph (8) do not apply where—

Where a disposal of residual assets prevents the administrator from meeting a late claim—

No interest is payable on the debt for which a person makes an unsecured claim under paragraph (10).

This regulation does not apply to client money.

In this regulation—

• “client asset claim” means a claim of a type described in regulation 11(1) which is submitted in response to the setting of a hard bar date;

• “distribution plan” means the plan for the return of client assets which the administrator is required to draw up in accordance with insolvency rules after setting a soft bar date;

• “eligible claimant” means—

  1. (a)

     a person to whom the administrator has already returned client assets under regulation 11; or

  2. (b)

     a person who—

     1. (i)

        submits a client asset claim on or before the hard bar date; and

     2. (ii)

        would have been eligible for a return of client assets under regulation 11 if the claim had been submitted in response to the setting of the soft bar date;

• “hard bar date” means a final date (subject to provision for late claims in paragraphs (7) to (10)) for the submission of claims of a type described in regulation 11(1);

• “hard bar date notice” means a notice which specifies a hard bar date and includes a statement that after the end of that day the administrator—

  1. (a)

     may dispose of client assets still held by the investment bank after the administrator has returned client assets to any eligible claimants; and

  2. (b)

     may, consequently, be unable to meet any further client asset claims; and

• “soft bar date” means a bar date set under regulation 11.