# The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014

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U.K.

Statutory Instruments

# 2014 No. 229

Industrial And Provident Societies

Credit Unions

# The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014

Made

4th February 2014

Laid before Parliament

7th February 2014

Coming into force

6th April 2014

The Treasury make the following Order in exercise of the powers conferred on them by section 255(1)(a), (4) and (5) of the                           Enterprise Act 2002 F1.                        

The Secretary of State concurs in the making of this Order.

F12002 c. 40.

## Citation, commencement and interpretationU.K.

1.—(1) This Order may be cited as the Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration)                     Order 2014, and comes into force on 6th April 2014.                  

(2) In this Order—

“the 1965 Act” means the Industrial and Provident Societies Act 1965 F2;                  

“the 1967 Act” means the Industrial and Provident Societies Act 1967 F3;                  

“the 1986 Act” means the Insolvency Act 1986 F4;                  

“the 2006 Act” means the Companies Act 2006 F5;                  

“authorised person” has the meaning given in section 31(2) of FSMA;                  

“authorised deposit taker” has the meaning given in section 359(4) of FSMA F6;                  

“committee”, in relation to a relevant society, has the meaning given in section 74(1) of the 1965 Act;                  

“deposit” has the meaning given by article 5 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 F7;                  

“the FCA” means the Financial Conduct Authority;                  

“FSMA” means the Financial Services and Markets Act 2000 F8;                  

“member”, in relation to a relevant society, means a person whose name is entered as a member in the register kept by the society                     in accordance with section 44(1) of the 1965 Act F9;                  

“officer”, in relation to a relevant society, has the meaning given in section 74(1) of the 1965 Act;                  

“relevant person” has the meaning given in section 213(9)(a) of FSMA F10; and                  

“relevant society” means a society which is registered under the 1965 Act and is not—                  

a private registered provider of social housing; or

registered as a social landlord under Part 1 of the Housing Act 1996 F11 or under Part 2 of the Housing (Scotland) Act 2010 F12.                           

(3) The definition of “authorised deposit taker” is to be construed in accordance with—                  

(a)section 22 of, and Schedule 2 to, FSMA F13; and                  

(b)any relevant order under section 22 F14.                  

(4) For the purposes of this Order a relevant society is “in administration” while the appointment of an administrator of the                     society under Schedule B1 to the 1986 Act F15 has effect.                  

F21965 c.12.

F31967 c. 48.

F41986 c. 45.

F52006 c. 46.

F6The definition was amended by the Financial Services Act 2012 (c. 21), **Schedule 14**, paragraphs 1 and 6(1) and (5).

F7S.I. 2001/544.

F82000 c. 8.

F9Section 44(1) was amended by S.I. 2011/593.

F10Section 213(9)(a) was amended by the Financial Services Act 2012, Schedule 10, paragraphs 1 and 3(1) and (6).

F111996 c. 52.

F122010 asp 17.

F13Section 22 and Schedule 2 were amended by the Financial Services Act 2012, section 7.

F14The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) is relevant.

F15Schedule B1 was inserted by the Enterprise Act 2002, section 248(2) and Schedule 16; and was amended by the Financial Services                              Act 2012, Schedule 18, paragraphs 51 and 55, and by S.I. 2003/2096, 2008/948 and 2008/1897. There are other amendments not relevant to this Order.

## Application to relevant societies of law about company arrangements and administrationU.K.

2.—(1) Part 1 of the 1986 Act (company voluntary arrangements) applies in relation to a relevant society with the modifications set                     out in Parts 1 and 2 of Schedule 1.                  

(2) Part 2 of the 1986 Act (administration) F16 applies in relation to a relevant society with the modifications set out in Parts 1, 3 and 4 of Schedule 1.                  

(3) Part 26 of the 2006 Act (arrangements and reconstructions) applies in relation to a relevant society with the modifications                     set out in Schedule 2.                  

F16Part 2, substituted by the Enterprise Act 2002, section 248(1), gives effect to Schedule B1, which is inserted in the 1986 Act by                              the Enterprise Act 2002, section 248(2) and Schedule 16.

## Application of section 176A of the 1986 ActU.K.

3.  Section 176A of the 1986 Act (share of assets for unsecured creditors) F17 applies in relation to a relevant society which is in administration, and for that purpose—                  

(a)a reference to a company includes a reference to a relevant society;                  

(b)a reference to a receiver is to be ignored; and                  

(c)in subsection (4)(b) F18 the reference to Part 26 of the 2006 Act is a reference to that Part as applied in relation to a relevant society.                  

F17Section 176A was inserted by the Enterprise Act 2002, section 252.

F18Subsection (4)(b) was amended by S.I. 2008/948.

## Application of other provisions of the 1986 ActU.K.

4.  The following provisions of the 1986 Act, so far as they have effect for the purposes of Part 1 or Part 2 of that Act as applied                     in relation to a relevant society, apply with the modifications set out in Schedule 3—                  

(a)Part 6 (miscellaneous provisions applying to companies which are insolvent or in liquidation);                  

(b)Part 7 (interpretation for first group of Parts); and                  

(c)Parts 12 to 19 (the third group of Parts).                  

## Application of section 215 of FSMAU.K.

5.—(1) Section 215 of FSMA (rights of the compensation scheme in insolvency) F19 applies in relation to a relevant society—                  

(a)which is a relevant person; and                  

(b)in relation to which an administration application is made, an administrator is appointed or a copy of notice of intention                        to appoint an administrator is filed with the court under Schedule B1 to the 1986 Act.                  

(2) For that purpose in subsection (3) the reference to a company includes a reference to a relevant society.

F19Section 215 was amended by the Banking Act 2009 (c. 1), **section 175**; by the Enterprise Act 2002, Schedule 17, paragraph 54(2), and by the Finance Act 2012, Schedule 10, paragraph 5. There are                              other amendments not relevant to this Order.

## Application of section 356 of FSMAU.K.

6.—(1) Section 356 of FSMA (powers of FCA and PRA to participate in proceedings: company voluntary arrangements) F20 applies in relation to a relevant society—                  

(a)which is an authorised person; and                  

(b)in relation to which a voluntary arrangement has effect under Part 1 of the 1986 Act.                  

(2) For that purpose—

(a)in subsection (1) the reference to a company includes a reference to a relevant society; and                  

(b)in subsection (3) the reference to an application to the court in relation to the company is a reference to an application                        to the court under section 6 F21 or 7 F22 of the 1986 Act in relation to a relevant society of the kind described in paragraph (1).                  

F20Section 356 was amended by the Insolvency Act 2000 (c.39), **section 15(3)**, and by the Financial Services Act 2012, Schedule 14, paragraphs 1 and 3.

F21Section 6 was amended by the Insolvency Act 2000, Schedule 2, paragraphs 1 and 7, and by the Enterprise Act 2002, Schedule 17, paragraphs                              9 and 12. There are other amendments not relevant to this Order.

F22Section 7 was amended by the Insolvency Act 2000, Schedule 2, paragraphs 1 and 9.

## Application of section 359 of FSMAU.K.

7.—(1) Section 359 of FSMA (administration order) F23 applies in relation to a relevant society which—                  

(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.                  

(2) For that purpose—

(a)in subsection (1) the words from “which” to the end are to be ignored; and                  

(b)except in the definition of “company” in subsection (4), a reference to a company is a reference to a relevant society of                        the kind described in paragraph (1).                  

F23Section 359 was substituted by the Enterprise Act 2002, Schedule 17, paragraphs 53 and 55; and was amended by the Financial Services                              Act 2012, Schedule 14, paragraphs 1 and 6. There are other amendments not relevant to this Order.

## Application of section 361 of FSMAU.K.

8.  Section 361 of FSMA (administrator's duty to report to FCA and PRA) F24 applies in relation to a relevant society, and for that purpose a reference to a company includes a reference to a relevant                     society.                  

F24Section 361 was substituted by the Enterprise Act 2002, Schedule 17, paragraphs 53 and 56; and was amended by the Financial Services                              Act 2012, Schedule 14, paragraphs 1 and 7. There are other amendments not relevant to this Order.

## Application of sections 362 and 362A of FSMAU.K.

9.—(1) Section 362 of FSMA (powers of FCA and PRA to participate in proceedings) F25 and section 362A (administrator appointed by company or directors) F26 apply in relation to a relevant society which—                  

(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.                  

(2) For that purpose—

(a)in section 362—                  

(i)in subsection (1) the words from “which” to the end are to be ignored;                  

(ii)in subsection (1A) the words “of a kind described in subsection (1)(a) to (c)” are to be ignored;                  

(iii)a reference to a company is a reference to a relevant society of the kind described in paragraph (1); and                  

(b)in section 362A—                  

(i)in subsection (1) the words “of a kind described in section 362(1)(a) to (c)” are to be ignored;                  

(ii)a reference to a company is a reference to a relevant society of the kind described in paragraph (1).                  

F25Section 362 was amended by the Enterprise Act 2002, Schedule 17, paragraphs 53 and 57, by the Financial Services Act 2012, Schedule 14,                              paragraphs 1 and 8, and by S.I. 2008/948. There are other amendments not relevant to this Order.

F26Section 362A was inserted by the Enterprise Act 2002, Schedule 17, paragraphs 53 and 58; and was amended by the Financial Services Act                              2012, Schedule 14, paragraphs 1 and 9.

## Application of provisions of FSMA: general provisionU.K.

10.—(1) In the application in relation to a relevant society of any of the provisions applied by articles 5 to 9, except sections                     359(4) and 362(1B)—                  

(a)a reference to a provision of the 1986 Act is a reference to that provision as applied in relation to a relevant society;                        and                  

(b)a reference to Schedule B1 to the Insolvency (Northern Ireland) Order 1989 F27 is to be ignored.                  

(2) In articles 5 to 9—

(a)a reference to a provision of the 1986 Act is a reference to that provision as applied in relation to a relevant society;                  

(b)“general prohibition” has the meaning given in section 19(2) of FSMA; and                  

(c)“regulated activity” has the meaning given in section 22 of FSMA F28.                  

F27S.I. 1989/2405 (N.I. 19). Schedule B1 was inserted by S.I. 2005/1455 (N.I. 10) and amended by S.R. 2006/370. There are other amendments not relevant to this Order.

F28Section 22 was amended by section 7(1) of the Financial Services Act 2012.

## Application of insolvency rulesU.K.

11.—(1) Part 1 (company voluntary arrangements) and, so far as applicable to voluntary arrangements, Parts 7 to 13 (the third group                     of Parts) of the Insolvency Rules 1986 F29 apply where—                  

(a)it is intended to make, and there is made, a proposal to a relevant society and its creditors for a voluntary arrangement                        within the meaning given in section 1 of the 1986 Act F30 (as applied in relation to a relevant society); and                  

(b)the courts in England and Wales have jurisdiction to wind up the society.                  

(2) Part 1 (company voluntary arrangements) and, so far as applicable to voluntary arrangements, Part 7 (provisions of general                     application) of the Insolvency (Scotland) Rules 1986 F31 apply where—                  

(a)it is intended to make, and there is made, a proposal to a relevant society and its creditors for a voluntary arrangement                        within the meaning given in section 1 of the 1986 Act (as applied in relation to a relevant society); and                  

(b)a sheriff court in Scotland has jurisdiction to wind up the society.                  

(3) Part 2 (administration procedure) and, so far as applicable to administration procedure, Parts 7 to 13 of the Insolvency Rules                     1986 apply in relation to the appointment of an administrator of a relevant society which the courts in England and Wales                     have jurisdiction to wind up.                  

(4) Part 2 (administration procedure) and, so far as applicable to administration procedure, Part 7 of the Insolvency (Scotland)                     Rules 1986 apply in relation to the appointment of an administrator of a relevant society which a sheriff court in Scotland                     has jurisdiction to wind up.                  

(5) Schedule 4 (which makes further provision about the application in relation to a relevant society of the Insolvency Rules                     1986 and the Insolvency (Scotland) Rules 1986) has effect.                  

F29S.I. 1986/1925 as amended by S.I. 1987/1919; 1989/397; 2003/1730; s004/584; 2005/527; 2006/1272; 2009/642 and 2010/686. There are other amendments not relevant to this Order.

F30Section 1 was amended by the Insolvency Act 2000, Schedule 2, paragraphs 1 and 2, and by the Enterprise Act 2002, Schedule 17, paragraphs                              9 and 10. There are other amendments not relevant to this Order.

F31S.I. 1986/1915 as amended by S.I. 1987/1921; 2002/2709; 2003/2111; 2006/734; 2008/662; 2009/662; 2009/2375; and 2010/688. There are other amendments not relevant to                              this Order.

## Application of other subordinate legislationU.K.

12.  Schedule 5 applies other subordinate legislation in relation to a relevant society with the modifications set out in that                     Schedule.                  

## Modified application of section 50 of the 1965 ActU.K.

13.  Section 50 of the 1965 Act (amalgamation of societies) F32 has effect in relation to a relevant society which is in administration as if at the end there were added—                  

“(7)Subsections (8) to (11) have effect where, in relation to a relevant society which is in administration, the administrator's                        proposals under paragraph 49 or a revision to proposals under paragraph 54 include provision for amalgamation in pursuance                        of this section (“relevant provision”).                  

(8)The general meeting of the society held in accordance with subsection (2)(b) is to be treated as having been summoned by the                        administrator for consideration of the proposals or the revision under paragraph 53 or 54.                  

(9)If that meeting confirms the resolution passed in relation to the relevant provision in accordance with subsection (2)(a),                        the relevant provision is to be treated as approved for the purposes of paragraph 53(1) or 54(5).                  

(10)Subsection (5) does not apply to the special resolution which approves the relevant provision.                  

(11)In subsections (7) to (9) a reference to a numbered paragraph is a reference to the paragraph so numbered in Schedule B1 to                        the Insolvency Act 1986 as applied in relation to a relevant society by an order made under section 255 of the Enterprise                        Act 2002.”.                  

F32Section 50 was amended by S.I. 2001/2617 and 2013/496.

## Modified application of section 51 of the 1965 ActU.K.

14.  Section 51 of the 1965 Act (transfer of engagements between societies) F33 has effect in relation to a relevant society which is in administration as if for subsection (2) there were substituted—                  

“(2)Subsections (2) to (11) of section 50 have effect for the purposes of this section with the modification that in subsection                        (7) the reference to amalgamation in pursuance of section 50 is to be read as a reference to a transfer of engagements in                        pursuance of this section.”.                  

F33Section 51 was amended by S.I. 2013/496.

## Modified application of section 52 of the 1965 ActU.K.

15.  Section 52 of the 1965 Act (conversion into, amalgamation with, or transfer of engagements to company) F34 has effect in relation to a relevant society which is in administration as if after subsection (3B) there were inserted—                  

“(3C)Subsections (7) to (11) of section 50 have effect for the purposes of this section with the following modifications—                  

(a)in subsection (7) the reference to amalgamation in pursuance of section 50 is a reference to conversion into, amalgamation                           with or a transfer of engagements to, a company in pursuance of this section;                  

(b)in subsection (8) the reference to subsection (2)(b) is a reference to subsection (3)(d) of this section; and                  

(c)in subsection (9) the reference to subsection (2)(a) is a reference to subsection (3)(a) of this section.”.                  

F34Section 52 was amended by the Industrial and Provident Societies Act 2002 (c. 20), **section 1(2)**, and by S.I. 2001/2617, 2009/1941 and 2013/496.

## Modified application of section 59 of the 1965 ActU.K.

16.  Section 59 of the 1965 Act (restriction on dissolution or cancellation of registration) F35 has effect in relation to a relevant society which is in administration as if the reference to the liquidator included a                     reference to the administrator.                  

F35Section 59 was amended by S.I. 2001/2617 and 2013/496.

## Amendment of the 1965 ActU.K.

17.—(1) The 1965 Act is amended as follows.                  

(2) After section 43 (duties of receiver or manager of society's property) insert—

### “43A.Floating charge holder not to appoint administrative receiver

(1)The holder of a qualifying floating charge in respect of the property of a relevant society whose registered office is situated                        in England and Wales may not appoint an administrative receiver of the society.                  

(2)This section applies to a floating charge which is created by a relevant society on or after 6th April 2014 and is either—                  

(a)a charge in respect of which an application has been made for the purposes of section 1 of the Industrial and Provident Societies                           Act 1967 F36; or                  

(b)created by a debenture registered under section 9 of the Agricultural Credits Act 1928 F37 as applied by section 14 of that Act.                  

(3)This section applies in spite of any provision of an agreement or instrument which purports to empower a person to appoint                        an administrative receiver (by whatever name).                  

(4)In this section—                  

“administrative receiver”, in relation to a relevant society, means—                  

a receiver or manager of the whole (or substantially the whole) of the society's property appointed by or on behalf of the                                 holder of a floating charge; or                           

a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the                                 society's property; and                           

“holder of a qualifying floating charge in respect of the property of a relevant society” has the meaning given in paragraph 14 of Schedule B1 to the Insolvency Act 1986 as applied in relation to a relevant society                        by an order made under section 255 of the Enterprise Act 2002.”.                  

(3) In section 49 (appointment of inspectors and calling of special meetings) F38 after subsection (1) insert—                  

“(1A)The power of the FCA to call a special meeting of a relevant society in respect of which a moratorium is in force under section                        1A of the Insolvency Act 1986 is subject to paragraph 12(1)(b) of Schedule A1 to that Act F39 as applied in relation to a relevant society by an order made under section 255 of the Enterprise Act 2002.”.                  

(4) In section 55 (dissolution of society) F40 after subsection (1C) insert—                  

“(1D)A relevant society may also be dissolved under paragraph 84 of Schedule B1 to the 1986 Act as applied in relation to a relevant                        society by an order made under section 255 of the Enterprise Act 2002.”.                  

(5) In section 74 (interpretation — general), in subsection (1) at the end insert—

““relevant society” means a registered society which is not—                     

a private registered provider of social housing; or                              

registered as a social landlord under Part 1 of the Housing Act 1996 or under Part 2 of the Housing (Scotland) Act 2010.”.                              

F36Section 1 was amended by S.I. 1996/1738, 2001/2617 and 2001/3649.

F371928 c. 43. Section 9 was amended by the Land Charges Act 1972 (c. 61), **Schedule 3**, paragraph 7, and by S.I. 2011/2436.

F38Section 49 was amended by S.I. 2001/2617 and 2013/496.

F39Section 1A and Schedule A1 were inserted by the Insolvency Act 2000 (c. 39), **section 1** and Schedule 1, paragraphs 1, 2 and 4.

F40Section 55 was substituted by S.I. 2009/1941; and was amended by S.I. 2011/2687 and 2013/496.

Sam Gyimah

Mark Lancaster

 Two of the Lords Commissioners of Her Majesty's Treasury

4th February 2014

I concur

Jenny Willott

 Parliamentary Under Secretary of State for Employment Relations and Consumer Affairs

 Department for Business, Innovation and Skills

4th February 2014

 Article 2(1) and (2)

## SCHEDULE 1U.K.Modified application of Parts 1 and 2 of the Insolvency Act 1986 to relevant societies

### **PART 1**U.K.General modifications

1.  Unless the context otherwise requires and subject to any further modification in this Schedule, in Parts 1 and 2 of the 1986                     Act—U.K.

(a)a reference to a provision of that Act or to Part 26 of the 2006 Act is a reference to that provision or that Part as applied                        in relation to a relevant society;

(b)an expression defined in that Act (but not an expression modified by this paragraph) has the meaning given in the Act with                        the modification that a reference to a company includes a reference to a relevant society;

(c)a reference to a company includes a reference to a relevant society;

(d)a reference to a company registered in England and Wales includes a reference to a relevant society whose registered office                        is situated in England and Wales;

(e)a reference to a company registered in Scotland includes a reference to a relevant society whose registered office is situated                        in Scotland;

(f)a reference to a company's creditors does not include a reference to a member of a relevant society to whom an amount is owed                        by the society if, but only in so far as, the amount concerned is owed in respect of the member's shares;

(g)a reference to the directors of a company is a reference to the members of the committee of a relevant society;

(h)a reference to a meeting of a company or of the members of a company is a reference to a general meeting of a relevant society                        and, in relation to a society whose rules allow the members to appoint delegates for meetings of the society or its members,                        includes a reference to a general meeting for which delegates have been appointed;

(i)a reference to a member of a company is a reference to a person whose name is entered as a member in the register kept by                        a relevant society in accordance with section 44(1) of the 1965 Act (register of members and officers) F41;

(j)a reference to an officer of a company is a reference to an officer of a relevant society; and

(k)a reference to the registrar of companies is a reference to the FCA in its capacity as the authority responsible for the registration                        of a relevant society under the 1965 Act.

F41Section 44(1) was amended by S.I. 2011/593.

### **PART 2**U.K.Modified application of Part 1 of the Insolvency Act 1986 to relevant societies (further modifications)

2.  Part 1 of the 1986 Act applies in relation to a relevant society with the further modifications set out in this Part and with                     any other necessary modification.U.K.

#### Part 1 (company voluntary arrangements)U.K.

3.  Section 1 of the 1986 Act (those who may propose an arrangement) F42 has effect as if—                  

(a)it required any proposal under Part 1 to be so framed as to enable a relevant society to comply with the rules of the society                        and the provisions of the Industrial and Provident Societies Acts 1965 to 1968 F43 and the Credit Unions Act 1979 F44; and                  

(b)in subsection (1) F45 the reference to debts included a reference to any amount owed by the society in respect of a member's shares where—                  

(i)the society is an authorised deposit taker; and                  

(ii)the amount concerned is owed in respect of a deposit.                  

F42Section 1 was amended by the Insolvency Act 2000, Schedule 2, paragraphs 1 and 2, and by the Enterprise Act 2002 (c. 40), **Schedule 17**, paragraphs 9 and 10. There are other amendments not relevant to this Order.

F43For the meaning of this citation see section 23(2) of the Friendly and Industrial and Provident Societies Act 1968 (c. 55).

F441979 c.34.

F45Subsection 1 was amended by the Enterprise Act 2002, Schedule 17, paragraphs 9 and 10(a).

4.  Section 3 of the 1986 Act (summoning of meetings) has effect as if subsection (3) provided that the persons required to be                     summoned to a creditors' meeting included every member of the society to whom an amount is owed in respect of the member's                     shares where—U.K.

(a)the society is an authorised deposit taker; and

(b)the amount concerned is owed in respect of a deposit.

5.  Section 7A of the 1986 Act (prosecution of delinquent officers of company) F46 has effect as if—U.K.

(a)in subsection (2), in the definition of “the appropriate authority”—

(i)at the end of sub-paragraph (i) there were added “ or the Financial Conduct Authority (“the FCA”) ”;

(ii)at the end of sub-paragraph (ii) there were added “ or the FCA ”;

(b)for subsection (3) F47 there were substituted—

“(3)Subsection (3A) applies where a report is made to the Secretary of State or the FCA under subsection (2) in relation to a                        relevant society (within the meaning given in section 74(1) of the Industrial and Provident Societies Act 1965 F48 (“the 1965 Act”)) whose registered office is situated in England and Wales.                  

(3A)The Secretary of State or the FCA may, for the purpose of investigating the matter reported and such other matters relating                        to the society's affairs as appear to require investigation, exercise the power to appoint inspectors which would be exercisable                        by the FCA under section 49 of the 1965 Act upon an application made for that purpose under subsection (1) of that section.”;                  

(c)subsections (4) to (7) were omitted; and

(d)in subsection (8), for the definition of “prosecuting authority” there were substituted—

““prosecuting authority” means—                     

in the case of a relevant society whose registered office is situated in England and Wales, the Director of Public Prosecutions,                                    the Secretary of State or the FCA; and                              

in the case of a relevant society whose registered office is situated in Scotland, the Lord Advocate.”.                              

F46Section 7A was inserted by the Insolvency Act 2000, Schedule 2, paragraphs 1 and 10.

F47Subsection (3) was amended by S.I. 2009/1941.

F48The definition of “relevant society” is inserted by article 17(5) of this Order.

#### Schedule A1 (moratorium where directors propose voluntary arrangement)U.K.

6.  In Schedule A1 to the 1986 Act F49 paragraph 1 (interpretation) has effect as if—                  

(a)before the definition of “the beginning of the moratorium” there were inserted—                  

““administrative receiver”, in relation to a relevant society whose registered office is situated in England or Wales, means—                     

a receiver or manager of the whole (or substantially the whole) of the society's property appointed by or on behalf of the                                    holder of a floating charge, or                              

a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the                                    society's property,”; and                              

(b)after the definition of “the nominee” there were inserted—                  

““relevant society” means a society which is registered under the Industrial and Provident Societies Act 1965 and is not—                     

a private registered provider of social housing; or                              

registered as a social landlord under Part 1 of the Housing Act 1996 or under Part 2 of the Housing (Scotland) Act 2010,”.                              

F49Schedule A1 was inserted by the Insolvency Act 2000, Schedule 1, paragraphs 1 and 4; and was amended by the Enterprise Act                              2002, Schedule 17, paragraphs 9 and 37, by the Financial Services Act 2012 (c. 21), **Schedule 18**, paragraphs 51 and 54, and by S.I. 2002/1555, 2004/2312, 2008/1897 and 2009/ 1941. There are other amendments not relevant to this Order.

7.  Schedule A1 to the 1986 Act has effect as if after paragraph 1 there were inserted—U.K.

“1A.—(1)In this Schedule a reference to a floating charge, in relation to a relevant society whose registered office is situated in                        England or Wales, is a reference to a floating charge which is created by the society on or after 6th April 2014 and is either—                  

(a)a charge in respect of which an application has been made for the purposes of section 1 of the Industrial and Provident Societies                           Act 1967; or                  

(b)created by a debenture registered under section 9 of the Agricultural Credits Act 1928 as applied by section 14 of that Act.                  

(2)In this Schedule a reference to a floating charge, in relation to a relevant society whose registered office is situated in                        Scotland, is a reference to a floating charge which is created by the society on or after 6th April 2014 and is either—                  

(a)a charge created by an instrument a copy of which has been delivered to the Financial Conduct Authority in pursuance of section                           4 of the Industrial and Provident Societies Act 1967 F50; or                  

(b)created and registered under Part 2 of the Agricultural Credits (Scotland) Act 1929 F51.”.                  

F50Section 4 is prospectively repealed by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), **section 49(2)**. Section 4(3) was amended by S.I. 2001/2617; 2001/3649 and 2013/496.

F511929 c. 13 (19 and 20 Geo. 5).

8.  Schedule A1 to the 1986 Act has effect as if—U.K.

(a)in paragraph 2 (companies eligible for a moratorium) in sub-paragraph (1) the words “if it meets the requirements of paragraph                        3,” were omitted;

(b)paragraph 3 (requirements for eligibility for a moratorium) were omitted; and

(c)paragraph 5 (power to modify qualifications for eligibility) were omitted.

### **PART 3**U.K.Modified application of Part 2 of the Insolvency Act 1986 to relevant societies (further modifications)

9.  Part 2 of the 1986 Act applies in relation to a relevant society with the further modifications set out in this Part and with                     any other necessary modification.U.K.

10.  In this Part—U.K.

(a)a reference to a numbered paragraph is a reference to the paragraph so numbered in Schedule B1 to the 1986 Act (administration)                        F52; and

(b)a reference to a sub-paragraph is a reference to a sub-paragraph of such a paragraph.

F52Schedule B1 was inserted by the Enterprise Act 2002, section 248(2) and Schedule 16; and was amended by the Financial Services                              Act 2012, Schedule 18, paragraphs 51 and 55, and by S.I. 2003/2096, 2008/948 and 2008/1897. There are other amendments not relevant to this Order.

#### Nature of administrationU.K.

11.  Paragraph 3 (purpose of administration) has effect as if a reference to the company's creditors as a whole included a reference                     to any member of the society to whom an amount is owed in respect of the member's shares where—                  

(a)the society is an authorised deposit taker; and                  

(b)the amount concerned is owed in respect of a deposit.                  

#### Appointment of administrator by courtU.K.

12.  Paragraph 12 (administration application) has effect as if—                  

(a)in sub-paragraph (1)(c) the reference to the company's creditors included a reference to any member of the society who would                        be entitled to petition for the winding up of the society;                  

(b)sub-paragraph (1) provided that—                  

(i)an application to the court for an administration order may also be made by the FCA in its capacity as the authority responsible                        for the registration of the society under the 1965 Act; and                  

(ii)in the case of a relevant society which is or has been an authorised person, such power is in addition to the power to make                        an administration application conferred on the FCA by section 359 of FSMA (administration order); and                  

(c)sub-paragraph (2) required the applicant also to notify the FCA (unless the FCA is the applicant).                  

#### Appointment of administrator by holder of floating chargeU.K.

13.  In paragraph 14 (power to appoint) sub-paragraph (2) has effect as if—                  

(a)paragraph (a) required the instrument to include the following statement—                  

“Paragraph 14 of Schedule B1 to the Insolvency Act 1986, as applied in relation to relevant societies by article 2(2) of the                        Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014, applies                        to this floating charge.”;                  

(b)in paragraph (c) the words “within the meaning given by section 29(2)” were omitted; and                  

(c)paragraph (d) were omitted.                  

14.  Paragraph 15 (restrictions on power to appoint) has effect as if for sub-paragraph (3) there were substituted—U.K.

“(3)In relation to a relevant society whose registered office is situated in Scotland, sub-paragraph (2) has effect as if the                        following were substituted for paragraph (a)—                  

“(a)it has priority of ranking in accordance with section 464(4)(b) of the Companies Act 1985 as applied in relation to a relevant                           society by section 3 of the Industrial and Provident Societies Act 1967 F53,”.”.                  

F53Section 3 was substituted by the Companies Consolidation (Consequential Provisions) Act 1985 (c. 9), **section 26**, was amended by S.I. 2001/2617 and 2009/1941, and is prospectively substituted by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), **section 49(1)**.

#### Effect of administrationU.K.

15.  In paragraph 41 (dismissal of administrative or other receiver), in sub-paragraph (3) ignore paragraph (b).                  

16.  In paragraph 45 (publicity) sub-paragraph (3) has effect as if after paragraph (b) there were inserted—U.K.

“(ba)a statement of account,                  

(bb)an advertisement,”.                  

17.  Paragraph 46 (announcement of administrator's appointment) has effect as if sub-paragraph (2) required the administrator to                     send a notice of appointment also to every member of the society.U.K.

#### Process of administrationU.K.

18.  Paragraph 49 (administrator's proposals) has effect as if—                  

(a)after sub-paragraph (3) there were inserted—                  

“(3A)In the case of a relevant society, proposals under this paragraph may include provision for amending the society's rules only                        if the Financial Conduct Authority has issued a statement to the effect that it would register an amendment in the terms proposed                        if copies were sent to it for registration in accordance with section 10 of the Industrial and Provident Societies Act 1965                        F54.                  

(3B)The proposals must not include any measure which would be contrary to the provisions of the Industrial and Provident Societies                        Acts 1965 to 1968 or the Credit Unions Act 1979.                  

(3C)Sub-paragraph (3A) does not apply if the intended effect of the proposals is that the society will cease to be registered                        under the Industrial and Provident Societies Act 1965.”;                  

(b)in sub-paragraph (4)(c) the words “of whose address he is aware” were omitted; and                  

(c)sub-paragraph (6) were omitted.                  

F54Section 10 was amended by S.I. 1996/1738, 2001/2617, 2001/3649 and 2013/496.

19.  Paragraph 51 (requirement for initial creditors' meeting) has effect as if—U.K.

(a)after sub-paragraph (1) there were inserted—

“(1A)Each copy of an administrator's statement of proposals sent to a member under paragraph 49(4)(c) must be accompanied by an                        invitation to a members' meeting.”; and                  

(b)in sub-paragraphs (2) and (3) the reference to an initial creditors' meeting included a reference to a members' meeting.

20.  Paragraph 52 (requirement for initial creditors' meeting) has effect as if—U.K.

(a)in sub-paragraph (1) for “Paragraph 51(1)” there were substituted “ Paragraph 51(1) and (1A) ”; and

(b)where the administrator is required to summon an initial creditors' meeting under sub-paragraph (2), it required the administrator                        also to summon a members' meeting for a date within the period mentioned in sub-paragraph (3).

21.  In paragraph 53 (business and result of initial creditors' meeting), in sub-paragraphs (1) and (2) the reference to an initial                     creditors' meeting includes a reference to a members' meeting.U.K.

22.  Paragraph 54 (revision of administrator's proposals) has effect as if—U.K.

(a)in sub-paragraph (1) the reference to an initial creditors' meeting, and in sub-paragraphs (2) and (5) the reference to a                        creditors' meeting, included a reference to a members' meeting;

(b)after sub-paragraph (1) there were inserted—

“(1A)Where a revision is proposed in the case of a relevant society, sub-paragraphs (3A) to (3C) of paragraph 49 apply in relation                        to the revision.”;                  

(c)sub-paragraph (2) required the administrator—

(i)to summon a members' meeting (as well as a creditors' meeting); and

(ii)to send a statement of the proposed revision in the prescribed form (as well as to each creditor) to every member of the society;

(d)sub-paragraphs (2)(c) and (3) were omitted; and

(e)sub-paragraph (6) required the administrator to report any decision taken at a creditors' meeting and any decision taken at                        a members' meeting as soon as is reasonably practicable after the conclusion of both meetings.

23.  In paragraph 55 (failure to obtain approval of administrator's proposals) sub-paragraph (1) has effect as if after “an initial                     creditors' meeting” and “a creditors' meeting” there were inserted “or a members' meeting”.U.K.

24.  Paragraph 56 (further creditors' meetings) has effect as if—U.K.

(a)in sub-paragraph (1)(a) the reference to creditors of the company whose debts amount to at least 10% of the total debts of                        the company were a reference to at least 10% of the total number of creditors of the society or to creditors whose debts amount                        to at least 10% of the total debts of the society;

(b)sub-paragraph (1) also required the administrator to summon a meeting of the society's members if—

(i)a meeting is requested in the same manner prescribed for a creditors' meeting by at least 10% of the total number of those                        members; or

(ii)the administrator is directed to do so by the court; and

(c)in sub-paragraph (2) the reference to a creditors' meeting included a reference to a members' meeting.

25.  In paragraph 58 (correspondence instead of creditors' meeting)—U.K.

(a)a reference to a creditors' meeting includes a reference to a members' meeting; and

(b)in sub-paragraph (1) the reference to correspondence between the administrator and creditors includes a reference to correspondence                        between the administrator and members.

#### Functions of administratorU.K.

26.  Paragraph 59 (general powers) has effect as if it required the administrator to ensure compliance with the rules of the society                     and the provisions of the Industrial and Provident Societies Acts 1965 to 1968 and the Credit Unions Act 1979.                  

27.  Paragraph 61 (removal and appointment of director) has effect as if it required the administrator not to appoint any person                     to be an officer of the society unless that person is a fit and proper person to hold that position.U.K.

28.  In paragraph 64 (exercise of management power), in sub-paragraph (2)(b) the reference to an instrument includes a reference                     to the rules of the society.U.K.

29.  In paragraph 65 (distribution) sub-paragraph (1) has effect as if it provided that the administrator may make a distribution                     to a member of the society in relation to any amount owed by the society in respect of the member's shares where—U.K.

(a)the society is an authorised deposit taker; and

(b)the amount concerned is owed in respect of a deposit.

#### Ending administrationU.K.

30.  In paragraph 80 (termination of administration where objective achieved)—                  

(a)sub-paragraph (4) has effect as if it required the administrator, where the administrator sends a copy of a notice filed under                        sub-paragraph (2) to creditors, to send a copy also to the members of the society; and                  

(b)in sub-paragraph (5) a reference to a creditor includes a reference to a member of the society.                  

31.  In paragraph 84 (moving from administration to dissolution) sub-paragraph (5) has effect as if it required the administrator,                     where the administrator sends a copy of a notice under sub-paragraph (1) to creditors, to send a copy also to the members                     of the society.U.K.

#### Replacing administratorU.K.

32.  Paragraph 91 (supplying vacancy in office of administrator) has effect as if in sub-paragraph (1) after paragraph (c) there                     were inserted—                  

“(ca)in the case of a relevant society, the Financial Conduct Authority,                  

(cb)in the case of a relevant society which is or has been a PRA-authorised person (within the meaning given in section 2B(5)                           of the Financial Services and Markets Act 2000), the Financial Conduct Authority or the Prudential Regulation Authority,”.                  

33.  Paragraph 96 (substitution of administrator: competing floating charge-holder) has effect as if for sub-paragraph (4) there                     were substituted—U.K.

“(4)In relation to a relevant society whose registered office is situated in Scotland, sub-paragraph (3) has effect as if the                        following were substituted for paragraph (a)—                  

“(a)it has priority of ranking in accordance with section 464(4)(b) of the Companies Act 1985 as applied in relation to a relevant                           society by section 3 of the Industrial and Provident Societies Act 1967,”.”.                  

#### GeneralU.K.

34.  Paragraph 111 (interpretation) has effect as if—                  

(a)“administrative receiver” and “floating charge” were given the same meaning as in Schedule A1 to the 1986 Act (as applied                        in relation to a relevant society) F55; and                  

(b)there were inserted at the appropriate place—                  

““relevant society” means a society which is registered under the Industrial and Provident Societies Act 1965 and is not—                     

a private registered provider of social housing; or                              

registered as a social landlord under Part 1 of the Housing Act 1996 or under Part 2 of the Housing (Scotland) Act 2010,”.                              

F55For the meaning of “administrative receiver” see paragraph 1 of Schedule A1 as modified by paragraph 6(a) of this Schedule; and for the meaning of “floating charge” see the modification                              of Schedule A1 made by paragraph 7 of this Schedule.

### **PART 4**U.K.Modified application of Schedule 1 to the Insolvency Act 1986 to relevant societies (further modifications)

35.  Schedule 1 to the 1986 Act F56 applies in relation to a relevant society with the further modifications set out in this Part and with any other necessary                     modification.U.K.

F56Paragraph 2 of Schedule 1 was amended by the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5), **section 76(2)** and Schedule 13, Part 1.

36.  This Part has effect without limiting paragraph 26 of this Schedule.U.K.

37.  In this Part—U.K.

(a)a reference to a numbered paragraph is a reference to the paragraph so numbered in Schedule 1 to the 1986 Act;

(b)“the 1979 Act” means the Credit Unions Act 1979 F57; and

(c)“credit union” has the meaning given in section 31(1) of the 1979 Act.

F571979 c. 34.

38.  Paragraph 3 (power to borrow) has effect as if it provided that power to raise or borrow money and grant security over the                     property of the society—U.K.

(a)in the case of a credit union, is subject to—

(i)the provisions of the 1967 Act;

(ii)section 7 (shares) F58, section 7A (power to issue interest-bearing shares) F59 and section 8 (general prohibition on deposit-taking) F60 of the 1979 Act; and

(iii)the rules of the society containing provision in respect of the matters mentioned in paragraph 7 of Schedule 1 to the 1979                        Act (determination of the maximum amount of the interest in the shares of the society which may be held by any member);

(b)in the case of a relevant society which is not a credit union, is subject to—

(i)section 6 (maximum shareholding in society) F61 and section 7 (carrying on of banking by societies) F62 of the 1965 Act;

(ii)the provisions of the 1967 Act; and

(iii)the rules of the society containing provision in respect of the matters mentioned in paragraph 7 (determination of the maximum                        amount of a member's interest in shares) and paragraph 8 (determination whether the society may contract loans or receive                        deposits) of Schedule 1 to the 1965 Act; and

(c)in either such case, is subject to such other enactments and such rules of the society as govern or restrict the exercise                        of that power.

F58Section 7 was amended by S.I. 2011/2687.

F59Section 7A was inserted by S.I. 2011/2687.

F60Section 8 was amended by S.I. 2002/1501.

F61Section 6 was amended by S.I. 1997/627, 2011/2687 and 2014/210.

F62Section 7 was amended by the Criminal Procedure (Scotland) Act 1975 (c. 21), **section 289G**, by the Criminal Justice Act 1982 (c. 48), **section 46**, and by S.I. 1981/394.

39.  Paragraphs 15 (power to establish subsidiaries) and 16 (power to transfer property to subsidiaries) do not apply in relation                     to credit unions.U.K.

40.  Paragraph 16 has effect in relation to a relevant society other than a credit union as if—U.K.

(a)the reference to subsidiaries were a reference to subsidiaries within the meaning given in section 15 of the Friendly and                        Industrial and Provident Societies Act 1968 F63; and

(b)it provided that power to transfer to subsidiaries of the society the whole or any part of the business or property of the                        society is only exercisable in accordance with a special resolution under section 51 or 52 of the 1965 Act (as modified in                        relation to a relevant society by articles 14 and 15).

F631968 c. 55.

 Article 2(3)

## SCHEDULE 2U.K.Modified application of Part 26 of the Companies Act 2006 to relevant societies

1.  Unless the context otherwise requires and subject to any further modification in this Schedule, in Part 26 of the 2006 Act—U.K.

(a)a reference to the articles of a company is a reference to the rules of a relevant society;

(b)a reference to a class of members is to be ignored;

(c)a reference to a company includes a reference to a relevant society;

(d)a reference to a company's creditors does not include a reference to a member of a relevant society to whom an amount is owed                        by the society if, but only in so far as, the amount concerned is owed in respect of the member's shares;

(e)a reference to the directors of a company is a reference to the members of the committee of a relevant society;

(f)a reference to a member of a company is a reference to a person whose name is entered as a member in the register kept by                        a relevant society in accordance with section 44(1) of the 1965 Act;

(g)a reference to an officer of a company is a reference to an officer of a relevant society; and

(h)a reference to the registrar is a reference to the FCA in its capacity as the authority responsible for the registration of                        a relevant society under the 1965 Act.

2.  Part 26 of the 2006 Act applies in relation to a relevant society with the further modifications set out in the following                     paragraphs of this Schedule and with any other necessary modification.U.K.

3.  In section 895 (application of Part 26) subsection (2) has effect as if after the definition of “company” there were inserted—U.K.

““relevant society” means a society which is registered under the Industrial and Provident Societies Act 1965 and is not—                     

a private registered provider of social housing; or                              

registered as a social landlord under Part 1 of the Housing Act 1996 or under Part 2 of the Housing (Scotland) Act 2010.”.                              

4.  In section 899 (court sanction for compromise or arrangement) F64—U.K.

(a)in subsection (1) the reference to a majority in number representing 75% in value of the members present and voting at the                        meeting summoned under section 896 F65 is a reference to 75% of the members of a relevant society present and voting at that meeting; and

(b)in subsection (3)(b) the reference to contributories has the same meaning as it has in relation to a relevant society in the                        1986 Act F66.

F64Section 899 was amended by S.I. 2008/948 and 2011/1265.

F65Section 896 was amended by S.I. 2008/948.

F66For the meaning of “contributory” see section 79 of the 1986 Act, which has effect in relation to a relevant society with the modification in paragraph 1(b) of Schedule 1                              to this Order.

5.  Section 900 (powers of court to facilitate reconstruction or amalgamation) has effect as if after subsection (4) there were                     inserted—U.K.

“(4A)Subsection (4B) applies where a compromise or arrangement is proposed for the purposes of, or in connection with, a scheme                        for the reconstruction of a relevant society or the amalgamation of a relevant society with any other relevant society or                        any company.                  

(4B)An order under this section may only be made with respect to the compromise or arrangement if the Financial Conduct Authority—                  

(a)is satisfied that the compromise or arrangement is not contrary to the rules of the society or the provisions of the Industrial                           and Provident Societies Acts 1965 to 1968 or the Credit Unions Act 1979; and                  

(b)has issued a statement to that effect.”.                  

6.  Section 901 (obligations of company with respect to articles etc.) has effect as if after subsection (1) there were inserted—U.K.

“(1A)Where, in the case of a relevant society, the compromise or arrangement includes provision for amending the society's rules,                        the order may be made only if the Financial Conduct Authority has issued a statement to the effect that it would register                        an amendment in the terms proposed if copies were sent to it for registration in accordance with section 10 of the Industrial                        and Provident Societies Act 1965.                  

(1B)Subsection (1A) does not apply if the intended effect of the compromise or arrangement is that the society will cease to be                        registered under that Act.”.                  

7.  Where a copy of any order or other document is delivered to the FCA under section 899(4), 900(6) or 901(2) (in each case as                     applied in relation to a relevant society by article 2(3)), that provision also has effect as if it required the document                     concerned to be delivered—U.K.

(a)in the case of a relevant society which is or has been an authorised person but not a PRA-authorised person, also to the FCA                        in its capacity as the society's regulator;

(b)in the case of a relevant society which is or has been a PRA-authorised person, also to the Prudential Regulation Authority;

(c)in the case of a relevant society which is a relevant person, also to the scheme manager.

8.  In paragraph 7—U.K.

“PRA-authorised person” has the meaning given in section 2B(5) of FSMA;                  

“regulator” has the meaning given in section 3A of FSMA F67; and                  

“the scheme manager” means the body corporate established by the Financial Services Authority under section 212 of FSMA (the manager of the Financial                     Services Compensation Scheme) as originally enacted F68.                  

F67Sections 2B and 3A were substituted by the Financial Services Act 2012 (c. 21), **section 6(1)**, which substituted new Part 1A of FSMA.

F68Section 212 was amended by the Financial Services Act 2012, Schedule 10, paragraphs 1 and 2.

 Article 4

## SCHEDULE 3U.K.Modified application of other provisions of the Insolvency Act 1986

### InterpretationU.K.

1.  In this Schedule, unless otherwise specified, a reference to a section is a reference to a section of the 1986 Act.                  

### Modification of provisions applied by article 4U.K.

2.  Unless the context otherwise requires, the provisions applied by article 4 have effect—                  

(a)with the modifications set out in this Schedule;                  

(b)subject to those modifications, with the modifications in paragraph 1 of Schedule 1; and                  

(c)with any other necessary modification.                  

### Miscellaneous provisions applying to companies which are insolventU.K.

3.  For the purpose of construing the reference to an associate in subsection (3) of section 242 (gratuitous alienations (Scotland)),                     section 74 of the Bankruptcy (Scotland) Act 1985 F69 (meaning of “associate”) has effect as if—                  

(a)a reference to the directors of a company were a reference to the members of the committee of the society; and                  

(b)a reference to an officer of a company were a reference to an officer of the society.                  

F691985 c. 66. Section 74 was amended by the Civil Partnership Act 2004 (c. 33), **section 261(2)** and Schedule 28, paragraph 40, and by S.S.I. 2008/82.

### Interpretation for first group of PartsU.K.

4.  Section 251 (expressions used generally) has effect as if the definitions of “administrative receiver”, “director”, “floating                     charge” and “officer” were omitted.                  

### Insolvency practitioners and their qualificationU.K.

5.  Section 388 (meaning of “act as an insolvency practitioner”) F70 has effect as if in subsection (4) the definition of “company” included a reference to a relevant society.                  

F70Section 388 was amended by the Bankruptcy (Scotland) Act 1993 (c. 6), **section 11(1)**, by the Insolvency Act 2000, section 4(1) and (2)(a) and (c), and by S.I. 2009/1941. There are other amendments not relevant to this Order.

### Punishment of offencesU.K.

6.  Sections 430 (provision introducing Schedule of punishments), 431 (summary proceedings) F71 and 432 (offences by bodies corporate) F72 have effect as if a reference to an offence under the 1986 Act or a provision of that Act, in so far as it is a reference                     to an offence under a provision of that Act applied in relation to a relevant society, were a reference to the offence under                     that provision as so applied.                  

F71Section 431 was amended by the Criminal Procedure (Consequential Provisions) (Scotland) Act 1995, section 5 and Schedule 4, paragraph                              61.

F72Section 432 was amended by the Insolvency Act 2000, Schedule 1, paragraphs 1 and 11.

7.  Schedule 10 to the 1986 Act (punishment of offences under the Act) F73 has effect as if a reference in that Schedule to a provision which is applied in relation to a relevant society were a reference                     to that provision as so applied.U.K.

F73Schedule 10 was amended by the Insolvency Act 2000, Schedule 1, paragraphs 1 and 12 and Schedule 2, paragraphs 1 and 12, by the Enterprise Act 2002 (c. 40), **Schedule 17**, paragraphs 9 and 39, and by S.I. 2009/1941.

 Article 11(5)

## SCHEDULE 4U.K.Modified application of insolvency rules in relation to relevant societies

### **PART 1**U.K.Interpretation

1.  In this Schedule—U.K.
          -  “applied provisions”—  (a)
in Part 2, means the Parts of the Insolvency Rules 1986 which are applied by article 11(1) and (3);
(b)
in Part 3, means the Parts of the Insolvency (Scotland) Rules 1986 which are applied by article 11(2) and (4);
 
          -  “member-depositor”, in relation to a relevant society, means any member of the society to whom an amount is owed in respect of the member's                           shares where—                          (a)
the society is an authorised deposit taker; and
(b)
the amount concerned is owed in respect of a deposit;
 
          -  “Schedule A1” means Schedule A1 to the 1986 Act as applied in relation to a relevant society;                         
          -  “Schedule B1” means Schedule B1 to the 1986 Act as applied in relation to a relevant society; and                         
          -  “the scheme manager” means the body corporate established by the Financial Services Authority under section 212 of FSMA (the manager of the Financial                           Services Compensation Scheme) as originally enacted F74.                         

F74Section 212 was amended by the Financial Services Act 2012, Schedule 10, paragraphs 1 and 2.

2.  In this Schedule—U.K.

(a)a reference to the FCA is a reference to the FCA in its capacity as the authority responsible for the registration of a relevant                        society under the 1965 Act; and

(b)a reference to the society's regulator—

(i)in relation to a relevant society which is or has been a PRA-authorised person (within the meaning given in section 2B(5)                        of FSMA), is a reference to—

(aa)the FCA in its capacity as regulator (within the meaning given in section 3A of FSMA F75) of the society; and

(bb)the Prudential Regulation Authority;

(ii)in relation to any other relevant society which is or has been an authorised person, to the FCA in its capacity as regulator                        of the society.

F75Sections 2B and 3A were substituted by the Finance Act 2012, section 6(1), which substituted new Part 1A of FSMA.

### **PART 2**U.K.Modified application of the Insolvency Rules 1986

3.  This Part modifies the Parts of the Insolvency Rules 1986 which are applied by article 11(1) and (3) in relation to a relevant                     society which the courts in England and Wales have jurisdiction to wind up.U.K.

4.  Unless the context otherwise requires and subject to any further modification in this Part, the applied provisions have effect                     with the following general modifications—U.K.

(a)a reference to Part 1 or any provision of Part 1, 2, 4, 6, 7 or 17 of the 1986 Act is a reference to that Part or provision                        as applied in relation to a relevant society;

(b)an expression defined in the 1986 Act (but not an expression modified by this paragraph) has the meaning given in that Act                        as read with any modification made by this Order;

(c)a reference to an administrative receiver is a reference to an administrative receiver within the meaning given in Schedule                        A1 F76 in relation to a relevant society whose registered office is situated in England or Wales;

(d)a reference to the articles of a company is a reference to the rules of a relevant society;

(e)a reference to a class of creditors includes a reference to a single class of members of a relevant society that consists                        of the member-depositors of the society, but only in so far as the member-depositors are owed amounts in respect of deposits;

(f)a reference to a company includes a reference to a relevant society;

(g)a reference to a company's creditors, other than in a reference to a class of creditors, does not include a reference to a                        member of a relevant society to whom an amount is owed by the society if, but only in so far as, the amount concerned is owed                        in respect of the member's shares;

(h)a reference to the directors of a company is a reference to the members of the committee of a relevant society;

(i)a reference to a floating charge is a reference to a floating charge within the meaning given in Schedule A1 F77 in relation to a relevant society whose registered office is situated in England or Wales;

(j)a reference to a meeting of a company or of the members of a company is a reference to a general meeting of a relevant society                        and, in relation to a society whose rules allow the members to appoint delegates for meetings of the society or its members,                        includes a reference to a general meeting for which delegates have been appointed;

(k)a reference to an officer of a company is a reference to an officer of a relevant society; and

(l)a reference to the registrar of companies is a reference to the FCA.

F76For the meaning of “administrative receiver” see paragraph 1 of Schedule A1 as modified by paragraph 6(a) of Schedule 1 to this Order.

F77For the meaning of “floating charge” see the modification of Schedule A1 made by paragraph 7 of Schedule 1 to this Order.

5.  The applied provisions have effect as if they provided that a person appointed for the purpose by the FCA is entitled—U.K.

(a)to attend any meeting of creditors of a relevant society summoned for the purposes of Part 1 or 2 of the 1986 Act (as applied                        in relation to a relevant society);

(b)to attend any meeting of a committee established under paragraph 57 of Schedule B1; and

(c)to make representations as to any matter for decision at such a meeting.

6.  The applied provisions have effect with the further modifications set out in this Part and with any other necessary modification.U.K.

#### Proposal by directors for company voluntary arrangementU.K.

7.  In Rule 1.6 (additional disclosure for assistance of nominee), in paragraph (2)(a) the reference to any other company is a                     reference to any company or any other relevant society.                  

#### Consideration of proposals where moratorium obtainedU.K.

8.  In Rule 1.48 (summoning of meetings), in paragraph (3) the reference to all persons who are, to the best of the nominee's                     belief, members of the company is a reference to every member of the society.                  

#### Appointment of administrator by holder of floating chargeU.K.

9.  In Rule 2.16 (notice of appointment), in paragraph (5)(b) the reference to the date on which the floating charge was registered                     is a reference to the date on which—                  

(a)the FCA issued an acknowledgement under section 1(3) of the 1967 Act (charges on assets of English and Welsh societies) F78 of the application for the recording of the charge made in accordance with section 1(2) of that Act; or                  

(b)the debenture creating the charge was registered under section 9 of the Agricultural Credits Act 1928 F79 as applied by section 14 of that Act.                  

F78Section 1 was amended by S.I. 1996/1738, 2001/2617, 2001/3649 and 2013/496.

F791928 c. 43. Section 9 was amended by the Land Charges Act 1972 (c. 61), **Schedule 3**, paragraph 7, and by S.I. 2011/2436.

#### Process of administrationU.K.

10.  Rule 2.30 (limited disclosure) has effect as if it provided that on an application for disclosure under paragraph (4) a person                     appointed for the purpose by the FCA may appear and be heard, or make written representations.                  

11.  Rule 2.31 (release from duty to submit statement of affairs; extension of time) has effect as if it provided that on an application                     under paragraph (2) for release or extension of time a person appointed for the purpose by the FCA (in addition to the administrator)                     may appear and be heard, or make written representations.U.K.

#### Meetings and reportsU.K.

12.  In the following Rules a reference to a creditors' meeting includes a reference to a members' meeting—                  

(a)Rule 2.34 (meetings to consider administrator's proposals);                  

(b)Rule 2.35 (creditors' meetings generally);                  

(c)Rule 2.36 (the chairman at meetings);                  

(d)Rule 2.43 (resolutions); and                  

(e)Rule 2.46 (notice to creditors).                  

13.  Rule 2.35 has effect as if—U.K.

(a)paragraph (3) required the administrator, in fixing the venue for the meeting, to have regard to the convenience—

(i)in the case of a members' meeting, of the members; and

(ii)of any person appointed for the purpose of attending the meeting by the FCA, by the society's regulator or, in the case of                        a relevant society which is a relevant person, by the scheme manager; and

(b)paragraph (4) required 14 days' notice of a members' meeting to be given to all the members.

14.  Rule 2.37 (meeting requisitioned by creditors) has effect as if it required the expenses of summoning and holding a members'                     meeting requested under paragraph 52(2) or 56(1) of Schedule B1 to be paid out of the assets of the society as an expense                     of the administration.U.K.

15.  Rule 2.43 has effect as if—U.K.

(a)in paragraph (1) the words “(in value)” were omitted; and

(b)paragraph (2) were omitted.

16.  In Rule 2.45 (revision of the administrator's proposals)—U.K.

(a)in paragraph (3) ignore the words “Subject to paragraph 54(3),”; and

(b)ignore paragraphs (4) and (5).

17.  In Rule 2.47 (reports to creditors), in paragraphs (1)(g) and (4) the reference to the creditors includes a reference to the                     members of the society.U.K.

18.  In Rule 2.48 (correspondence instead of creditors' meetings)—U.K.

(a)in paragraph (1)—

(i)the reference to a resolution by the creditors includes a reference to a resolution by the members of the society;

(ii)in the case of a members' resolution the reference to every creditor who is entitled to be notified of a creditors' meeting                        is a reference to every member;

(b)in paragraph (2), in relation to correspondence with the members, ignore the reference to the statement on entitlement to                        vote required by Rule 2.38; and

(c)in paragraphs (6) and (9) a reference to a creditors' meeting includes a reference to a members' meeting.

19.  Rule 2.49 (venue and conduct of company meeting) has effect as if—U.K.

(a)paragraphs (1) to (4) and (7) were omitted; and

(b)in paragraph (5A) for sub-paragraph (a) there were substituted—

“(a)in the case of a relevant society (within the meaning given in section 74(1) of the Industrial and Provident Societies Act                           1965 F80), in accordance with the law of England and Wales;”.                  

F80The definition of “relevant society” is inserted by article 17(5) of this Order.

#### Distributions to creditorsU.K.

20.  Rule 2.68 (distributions to creditors: introduction) has effect in relation to a distribution, or a proposal to make a distribution,                     to member-depositors as if paragraph (2) required the administrator to give the notice referred to also to those members.                  

21.  Rule 2.69 (debts of insolvent society to rank equally) has effect as if the first reference to debts included a reference                     to any amount owed by the society in respect of a member's shares where—U.K.

(a)the society is an authorised deposit taker; and

(b)the amount concerned is owed in respect of a deposit.

22.  Rule 2.85 (mutual credits and set off) has effect as if in addition to the matters excluded from “mutual dealings” in paragraph                     (2) that paragraph excluded any mutual dealings between a relevant society and a member of the society to whom an amount is                     owed by the society if, but only in so far as, the amount concerned is owed in respect of the member's shares.U.K.

23.  Rule 2.95 (notice of proposed distribution) has effect as if—U.K.

(a)paragraph (1) required the administrator also to give notice where the administrator is proposing to make a distribution to                        member-depositors; and

(b)paragraph (2)—

(i)required the notice to be sent also to every member-depositor and the FCA;

(ii)provided that for the purposes of that notice the reference to unsecured creditors included a reference to member-depositors.

24.  In Rule 2.97 (declaration of dividend) member-depositors are to be regarded as a single class of creditors for the purposes                     of paragraph (1).U.K.

25.  Rule 2.98 (notice of declaration of dividend) has effect as if—U.K.

(a)the persons who are entitled to receive notice under paragraph (1) included—

(i)every member-depositor; and

(ii)the FCA; and

(b)paragraph (2)—

(i)required that notice to give particulars of any distribution to member-depositors; and

(ii)provided that the member-depositors are unsecured creditors for the purpose of sub-paragraph (c).

26.  In Rule 2.99 (payment of dividends and related matters), in paragraph (2) the reference to any creditor includes a reference                     to any member-depositor.U.K.

27.  Rule 2.100 (notice of no dividend, or no further dividend) has effect as if—U.K.

(a)it required the administrator to send a copy of any notice to the FCA, to the society's regulator and, in the case of a relevant                        society which is a relevant person, to the scheme manager; and

(b)the reference to creditors included a reference to member-depositors.

28.  Rule 2.103 (disqualification from dividend) has effect as if it required notice of the application and a copy of the order                     made on the application to be given to the FCA, to the society's regulator and, in the case of a relevant society which is                     a relevant person, to the scheme manager.U.K.

#### Ending administrationU.K.

29.  In Rule 2.112 (applications for extension of administration) the reference to the creditors in paragraph (4) and the second                     reference to the creditors in paragraph (5) include a reference to the members of the society.                  

30.  In Rule 2.113 (notice of end of administration), in paragraphs (6) and (7) the reference to a creditor includes a reference                     to a member of the society.U.K.

#### Replacing administratorU.K.

31.  Rule 2.120 (notice of intention to resign) has effect as if the persons who are entitled to receive notice of the administrator's                     intention to resign included the FCA, the society's regulator and, in the case of a relevant society which is a relevant person,                     the scheme manager.                  

32.—(1) Rule 2.122 (application to court to remove administrator from office) and Rule 2.125 (application to replace administrator)                     have effect as if the persons who are entitled to receive notice of the matter concerned included the FCA, the society's regulator                     and, in the case of a relevant society which is a relevant person, the scheme manager.U.K.

(2) Sub-paragraph (1) does not apply in relation to—

(a)the FCA, if the FCA made the application for the administration order; or

(b)the society's regulator, if the society's regulator made the application.

#### Quorum at meetingsU.K.

33.  Rule 12A.21 (quorum at meeting of creditors) F81 has effect in relation to a relevant society as if—                  

(a)in paragraphs (1) and (4) the reference to any meeting of creditors included a reference to any meeting of members of the                        society; and                  

(b)paragraph (2) provided that a quorum, in the case of a meeting of members—                  

(i)is to be determined according to the rules of the society which lay down a quorum for a general meeting of the society; or                  

(ii)if there are no such rules, is at least two members who are entitled to vote, or both of them if their number does not exceed                        two.                  

F81Part 12A (provisions of general effect) was inserted by S.I. 2010/686.

#### FormsU.K.

34.  In Rule 12A.30 (forms for use in insolvency proceedings)—                  

(a)any form prescribed for use by paragraph (1) which is used for the purposes of Part 1 or 2 of the 1986 Act is to be read with                        the modifications set out in this Order (so far as applicable for the form concerned); and                  

(b)the requirement in paragraph (2) to use a form with such variations as the circumstances may require includes a requirement                        to use it with such variations as are necessary to take account of applicable modifications.                  

#### “Prescribed part”U.K.

35.  In Rule 13.13 (expressions used generally in the Insolvency Rules 1986), in paragraph (15) (the definition of “prescribed                     part”) the reference to the Insolvency Act 1986 (Prescribed Part) Order 2003 F82 is a reference to that Order as applied in relation to a relevant society by article 12 of, and paragraph 1 of Schedule 5                     to, this Order.                  

F82S.I. 2003/2097.

### **PART 3**U.K.Modified application of the Insolvency (Scotland) Rules 1986

36.  This Part modifies the Parts of the Insolvency (Scotland) Rules 1986 which are applied by article 11(2) and (4) in relation                     to a relevant society which a sheriff court in Scotland has jurisdiction to wind up.U.K.

37.  Unless the context otherwise requires and subject to any further modification in this Part, the applied provisions have effect                     with the general modifications set out in paragraphs 4 and 5 (read as if set out in this paragraph), except that—U.K.

(a)sub-paragraph (c) of paragraph 4 is omitted for this purpose; and

(b)a reference to a floating charge is a reference to a floating charge within the meaning given in Schedule A1 F83 in relation to a relevant society whose registered office is situated in Scotland.

F83For the meaning of “floating charge” see the modification of Schedule A1 made by paragraph 7 of Schedule 1 to this Order.

38.  The applied provisions have effect with the further modifications set out in this Part and with any other necessary modification.U.K.

#### Proposal by directors for company voluntary arrangementU.K.

39.  In Rule 1.6 (additional disclosure for assistance of nominee), in paragraph (2)(a) the reference to any other company is a                     reference to any company or any other relevant society.                  

#### Consideration of proposals where moratorium obtainedU.K.

40.  In Rule 1.40 (summoning of meetings; procedure at meetings etc.), in paragraph (3) the reference to all persons who are, to                     the best of the nominee's belief, members of the company is a reference to every member of the society.                  

#### Appointment of administrator by holder of floating chargeU.K.

41.  In Rule 2.10 (notice of appointment), in paragraph (5)(b) the reference to the date on which the floating charge was registered                     is a reference to the date—                  

(a)stated in the FCA's acknowledgement issued under section 4(3) of the 1967 Act (filing of information relating to charges)                        F84 on which the delivery of a copy of the instrument creating the charge was effected; or                  

(b)on which the charge was registered under Part 2 of the Agricultural Credits (Scotland) Act 1929 F85.                  

F84Section 4 was amended by the Companies (Floating Charges and Receivers) (Scotland) Act 1972 (c. 67), **section 10(iv)**, by the Companies Consolidation (Consequential Provisions) Act 1985 (c.9), **section 26(4)**, and by S.I. 1996/1738, 2001/2617, 2001/3649 and 2013/496.

F851929 c. 13.

#### Process of administrationU.K.

42.  Rule 2.22 (limited disclosure) has effect as if it provided that on an application for disclosure under paragraph (4) a person                     appointed for the purpose by the FCA may appear and be heard, or make written representations.                  

43.  Rule 2.23 (release from duty to submit statement of affairs; extension of time) has effect as if it provided that on an application                     under paragraph (2) for release or extension of time a person appointed for the purpose by the FCA may appear and be heard,                     or make written representations.U.K.

#### MeetingsU.K.

44.  In the following Rules a reference to a creditors' meeting includes a reference to a members' meeting—                  

(a)Rule 2.27 (meetings to consider administrator's proposals);                  

(b)Rule 2.27A (suspension and adjournment);                  

(c)Rule 2.28 (correspondence instead of creditors' meetings), except paragraph (9); and                  

(d)Rule 2.35 (notices to creditors).                  

45.  Rule 2.27 has effect as if in paragraph (3) the reference to the creditors included a reference to the members of the society.U.K.

46.  In Rule 2.28—U.K.

(a)in paragraphs (3), (4) and (10), in the case of a members' resolution, a reference to the creditors is a reference to the                        members of the society; and

(b)in paragraph (6), in relation to correspondence with the members ignore the reference to the statement of claim and account                        or voucher referred to in Rule 2.26C.

47.  In Rule 2.29 (applicable law (company meetings)) ignore paragraph (a).U.K.

48.  In Rule 2.34 (revision of the administrator's proposals)—U.K.

(a)in paragraph (2) ignore the words “Subject to paragraph 54(3),”; and

(b)ignore paragraphs (3) and (4).

49.  In Rule 2.35, in paragraph (1)(a), in the case of a members' meeting the reference to every creditor who received notice of                     the meeting is a reference to every member of the society.U.K.

#### Distributions to creditorsU.K.

50.  In Rules 2.40 (distributions to creditors: introduction) and Rule 2.41A (payments of dividends) a reference to creditors includes                     a reference to member-depositors, but only in so far as the member-depositors are owed amounts in respect of deposits.                  

51.  Rule 2.41 (distributions to creditors) has effect in relation to a proposal to make a distribution to member-depositors as                     if—U.K.

(a)for paragraph (1) there were substituted—

“(1)Subject to the modifications set out below and to any other necessary modifications, Chapter 9 of Part 4 (distribution of                        company's assets by liquidator), except Rule 4.67 (order of priority of expenses of liquidation), applies with regard to a                        proposal to make a distribution to the member-depositors of a relevant society as it applies with regard to claims to a dividend                        out of the assets of a company in liquidation.”.                  

(b)for paragraph (2) there were substituted—

“(2)Subject to paragraphs (2A), (2B) and (5) below, in the application in relation to a relevant society of Chapter 9 of Part                        4 or of any provision of the Bankruptcy Act as applied by Rule 4.16 or Rule 4.68 (application of the Bankruptcy Act)—                  

(a)a reference to the articles of a company is a reference to the rules of the society;                  

(b)a reference to a company is a reference to the society;                  

(c)a reference to a creditor does not include a reference to a member of the society to whom an amount is owed by the society                           if, but only in so far as, the amount concerned is owed in respect of the member's shares;                  

(d)a reference to the date of commencement of winding up is a reference to the date on which the society entered administration;                  

(e)a reference to the liquidation is a reference to the administration;                  

(f)a reference to the liquidation committee is a reference to the creditors' committee in the administration; and                  

(g)a reference to the liquidator is a reference to the administrator of the society.                  

(2A)In Rule 4.66 (order of priority in distribution)—                  

(a)in paragraph (1) a reference to ordinary debts includes a reference to any amount owed by the society in respect of a member's                           shares where—                  

(i)the society is an authorised deposit taker; and                  

(ii)the amount concerned is owed in respect of a deposit; and                  

(b)in paragraph (2) the reference to section 242 (gratuitous alienations (Scotland)) is a reference to that section as applied                           in relation to a relevant society by an order made under section 255 of the Enterprise Act 2002 F86.                  

(2B)In section 52 of the Bankruptcy Act (estate to be distributed in respect of accounting periods) F87, in subsection (3) a reference to a creditor includes a reference to a member-depositor of a relevant society, but only in                        so far as the member is owed an amount in respect of deposits.”;                  

(c)in paragraph (4) the reference to the administrator's statement of proposals, as approved by the creditors, is a reference                        to that statement, as approved by the creditors and members of the society; and

(d)at the end there were added—

“(6)In this Rule—                  

“member-depositor”, in relation to a relevant society, means any member of the society to whom an amount is owed in respect of the member's                        shares where—                  

the society is an authorised deposit taker; and                           

the amount concerned is owed in respect of a deposit; and                           

“relevant society” has the meaning given in section 74(1) of the Industrial and Provident Societies Act 1965 F88.”.                  

F862002 c. 40.

F87Section 52 applies with regard to a proposal to make a distribution to member-depositors by virtue of the application of paragraph (3)                              of Rule 2.41. Section 52 was amended by the Bankruptcy (Scotland) Act 1993 (c. 6), **section 11(3)** and Schedule 1, paragraph 21, and section 11(4) and Schedule 2; by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), **Schedule 1**, paragraphs 1 and 44, and section 226(2) and Schedule 6; and by S.I. 2003/2109.

F88The definition of “relevant society” is inserted by article 17(5) of this Order.

#### Ending administrationU.K.

52.  In Rule 2.45 (notice of end of administration), in paragraph (4)(d) the reference to a creditor includes a reference to a                     member of the society.                  

#### Replacing administratorU.K.

53.  Rule 2.50 (notice of intention to resign) has effect as if the persons who are entitled to receive notice of the administrator's                     intention to resign included the FCA, the society's regulator and, in the case of a relevant society which is a relevant person,                     the scheme manager.                  

54.—(1) Rule 2.53 (application to replace administrator) and Rule 2.56 (application to court to remove administrator from office)                     have effect as if the persons who are entitled to receive notice of the matter concerned included the FCA, the society's regulator                     and, in the case of a relevant society which is a relevant person, the scheme manager.U.K.

(2) Sub-paragraph (1) does not apply in relation to—

(a)the FCA, if the FCA made the application for the administration order; or

(b)the society's regulator, if the society's regulator made the application.

#### Quorum at meetingsU.K.

55.  Rule 7.6 (meetings requisitioned) has effect as if it required the expenses of summoning and holding a members' meeting requested                     under paragraph 52(2) or 56(1) of Schedule B1 to be paid out of the assets of the society as an expense of the administration.                  

56.  Rule 7.7 (quorum) has effect in relation to a relevant society as if—U.K.

(a)paragraph (1) provided that a quorum, in the case of a meeting of members of the society—

(i)is to be determined according to the rules of the society which lay down a quorum for a general meeting of the society; or

(ii)if there are no such rules, is at least two members who are entitled to vote, or both of them if their number does not exceed                        two; and

(b)in paragraph (3) the reference to any meeting of creditors included a reference to any meeting of members of the society.

57.  Rule 7.12 (resolutions) has effect in relation to a meeting of members of the society as if the words “in value” were omitted.U.K.

#### FormsU.K.

58.  In Rule 7.30 (forms for use in insolvency proceedings)—                  

(a)any form prescribed for use by this Rule which is used for the purposes of Part 1 or 2 of the 1986 Act is to be read with                        the modifications set out in this Order (so far as applicable for the form concerned); and                  

(b)the reference to the use of a form with such variations as circumstances require includes a reference to its use with such                        variations as are necessary to take account of applicable modifications.                  

 Article 12

## SCHEDULE 5U.K.Application of other subordinate legislation with modifications

### Application of the Insolvency Act 1986 (Prescribed Part) Order 2003U.K.

1.  The Insolvency Act 1986 (Prescribed Part) Order 2003 F89 applies in relation to a relevant society which is in administration, and for that purpose—                  

(a)a reference to a company includes a reference to a relevant society; and                  

(b)a reference to section 176A of the 1986 Act (share of assets for unsecured creditors) F90 is a reference to that section as applied in relation to a relevant society by article 3 of this Order.                  

F89S.I. 2003/2097.

F90Section 176A was inserted by the Enterprise Act 2002 (c.40), **section 252**.

### Modified application of the Pension Protection Fund (Entry Rules) Regulations 2005U.K.

2.—(1) In the Pension Protection Fund (Entry Rules) Regulations 2005 F91 regulation 6 (circumstances in which insolvency proceedings in relation to the employer are stayed or come to an end) and                     regulation 9 (confirmation of scheme status by insolvency practitioner) apply in relation to a relevant society, and for that                     purpose have effect with the following modifications.                  

(2) In regulation 6, in paragraph (1)(a), except paragraphs (iv), (v) and (vi)—

(a)a reference to a company includes a reference to a relevant society;                  

(b)a reference to a provision of the 1986 Act or the Insolvency Rules 1986 is a reference to that provision as applied in relation                        to a relevant society; and                  

(c)in paragraph (ii) the reference to the directors of the company is a reference to the members of the committee of the society.                  

(3) In regulation 9 a reference to a company includes a reference to a relevant society.

F91S.I. 2005/590; relevant amending instruments are S.I. 2005/993; 2005/2153 and 2009/451.

### Modified application of the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2010U.K.

3.—(1) The Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2010 F92 has effect in relation to a relevant society which is an insurer (within the meaning given by article 2 of the Financial                     Services and Markets Act 2000 (Insolvency) (Definition of “Insurer”) Order 2001 F93)—                  

(a)with the modifications in sub-paragraph (2); and                  

(b)as if article 3 (application and modification of the Insolvency Rules 1986 in relation to insurers) and article 4 (application                        and modification of the Insolvency (Scotland) Rules 1986 in relation to insurers) were omitted.                  

(2) Article 2 (application and modification of Part 2 of the 1986 Act in relation to insurers) has effect as if—

(a)before “Part 2” there were inserted “Subject to paragraph (1A),”;                  

(b)after paragraph (1) there were inserted—                  

“(1A)In the case of an insurer which is a relevant society (within the meaning given in section 74(1) of the Industrial and Provident                        Societies Act 1965 F94), the reference in paragraph (1) to the modifications specified in the Schedule to this Order is a reference to the modifications—                  

(a)made by the Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order                           2014 in applying Part 2 of the 1986 Act in relation to a relevant society; and                  

(b)specified in the Schedule to this Order, except those specified in—                  

(i)paragraph 3 (modification of paragraph 49(4) of Schedule B1: administrator's proposals);                  

(ii)paragraph 4 (modification of paragraph 53(2) of Schedule B1: business and result of initial creditors' meeting);                  

(iii)paragraph 5 (modification of paragraph 54(2)(b) of Schedule B1: revision of administrator's proposals); and                  

(iv)paragraph 9 (modification of paragraph 91(1) of Schedule B1: supplying vacancy in office of administrator).”.                  

F92S.I. 2010/3023.

F93S.I. 2001/2634.

F94The definition of “relevant society” is inserted by article 17(5) of this Order.

## Explanatory Note

(This note is not part of the Order)

This Order applies Part 1 (company voluntary arrangements) and Part 2 (administration) of the Insolvency Act 1986 (c. 45)                        (“the 1986 Act”) and Part 26 (arrangements and reconstructions) of the Companies Act 2006 (c. 46) (“the 2006 Act”) to relevant societies. A relevant society is a society registered under the Industrial and Provident Societies Act 1965                        (c. 12) (“the 1965 Act”) other than a society which is a private registered provider of social housing or is registered as a social landlord. A                        society registered under the 1965 Act is a co-operative society, a community benefit society or a credit union.                     

Article 2(1) and (2) applies Parts 1 and 2 of the 1986 Act with the modifications in Schedule 1. Part 1 of Schedule 1 sets                        out general modifications. Part 2 of Schedule 1 further modifies provisions made for voluntary arrangements, including Schedule                        A1 to the 1986 Act which provides for obtaining a moratorium. Part 3 of Schedule 1 further modifies provisions made for administration,                        which are in Schedule B1 to the 1986 Act. Part 4 modifies the powers of an administrator in Schedule 1 to the 1986 Act.                     

Article 2(3) applies Part 26 of the 2006 Act with the modifications set out in Schedule 2.

Articles 3 to 21 make provision which is in consequence of or incidental to the application of law about company arrangements                        and administration.                     

Article 3 applies section 176A of the 1986 Act (share of assets for unsecured creditors) with modifications to relevant societies                        which are in administration.                     

Article 4 and Schedule 3 apply other provisions of the 1986 Act with modifications for the purpose of relevant society voluntary                        arrangements and administration.                     

Articles 5 to 10 apply (with modifications) provisions of the Financial Services and Markets Act 2000 (c. 8) which concern                        the rights in insolvency proceedings of the Financial Conduct Authority, the Prudential Regulation Authority and the manager                        of the Financial Services Compensation Scheme.                     

Article 11 and Schedule 4 apply the Insolvency Rules 1986 and the Insolvency (Scotland) Rules 1986 with modifications for                        the purpose of relevant society voluntary arrangements and administration.                     

Article 12 and Schedule 5 provide for the application of other subordinate legislation (with modifications) to relevant societies.

Articles 13 to 16 apply sections 50 to 52 and 59 of the 1965 Act with modifications to relevant societies in administration.                        Sections 50 to 52 provide for amalgamation, transfer of engagements and conversion into companies. Section 59 provides that                        where a society is to be dissolved or a society's engagements are transferred, the society may not be dissolved and its registration                        may not be cancelled until its property has been conveyed or transferred to the persons entitled to it.                     

Article 17 amends the 1965 Act in consequence of applying Part 2 of the 1986 Act to a relevant society whose registered office                        is in England and Wales. The amendment prohibits the appointment of an administrative receiver by the holder of a floating                        charge who is entitled to appoint an administrator. The holder of a floating charge given by a society whose registered office                        is in Scotland is not competent to appoint a receiver.                     

A full impact assessment has not been produced for this instrument as no significant impact on the costs of business or the                        voluntary sector is foreseen.