HM Treasury Consults on Draft Rules for Insolvency Regime for Payment and Electronic Money Institutions

HM Treasury has published a supplementary annex to its consultation on the U.K. Government's proposed Special Administration Regime for payment institutions and electronic money institutions. The SAR would address shortcomings of the existing insolvency regime for PIs and EMIs and would apply alongside Part 24 of the Financial Services and Markets Act 2000, which would also be extended to apply in full to PIs and EMIs.

HM Treasury's main consultation document set out the policy proposals and rationale for the SAR along with details of the draft regulations that would create the new regime. Responses to the main consultation should be submitted by January 14, 2021. The supplementary annex sets out draft rules for the proposed SAR. Given its later publication date, responses to the supplementary annex consultation have a later submission deadline of January 28, 2021.

The rules are closely linked to the Investment Bank SAR rules and will cover areas such as:
 

• The procedure for applying to court for a special administration order;
• The process for the special administration, including the administrator's obligation to advertise and notify certain parties of his/her appointment and the particulars to be included in the administrator's statement of proposals;
• Payment of the expenses of the special administration;
• The mechanics for distributions to creditors;
• The powers of administrators and provisions concerning the fixing of remuneration; and
• The procedure by which a special administration can be brought to an end.

View HMT's supplementary annex to the consultation.

View details of HMT's consultation on Insolvency Changes for Payment and Electronic Money Institutions.

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