Financial Services and Markets Bill - continued        House of Lords
PART XXIV, INSOLVENCY - continued

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Winding up by the court
Winding-up petitions.     354. - (1) The Authority may present a petition to the court for the winding up of a body which-
 
 
    (a) is, or has been, an authorised person;
 
    (b) is, or has been, an appointed representative; or
 
    (c) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
      (2) In subsection (1) "body" includes any partnership.
 
      (3) On such a petition, the court may wind up the body if-
 
 
    (a) the body is unable to pay its debts within the meaning of section 123 or 221 of the 1986 Act (or Article 103 or 185 of the 1989 Order); or
 
    (b) the court is of the opinion that it is just and equitable that it should be wound up.
      (4) If a body is in default on an obligation to pay a sum due and payable under an agreement, it is to be treated for the purpose of subsection (3)(a) as unable to pay its debts.
 
      (5) "Agreement" means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the body concerned.
 
      (6) Subsection (7) applies if a petition is presented under subsection (1) for the winding up of a partnership-
 
 
    (a) on the ground mentioned in subsection (3)(b); or
 
    (b) in Scotland, on a ground mentioned in subsection (3)(a) or (b).
      (7) The court has jurisdiction, and the 1986 Act (or the 1989 Order) has effect, as if the partnership were an unregistered company as defined by section 220 of that Act (or Article 184 of that Order).
 
Winding-up petitions: EEA and Treaty firms.     355. The Authority may not present a petition to the court under section 354 for the winding up of-
 
 
    (a) an EEA firm which qualifies for authorisation under Schedule 3, or
 
    (b) a Treaty firm which qualifies for authorisation under Schedule 4,
  unless it has been asked to do so by the home state regulator of the firm concerned.
 
Insurance companies: service of petition etc. on Authority.     356. - (1) If a person other than the Authority presents a petition for the winding up of an insurance company which is an authorised person, the petitioner must serve a copy of the petition on the Authority.
 
      (2) If a person other than the Authority applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of an insurance company which is an authorised person, the applicant must serve a copy of the application on the Authority.
 
Liquidator's duty to report to Authority.     357. If-
 
 
    (a) a company is being wound up voluntarily or a body is being wound up on a petition presented by a person other than the Authority, and
 
    (b) it appears to the liquidator that the company or body is carrying on, or has carried on, a regulated activity in contravention of the general prohibition,
  the liquidator must report the matter to the Authority without delay.
 
Authority's powers to participate in proceedings.     358. - (1) This section applies if a person other than the Authority presents a petition for the winding up of a body which-
 
 
    (a) is, or has been, an authorised person;
 
    (b) is, or has been, an appointed representative; or
 
    (c) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
      (2) The Authority is entitled to be heard-
 
 
    (a) at the hearing of the petition; and
 
    (b) at any other hearing of the court in relation to the body under or by virtue of Part IV or V of the 1986 Act (or Part V or VI of the 1989 Order).
      (3) Any notice or other document required to be sent to a creditor of the body must also be sent to the Authority.
 
      (4) A person appointed for the purpose by the Authority is entitled-
 
 
    (a) to attend any meeting of creditors of the body;
 
    (b) to attend any meeting of a committee established for the purposes of Part IV or V of the 1986 Act under section 101 of that Act or under section 141 or 142 of that Act;
 
    (c) to attend any meeting of a committee established for the purposes of Part V or VI of the 1989 Order under Article 87 of that Order or under Article 120 of that Order; and
 
    (d) to make representations as to any matter for decision at such a meeting.
      (5) If, during the course of the winding up of a company, a compromise or arrangement is proposed between the company and its creditors, or any class of them, the Authority may apply to the court under section 425 of the Companies Act 1985 (or Article 418 of the Companies (Northern Ireland) Order 1986).
 
 
Bankruptcy
Petitions.     359. - (1) The Authority may present a petition to the court-
 
 
    (a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or
 
    (b) under section 5 of the 1985 Act for the sequestration of the estate of an individual.
      (2) But such a petition may be presented only on the ground that-
 
 
    (a) the individual appears to be unable to pay a regulated activity debt; or
 
    (b) the individual appears to have no reasonable prospect of being able to pay a regulated activity debt.
      (3) An individual appears to be unable to pay a regulated activity debt if he is in default on an obligation to pay a sum due and payable under an agreement.
 
      (4) An individual appears to have no reasonable prospect of being able to pay a regulated activity debt if-
 
 
    (a) the Authority has served on him a demand requiring him to establish to the satisfaction of the Authority that there is a reasonable prospect that he will be able to pay a sum payable under an agreement when it falls due;
 
    (b) at least three weeks have elapsed since the demand was served; and
 
    (c) the demand has been neither complied with nor set aside in accordance with rules.
      (5) A demand made under subsection (4)(a) is to be treated for the purposes of the 1986 Act (or the 1989 Order) as if it were a statutory demand under section 268 of that Act (or Article 242 of that Order).
 
      (6) For the purposes of a petition presented in accordance with subsection (1)(b)-
 
 
    (a) the Authority is to be treated as a qualified creditor; and
 
    (b) a ground mentioned in subsection (2) constitutes apparent insolvency.
      (7) "Individual" means an individual-
 
 
    (a) who is, or has been, an authorised person; or
 
    (b) who is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
      (8) "Agreement" means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the individual concerned.
 
      (9) "Rules" means-
 
 
    (a) in England and Wales, rules made under section 412 of the 1986 Act;
 
    (b) in Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and
 
    (c) in Northern Ireland, rules made under Article 359 of the 1989 Order.
 
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Prepared 11 February 2000