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Amendments to the Insolvency Regulations 2015

Past version: effective from 21/10/2015 - 20/10/2015
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(1) The Insolvency Regulations 2015 are amended as follows.
(2) In section 51(1)(a), for the word "Civil", the words "ADGM Court" shall be substituted.
(3) In section 53(10), for the word "Civil", the words "ADGM Court" shall be substituted.
(4) In section 58(10), for the word "Civil", the words "ADGM Court" shall be substituted.
(5) In section 107(1)(i), following the words "corporation tax" insert the words "or any similar tax applicable to Limited Liability Partnerships".
(6) In section 165(1)(a), for the word "Civil", the words "ADGM Court" shall be substituted.
(7) In section 167(9), for the word "Civil", the words "ADGM Court" shall be substituted.
(8) Following section 198, a new subsection 198A shall be inserted as follows:
"198A. Acceptance of shares, etc. as consideration for sale of company property
(1) This Section applies, in the case of a Company proposed to be, or being, wound up voluntarily, where the whole or part of the Company's business or property is proposed to be transferred or sold to another company whether or not it is a Company within the meaning of the Companies Regulations 2015 ("the transferee company").
(2) With the requisite sanction, the liquidator of the Company being, or proposed to be, wound up ("the transferor company") may receive, in compensation or part compensation for the transfer or sale, shares, policies or other like interests in the transferee company for distribution among the members of the transferor company.
(3) The sanction required under subsection (2) is —
(a) in the case of a members' voluntary winding up, that of a special resolution of the company conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, and
(b) in the case of a creditor's voluntary winding up, that of either the Court or the Liquidation Committee.
(4) Alternatively to subsection (2), the liquidator may (with the sanction) enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto), participate in the profits, or receive any other benefit from the transferee company.
(5) A sale or arrangement in pursuance of this Section is binding on members of the transferor limited liability partnership.
(6) A special resolution is not invalid for purposes of this Section by reason that it is passed before or concurrently with a resolution for voluntary winding-up or for appointing liquidators; but, if an order is made within a year for winding-up of the Company by the Court, the special resolution is not valid unless sanctioned by the Court.
(7) If a special resolution of the Company has provided the sanction requisite for the liquidator under this Section, a member of the transferor company who did not vote in favour of providing the sanction required for the liquidator under this Section may express his dissent from it in writing addressed to the liquidator and left at the registered office of the Company within 7 days after the date on which that sanction was given, and require the liquidator either to abstain from carrying the arrangement so sanctioned into effect or to purchase his interest at a price to be determined by agreement or arbitration under this Section.
(8) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the Company is dissolved and be raised by the liquidator in such manner as may be determined by special resolution."
(9) In section 204(3), for the words "is a person authorised under the Financial Market Regulations", the words "is an Authorised Person or Recognised Body" shall be substituted.
(10) In section 207(1), for the words "a person authorised under the Financial Market Regulations", the words "an Authorised Person or Recognised Body" shall be substituted.
(11) In section 215(3)(a), for the words "in accordance with the Financial Market Regulations if the Company is a person authorised pursuant to such Regulations", the words "in accordance with provision made by or under the Financial Services and Markets Regulations 2015 if the Company is an Authorised Person" shall be substituted.
(12) In section 215(7)(a) and (c), for the words "Section 95", the words "Section 114 (Charging orders)" shall be substituted.
(13) In section 215(8)(b), for the words "Section 95", the words "Section 122 (Enforcement agents)" shall be substituted.
(14) In section 217(10)(b), for the words "Section 95", the words "Section 122 (Enforcement agents)" shall be substituted.
(15) In section 225, for the words "authorised market institution", the words "Recognised Bodies" shall be substituted.
(16) In section 232(1)(a), for the word "Civil", the words "ADGM Court" shall be substituted.
(17) In section 233(3)(a), for the word "Civil", the words "ADGM Court" shall be substituted.
(18) In section 235(9), for the word "Civil", the words "ADGM Court" shall be substituted.
(19) In section 260(2)(d), the word "and" shall be deleted.
(20) Following section 260(2)(d) a new subsection (e) shall be inserted as follows: "(e) the modifications set out in Schedule 13 (Modifications to the Insolvency Regulations for Limited Liability Partnerships); and".
(21) The current section 260(2)(e) shall be re-named as 260(2)(f).
(22) In section 263, the words "authorised market institutions" in the heading of that section shall be substituted by the words "Recognised Bodies" and wherever that section heading is referred to in the Insolvency Regulations such substitution shall also be made.
(23) In section 263(1), for the words "market institution", the words "Recognised Body" shall be substituted and the words "authorised by Financial Market Regulations" shall be omitted.
(24) In section 263(2), for the words "persons authorised pursuant to the Financial Market Regulations", the words "Authorised Persons" shall be substituted.
(25) In section 264, for the words "Financial Market Regulations", the words "Financial Services and Markets Regulations 2015" shall be substituted.
(26) In section 274(a), for the words "the Financial Market Regulations or the business rules of any market institution authorised under the Financial Market Regulations", the words "the Financial Services and Markets Regulations 2015 or the rules of any Recognised Body" shall be substituted.
(27) Chapter 2 of Part 7 shall be renamed "Netting and Collateral".
(28) In section 276(4), in each place after the words "qualified financial contracts", the words "or other contracts or transactions" shall be inserted. The words "or in connection with a netting agreement" shall be replaced by the words "pursuant to a netting agreement or to which a netting agreement shall apply".
(29) In section 276(5), after the words "qualified financial contracts", the words "or other contracts or transactions" shall be inserted.
(30) In section 277, in each place after the words "in connection with a netting agreement", the words "or a collateral arrangement" shall be inserted. The final reference to "non-insolvent party" shall be replaced by the words "other party".
(31) In section 278(1), after the words "otherwise enforceable netting agreements", the words "or collateral arrangements" shall be inserted and after the words "otherwise enforceable netting agreement", the words "or collateral arrangement " shall be inserted.
(32) In section 278(2), for the words "Chapter 2 (Netting)", the words " Chapter 2 (Netting and Collateral)" shall be substituted.
(33) In section 278(2)(a), after the words "insolvent party to a netting agreement", the words "or a collateral arrangement" shall be inserted. In each place after the words "under a netting agreement", the words "or a collateral arrangement" shall be inserted.
(34) In section 278(2)(b), after the words "netting agreement", the words "or a collateral arrangement" shall be inserted.
(35) In section 278(2)(c), after the words "shall not apply to a netting agreement", the words "or a collateral arrangement" shall be inserted and after the words "insolvent party to such netting agreement", the words "or such collateral arrangement" shall be inserted.
(36) In section 278(2)(e)(iv), after the words "100 (Charged property);", the word "and" shall be deleted.
(37) Following section 278(2)(e)(v) a new subsection (vi) shall be inserted as follows: "(vi) Section 226(1) (General rule as to priority of expenses);".
(38) Following section 278(2)(f) a new subsections (g) and (h) shall be inserted as follows:
(39)
"(g) Section 692 (Priorities where debentures secured by floating charge) of the Companies Regulations 2015 shall not apply to debentures creating a collateral arrangement by way of floating charge.
(h)
(i) Where any of the events specified in sub-paragraph (ii) occur on the day of, but after the moment of the making of a winding-up order by the Court or the appointment of an administrator, those arrangements, obligations or other events shall be legally enforceable and binding on third parties if the collateral-taker can show that he was not aware, nor should have been aware of such making of the winding-up order or the appointment of an administrator.
(ii) The events referred to in sub-paragraph (i) are —
(a) a collateral arrangement coming into existence;
(b) a relevant obligation secured by a collateral arrangement coming into existence; or
(c) the delivery, transfer, holding, registering or other designation of collateral so as to be in the possession or under the control of the collateral-taker."
(40) In section 282(5), after the words "applicable netting agreement", the words "or collateral arrangement" shall be inserted.
(41) In section 283(1), after the words "collateral arrangement", the words "which is by way of security over collateral "shall be inserted. The words "netting agreement" shall be replaced with the words "collateral arrangement". The words "and setting off" shall be replaced with the words ". The collateral-taker shall on such realisations, set".
(42) Section 285 shall be deleted and replaced in full by the following:
285. Control

A collateral taker who has taken collateral by way of security shall be treated as having control of collateral for the purposes of these Regulations notwithstanding:
(1) its exercise of a right of use as described in Section 282(1) (Right of use of collateral- taker in collateral and obligation to return equivalent assets);
(2) any right of the collateral-provider to substitute collateral of the same or greater value, withdraw excess collateral or collect the proceeds of, or otherwise service, a credit claim until further notice."
For the purposes of these Regulations "possession" of collateral in the form of cash or securities includes the case where collateral has been credited to an account in the name of the collateral-taker or a person acting on his behalf (whether or not the collateral-taker, or person acting on his behalf, has credited the collateral to an account in the name of the collateral-provider on his, or that person's, books) provided that any rights to the collateral- provider may have in relation to that collateral are limited to the right to substitute collateral of the same or greater value or to withdraw excess collateral.
(43) In section 298, the following definitions shall be inserted—

""ADGM Court Procedure Rules" means any rules, procedures, practice or guidance relating to the Court that is issued by the Chief Justice of the Court from time to time.
(44) In section 298, in the definition of "cash", after the words "money market deposit" the words "and sums due or payable to, or received between the parties in connection with the operation of a collateral arrangement or a netting agreement" shall be inserted.
(45) In section 298, the definition of "Civil Procedure Rules" shall be deleted.
(46) In section 298, the definition of "collateral" shall be deleted and replaced in full by the following words:

""collateral" means any of the following—
(a) cash in any currency;
(b) securities of any kind, including (without limitation) debt and equity securities and sukuk, units of a collective investment fund, money market instruments, claims relating to or rights in or in respect of any of the financial instruments included in this definition and any rights, privileges or benefits attached to or arising from any such financial instruments;
(c) guarantees, letters of credit and obligations to reimburse;
(d) pecuniary claims which arise out of an agreement whereby an Authorised Person grants credit in the form of a loan ("credit claims"); and
(e) any asset commonly used as collateral in the Abu Dhabi Global Market."
(47) In section 298, the definition of "collateral arrangement" shall be deleted and replaced in full by the following words:

""collateral arrangement" means any margin, collateral or security arrangement or other credit enhancement or other agreement or arrangement, evidenced in writing, the purpose of which is to secure, cover or provide credit support in respect of, the relevant obligations owed to the collateral-taker and where the collateral-provider and the collateral-taker are both non-natural persons, where—
(a) security in collateral where the collateral is delivered, transferred, held registered or otherwise designated so as to be in the possession or under the control of the collateral-taker or a person acting on its behalf is created or arises to secure the relevant obligations;
(b) there is a title transfer collateral arrangement; or
(c) there is any guarantee, letter of credit or reimbursement obligation by or to a party to one or more qualified financial contracts, in respect of one or more of those qualified financial contracts."
(48) In section 298, in the definition of "netting", after the words "qualified financial contracts" the words "or other transactions" shall be inserted.
(49) In section 298, in the definition of "netting agreement", after the words "qualified financial contracts", the words "or other contracts or transactions" shall be inserted. For the words "and (c) any", the words ", (c) any other agreement between two or more parties which incorporates netting and (d)" shall be substituted.
(50) In section 298, in the definition of "official interest rate", for the word "Civil", the words "ADGM Court" shall be substituted.
(51) In section 298, in the definition of "qualified financial contract", the word "swap" where it first appears in paragraph (a) shall be deleted. In paragraph (h), the word "option" shall be deleted. The same word shall be inserted after the words "profit rate" in paragraph (h). In paragraph (i), after the words "equity index option", the words "or total return swap" shall be inserted.
(52) In section 298, in the definition of "receiver", for the word "Civil", the words "ADGM Court" shall be substituted.
(53) In section 298, in the definition of "relevant obligations", after the words "netting agreement", the words "or collateral arrangement" shall be inserted.
(54) In section 298, in the definition of "seal" or "sealed", for the word "Civil", the words "ADGM Court" shall be substituted.
(55) In section 298, in the definition of "service", in each place where the word "Civil" appears, the words "ADGM Court" shall be substituted.
(56) In section 298, in the definition of "statement of truth", for the word "Civil", the words "ADGM Court" shall be substituted.
(57) In section 298, the definition of "title transfer collateral arrangement" shall be deleted and replaced in full by the words:

""title transfer collateral arrangement" means an agreement or arrangement, evidenced in writing, where the collateral-provider and the collateral-taker are both non-natural persons the purpose of which is to secure or otherwise cover the relevant obligations owed to the collateral-taker based on the transfer of title to collateral to a collateral-taker on terms that when the relevant obligations are discharged, the collateral-taker must transfer title to equivalent collateral to the collateral-provider, including (without limitation) a sale and repurchase agreement, securities lending agreement, securities buy/sell-back agreement or an irregular pledge."
(58) In section 298, in the definition of "witness statement", for the word "Civil", the words "ADGM Court" shall be substituted.
(59) The definition of "Financial Market Regulations" in section 298 shall be omitted.
(60) In section 298, the following definitions shall be inserted—

""Authorised Person" has the meaning given to that term in the Financial Services and Markets Regulations 2015;

"Financial Services and Markets Regulations 2015" means the Financial Services and Markets Regulations 2015, issued by the Board.

"Recognised Body" has the meaning given to that term in the Financial Services and Markets Regulations 2015."
(61) Following section 300(9), a new subsection (10) shall be inserted as follows:

"(10) In this Section, "Company" includes any body corporate (whether incorporated in the Abu Dhabi Global Market or elsewhere); and references to Directors and other officers of a Company and to voting power at any general meeting of a Company have effect with any necessary modifications."
(62) In section 301(1)(f), for the words "an investment which is an option, future or contract for difference", the words "an investment of a kind described in paragraphs 94 to 96 of Schedule 1 (Restricted Activities) of the Financial Services and Markets Regulations 2015 (options, futures and contracts for differences)" shall be substituted.
(63) The words of paragraph (a) of subsection (1) of section 302 shall be substituted by the following words—

"is within paragraphs 88 (Instruments creating or acknowledging indebtedness) or 89 (Sukuk) and does not fall within paragraph 90 (Government and public Financial Instruments) of Schedule 1 (Restricted Activities) of the Financial Services and Markets Regulations 2015 and is rated, listed or traded or designed to be rated, listed or traded"
(64) The words of paragraph (b) of subsection (1) of section 302 shall be substituted by the following words—

"is rated, listed or traded or designed to be rated, listed or traded."
(65) Subsections (2), (3) and (4) of section 302 shall be omitted.
(66) The following provisions shall be inserted in section 302—
"(2) In subsection (1)—

"rated" means rated for the purposes of investment by an internationally recognised rating agency;

"listed" means admitted to the Official List (as defined in the Financial Services and Markets Regulations 2015); and

"traded" means admitted to trading on a relevant market (as defined in paragraph 33(3) (Promotions required or permitted by the rules of certain markets) of Schedule 2 (Financial promotions) of the Financial Services and Markets Regulations 2015).
(3) An investment is also a capital market investment for the purposes of section 152 (Appointment and powers of receivers and administrative receivers) of these Regulations if it consists of a bond or commercial paper issued to a person in a territory or jurisdiction other than the Abu Dhabi Global Market who under the law of that territory or jurisdiction is not prohibited from investing in bonds or commercial paper.
(4) In subsection (3)—

"bond" shall be construed in accordance with paragraph 88 (Instruments creating or acknowledging indebtedness) of Schedule 1 of the Financial Services and Markets Regulations 2015 and includes any instrument falling within paragraph 89 (Sukuk) of that Schedule; and

"commercial paper" has the meaning given by paragraph 41(3) (Sums received in consideration for the issue of debt financial instruments) of Schedule 1 (Restricted Activities) of the Financial Services and Markets Regulations 2015."
(67) In paragraphs 3(1), 3(3) and 7 of Part 1 (Meetings and Time Limits) of Schedule 1 (Meetings, Time Limits, Notices and Documents), for the word "Civil", the words "ADGM Court" shall be substituted.
(68) In paragraphs 35, 37(1) and 37(2) of Part 8 (Delivery of Documents and Opting Out) of Schedule 1 (Meetings, Time Limits, Notices and Documents), for the word "Civil", the words "ADGM Court" shall be substituted.
(69) In paragraph 28(6) of Part 3 (Creditors' Claims) of Schedule 5 (Proofs and Distributions), for the word "Civil", the words "ADGM Court" shall be substituted.
(70) A new Schedule 13 shall be added as set out in the Schedule hereto.