Financial Services and Markets Act 2000, section 107

Application for order sanctioning transfer scheme

Part VII Control of Business Transfers

(1)An application may be made to the court for an order sanctioning an insurance business transfer scheme [F870, a banking business transfer scheme [F871 , a reclaim fund business transfer scheme or a ring-fencing transfer schemeF871,F870]] .

(2)An application may be made by—

(a)[F847 the transferor concernedF847] ;

(b)the transferee; or

(c)both.

[F872 (2A)An application relating to a ring-fencing transfer scheme may be made only with the consent of the PRA.

(2B)In deciding whether to give consent, the PRA must have regard to the scheme report prepared under section 109A in relation to the ring-fencing transfer scheme.F872]

(3)The application must be made—

(a)if [F847the transferor concernedF847] and the transferee are registered or have their head offices in the same jurisdiction, to the court in that jurisdiction;

(b)if [F847the transferor concernedF847] and the transferee are registered or have their head offices in different jurisdictions, to the court in either jurisdiction;

(c)if the transferee is not registered in the United Kingdom and does not have his head office there, to the court which has jurisdiction in relation to [F847the transferor concernedF847] .

(4) “Court” means—

(a)the High Court; or

(b)in Scotland, the Court of Session.

Read section 107 in the full Act → Definitions (2) Cases (21)

Definitions used in section 107

the transferor concerned

(2) In this Part, “the transferor concerned”—

(a)in the case of an insurance business transfer scheme, is to be read in accordance with section 105(2);

(b)in the case of a banking business transfer scheme, is to be read in accordance with section 106(2);

(c)in the case of a reclaim fund business transfer scheme, means the reclaim fund to whose business the scheme relates.

(d)in the case of a ring-fencing transfer scheme, means the body to whose business the scheme relates.

Defined in s.103A(2) · see it in the full Act
the PRA

“the PRA” means the Prudential Regulation Authority;

Defined in s.417(1) · see it in the full Act

Cases considering section 107 (21)

Phoenix Life Assurance Limited & Ors, Re

[2023] EWHC 2612 (Ch) · 19 October 2023

Applied the jurisdictional provisions to conclude that the application for sanction was properly before the High Court in England and Wales. (see para [6])

In the matter of USAA Limited

[2022] EWHC 3161 (Ch) · 21 November 2022

Applies the provision governing when an application for sanction may be made. The court considered the application properly constituted under the statutory scheme. (see para [15]) Applies the provision permitting an application to be made by either or both the transferor and transferee. The joint application by the relevant companies was procedurally valid. (see para [15]) Applies the jurisdictional provision permitting the application to be made in England. The transferor’s registered office in England made the application properly made to this court. (see para [15])

In the Matter of Phoenix Life Limited

[2022] EWHC 2669 (Ch) · 24 October 2022

Applies the statutory jurisdiction for sanctioning the insurance business transfer scheme and makes the sanction order sought by the applicants. (see paras [1]; [24]; [64])

1 more judgment, and what each says about section 107, are in the case-law panel in the full Act.

Explanatory note

202.This section enables either a transferee, or the transferor, or both, to apply to the court for an order sanctioning a transfer of an insurance or banking business.  Subsection (3) makes provision as to the court to which an application may be made. The appropriate court will depend on the country or territory in which the businesses are registered or have their head office.

208.This section sets out the conditions that must be met before the court may sanction a business transfer scheme.  The conditions are that the transferee firm has obtained any necessary certificates, which are set out in Schedule 12, and also that court is satisfied that the firm will have the necessary authorisation to carry on that business after the transfer (unless no authorisation is required, as may be the case for some reinsurance undertakings in other territories).

209.The precise requirements imposed under the Schedule will depend on a number of factors including whether the business in question is insurance or banking business, and the location of the business (that is whether it is domiciled in the United Kingdom, another EEA member State or overseas).

210.An insurance business will require:

  • a certificate about confirming that it has the necessary margin of solvency (paragraph 2 of the Schedule); and

  • a certificate indicating that a host State regulator - in cases involving risks or firms located in another EEA member State - has consented (or failed to object within 3 months) to the transfer (paragraphs 3 to 5).

211.In the case of a bank it will need to produce:

  • a certificate confirming that the bank has adequate resources; and

  • in the case where either the transferor or transferee company is domiciled in another EEA state, a certificate confirming that the home state regulator has been informed about the transfer.

212.In deciding whether to sanction the scheme, the court must consider whether it is appropriate, in all the circumstances, to do so.

All the explanatory notes for the Act

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F870Words in s. 107(1) substituted (12.3.2009) by Dormant Bank and Building Society Accounts Act 2008 (c. 31), ss. 15, 31(1)(2), Sch. 2 para. 3; S.I. 2009/490, art. 2 (with art. 3)
  2. F871Words in s. 107(1) substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 6(2); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
  3. F847Words in Pt. 7 substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 2; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
  4. F872S. 107(2A)(2B) inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 6(3); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

Modifications

  1. C322S. 107 applied (1.12.2001) by S.I. 2001/3626, arts. 1, 3(a)