Financial Services and Markets Act 2000, section 367

Winding-up petitions

Part XXIV Insolvency

(1)The [F2757FCAF2757] may present a petition to the court for the winding up of a body which—

(a)is, or has been, an authorised person[F2758 or recognised investment exchangeF2758] ;

(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.

[F2759 (1A)The PRA may present a petition to the court for the winding up of a body which is a PRA-regulated person.F2759]

(2) In [F2760 subsections (1) and (1A) F2760] “body” includes any partnership.

(3)On such a petition, the court may wind up the body if—

F2761 (za). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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) [F2762or (1A)F2762] 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).

Read section 367 in the full Act → Definitions (13) Cases (4)

Definitions used in section 367

the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

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

“court” means—

(a)

the court having jurisdiction for the purposes of the 1985 Act or the 1986 Act; or

(b)

in Northern Ireland, the High Court.

Defined in s.355(1) · see it in the full Act
body

“body” means a body of persons—

(a)

over which the court has jurisdiction under any provision of, or made under, the 1986 Act (or the 1989 Order); but

(b)

which is not a building society, a friendly society or a registered society ; and

Defined in s.355(1) · see it in the full Act
authorised person

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

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

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
recognised investment exchange

“recognised CSD”, “recognised clearing house” and “recognised investment exchange” have the meaning given in section 285;

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

(a) “recognised investment exchange” means an investment exchange in relation to which a recognition order is in force;

Defined in s.285(1) · see it in the full Act
appointed representative

“appointed representative” has the meaning given in section 39(2 );

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

(2) In this Act “appointed representative” means—

(a)a person who is exempt as a result of subsection (1), or

(b)a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.

Defined in s.39(2) · see it in the full Act
regulated activity

“regulated activity” has the meaning given in section 22;

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

“general prohibition” has the meaning given in section 19(2);

Defined in s.417(1) · 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
PRA-regulated person

“PRA-regulated person” means a person who—

(a)

is or has been a PRA-authorised person,

(b)

is or has been an appointed representative whose principal (or one of whose principals) is, or was, a PRA-authorised person, or

(c)

is carrying on or has carried on a PRA-regulated activity in contravention of the general prohibition.

Defined in s.355(1) · see it in the full Act
partnership

“partnership” includes a partnership constituted under the law of a country or territory outside the United Kingdom;

Defined in s.417(1) · see it in the full Act
the 1986 Act

“the 1986 Act” means the Insolvency Act 1986 ;

Defined in s.355(1) · see it in the full Act

(8) “The 1986 Act” means the Financial Services Act 1986 .

Defined in Sch.21 para.2(8) · see it in the full Act
the 1989 Order

“the 1989 Order” means the Insolvency (Northern Ireland) Order 1989 ;

Defined in s.355(1) · see it in the full Act

Cases considering section 367 (4)

Inertia Partnership LLP, Re

[2007] EWHC 539 (Ch) · 23 February 2007Defines

Applies the statutory winding-up jurisdiction on an FSA petition where a body has carried on a regulated activity in breach of the general prohibition. The petition was determined under the insolvency and just-and-equitable grounds in subsection (3) (see paras [1]-[4]; [47]-[52]). Confirms that the FSA may petition for the winding-up of a body carrying on a regulated activity in contravention of the general prohibition. The LLP fell within the statutory description of a body (see paras [2]-[4]). Confirms that the limited liability partnership was a body for the purposes of the winding-up jurisdiction, by reference to the applicable LLP regulations (see para [3]). Applies the discretionary power to wind up the body where insolvency or the just-and-equitable ground is established. The court made the order on the just-and-equitable ground and also found insolvency (see paras [2]; [47]-[52]; [80]).

In the matter of Digital Satellite Warranty Cover Limited and another v Financial Services Authority

[2013] UKSC 7 · 13 February 2013

The provision empowered the Financial Services Authority to seek public-interest winding-up orders where a person was carrying on, or had carried on, a regulated activity in contravention of the general prohibition. (see para [1])

Beaufort Asset Clearing Services Ltd, Re

[2020] EWHC 3627 (Ch) · 16 December 2020

Confirms that the FCA has power to petition for the winding up of an authorised person, supporting the conclusion that special administration did not preclude winding up. (see para [53])

What each judgment says about section 367 is in the case-law panel in the full Act.

Explanatory note

647.This section provides that the Authority may ask the court compulsorily to wind up any company or partnership which is doing or has done financial services business or which is or has carried on financial services business without authorisation.  The powers also apply to an appointed representative.  As with the other provisions in this part which empower the Authority to initiate proceedings, this enables the Authority to act on behalf of consumers, who could in theory take action themselves, but may in practice lack the resources and expertise to do so.  The court may agree to this in cases where the business cannot pay its debts, or where it decides that it would be “just and equitable” to wind up the business.  The Authority might make an application under the latter ground if, for example, a business had been guilty of such serious rule breaches that the Authority had found it necessary to cancel its permission in order to protect the public.  This section also provides that for such businesses failure to pay money due to consumers on time can count as sufficient evidence to allow the initiation of insolvency proceedings.

All the explanatory notes for the Act

Amendments and notes

13 notes from legislation.gov.uk

Amendments

  1. F2757Word in s. 367(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 14(2)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  2. F2758Words in s. 367(1)(a) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 14(2)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  3. F2759S. 367(1A) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 14(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  4. F2760Words in s. 367(2) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 14(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  5. F2761S. 367(3)(za) repealed (14.5.2025) by Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 1 Pt. 4 (with ss. 1(4), 7(4)); S.I. 2025/572, reg. 2(c)(iii)
  6. F2762Words in s. 367(6) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 14 para. 14(5) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications

  1. C1239S. 367 applied (with modifications) (6.4.2001) by S.I. 2001/1090, regs. 1, 6
  2. C1240S. 367 applied (with modifications) (N.I.) (13.9.2004) by Limited Liability Partnerships Regulations (Northern Ireland) 2004 (S.R. 2004/307), reg. 6
  3. C1241S. 367 applied (with modifications) (1.11.2009) by The Payment Services Regulations 2009 (S.I. 2009/209), regs. 1(2)(c), 95, Sch. 5 para. 6 (with reg. 3) (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para 155(6)(f) (with Sch. 2 para. 156))
  4. C1242S. 367 applied (with modifications) (30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(b), 62, Sch. 3 para. 7 (with reg. 3) (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 196(5)(g))
  5. C1243S. 367 applied (with modifications) (13.1.2018) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(6), Sch. 6 para. 9 (with reg. 3)
  6. C1244S. 367(3)(a) modified (1.12.2001) by S.I. 2001/3650, arts. 1(a), 15
  7. C1245S. 367(5) modified (1.12.2001) by S.I. 2001/3650, arts. 1(a), 14