The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020
| Jurisdiction | UK Non-devolved |
| Citation | SI 2020/744 |
| Year | 2020 |
2020 No. 744
Co-operative Societies
Community Benefit Societies
Credit Unions
The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020
Made 16th July 2020
Laid before Parliament 17th July 2020
Coming into force 18th July 2020
The Treasury make the following Order in exercise of the powers conferred on them by sections 118 and 147 of the Co-operative and Community Benefit Societies Act 20141(“the 2014 Act”) and section 47 of, and paragraph 92 of Schedule 4 to, the Corporate Insolvency and Governance Act 20202(“the 2020 Act”) and the Secretary of State makes the following Order in exercise of the power conferred under section 49(2) of the 2020 Act.
The Secretary of State concurs in relation to the making of this Order under sections 118 and 147 of the 2014 Act and paragraph 92 of Schedule 4 to the 2020 Act.
PART 1
Citation, commencement and interpretation
Citation, commencement and interpretation
1. This Order may be cited as the Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020, and comes into force on 18th July 2020.
2. In this Order “the 2014 Order” means the Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 20143.
PART 2
Commencement of provision of the Corporate Insolvency and Governance Act 2020
Commencement of paragraph 51 of Schedule 3 to the Corporate Insolvency and Governance Act 2020
3. Paragraph 51 of Schedule 3 to the Corporate Insolvency and Governance Act 2020 comes into force on 18th July 2020.
PART 3
Amendment of the Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014
Amendment of the 2014 Order by revocation of provision in the Corporate Insolvency and Governance Act 2020
4. In the Corporate Insolvency and Governance Act 2020, in Schedule 3 paragraph 54 is revoked.
Amendment of the 2014 Order
5. The 2014 Order is amended in accordance with the following articles.
Amendment of Article 1
6. In Article 1(2), at the appropriate place insert—
““relevant CCBS” means a co-operative society or community benefit society, that is registered under the 2014 Act but not a society that is—
(a) registered as a social landlord under Part 1 of the Housing Act 1996 or Part 2 of the Housing (Scotland) Act 2010; or
(b) a credit union within the meaning of section 31(1) of the Credit Unions Act 1979.”.
Amendment of Article 2
7. In Article 2—
(a) in the title—
(i) after “relevant societies” insert “and relevant CCBS”;
(ii) for “and administration” substitute “, administration and moratoriums”;
(b) at the beginning insert—
“A1. Part A1 of the 1986 Act (moratorium) applies in relation to relevant CCBS with the modifications set out in paragraph 1(2) of Part 1, and Part 1A, of Schedule 1”;
(c) after paragraph (3) insert—
“4. Part 26A of the 2006 Act (arrangements and reconstructions: companies in financial difficulty) applies in relation to a relevant society with the modifications set out in Schedule 2A.
5. Schedule 4 to the Corporate Insolvency and Governance Act 2020 (moratoriums in Great Britain: temporary provision) applies in relation to relevant CCBS with the modification set out in Part 4 of Schedule 4.”.
Amendment of Article 4
8. In Article 4, before “Part 1 or Part 2” insert “Part A1,”.
New Article 5A
9. After Article 5 insert—
“Application of sections 355A and 355B of FSMA
1. Sections 355A (powers of FCA and PRA to participate in proceedings) and 355B (enforcement of requirements imposed by section 355A) of FSMA apply in relation to a relevant society which meets the criteria in section 355A(1).
2. For that purpose, in sections 355A and 355B a reference to a company is a reference to a relevant society of a kind specified in paragraph (1).”.
Amendment of Article 11
10. In Article 11, after paragraph (5) insert—
“6. Part 3 of Schedule 4 (moratoriums in Great Britain: temporary provision) to the Corporate Insolvency and Governance Act 2020 apply where—
(a) it is intended to make, and there is made, a proposal to a relevant CCBS and its creditors for a moratorium under Part A1 of the 1986 Act (as applied in relation to a relevant CCBS); and
(b) either—
the courts in England and Wales have jurisdiction to wind up the society; or
a sheriff court in Scotland has jurisdiction to wind up the society.”
Amendment of Schedule 1
11. In Schedule 1—
(a) paragraph 1 becomes paragraph 1—(1);
(b) after subparagraph (1) of paragraph (1) insert—
“2. Unless the context otherwise requires and subject to any further modification in this Schedule, in Part A1 of the 1986 Act, subparagraph (1) of this paragraph applies as if “relevant CCBS” was substituted for “relevant society” in each place it appears.”;
(c) after paragraph 1 insert—
“PART 1A
Modified application of Part A1 of the Insolvency Act 1986 to Co-operative and Community Benefit Societies (further modifications)
Part A1 of the 1986 Act (moratorium) applies in relation to a relevant CCBS with the further modifications set out in this Part and with any other necessary modification.
Section A5 (obtaining a moratorium for other overseas companies) is omitted.
Section A20 (restrictions on insolvency proceedings etc) has effect as if after subsection (3) there were inserted—
“4. In subsection (1)(h) “administrative receiver” in relation to a relevant CCBS means—
(a) a receiver or manager of the whole “or substantially the whole” of the society’s property appointed by or on behalf of the holder of a floating charge, or
(b) a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the society’s property.”.
Section A28 (restrictions on payment of certain pre-moratorium debts) has effect as if after subsection (1) there were inserted—
“1A. During a moratorium, withdrawal of shares from the relevant CCBS is prohibited.”
Section A35 (monitoring) has effect as if after subsection (2) there were inserted—
“3. In carrying out its functions under this chapter the monitor must have regard to the rules of the relevant CCBS and the obligations of the relevant CCBS under the Co-operative and Community Benefit Societies Act 2014.”.
Section A48 of the 1986 Act (prosecution of delinquent officers of company) has effect as if—
(a) in subsection (3), in the definition of “the appropriate authority”—
at the end of paragraph (a) there were added “or the Financial Conduct Authority (“the FCA”)”;
at the end of each of paragraph (b) and paragraph (c)(i), (ii) and (iv) there were added “or the FCA”; and
in paragraph (c)(iii), after “Lord Advocate” there were inserted “or the FCA”;
(b) for subsection (4) there were substituted—
“(4) Subsection (4A) applies where a report is made to the Secretary of State or the FCA under subsection (2) in relation to a relevant CCBS whose registered office is situated in England and Wales.
(4A) The Secretary of State or the FCA may, for the purpose of investigating the matter reported and such other matters relating to the CCBS affairs as appear to require investigation, exercise the power to appoint inspectors which would be exercisable by the FCA under section 106 of the Co-operative and Community Benefit Societies Act 2014 upon an application made for that purpose under subsection (1) of that section.”;
(c) subsections (5) to (8) were omitted; and
(d) in subsection (10), for the definition of “prosecuting authority” there were substituted—
““prosecuting authority” means—
(a) in the case of a relevant CCBS whose registered office is situated in England and Wales, the Director of Public Prosecutions, the Secretary of State or the FCA; and
(b) in the case of a relevant society whose registered office is situated in Scotland, the Lord Advocate.”.
Chapter 8 of Part A1 of the 1986 Act (miscellaneous and general) has effect as if before section A49 there were inserted—
“This Part has effect as if it required any proposal under it to be framed so as to enable a relevant CCBS to comply with the rules of the society and the provisions of the 2014 Act.”.
Section A50 (power to modify this Part etc in relation to certain companies) is omitted.
Section A54 has effect as if—
(a) in subsection (1), after the definition of “qualified person” there were inserted—
““CCBS” means a co-operative society or community benefit society that is registered under the 2014 Act but not a society that is—
(a) a private registered provider of social housing;
(b) registered as a social landlord under Part 1 of the...
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