Office of Public Sector Information
27.—(1) Subject to—
(a) section 115 of the 1986 Act (expenses of voluntary winding up) or, in Northern Ireland, article 100 of the 1989 Order (expenses of voluntary winding up); and
(b) the priority of the expenses of the winding up in a compulsory liquidation;
where an owner is wound up, the claims of relevant persons shall be paid from the relevant asset pool in priority to all other creditors.
(2) “Relevant persons” are—
(a) regulated covered bond holders;
(b) persons providing services for the benefit of those bond holders;
(c) the counter-parties to hedging instruments which are incidental to the maintenance and administration of the asset pool or to the terms of the regulated covered bond; and
(d) persons (other than the issuer) providing a loan to the owner to enable it to satisfy the claims of the persons mentioned in sub-paragraph (a), (b) or (c).
(3) The claims of the persons mentioned in paragraph (2)(b), (c) and (d) may rank equally with, but not in priority to, the claims of the persons mentioned in paragraph (2)(a).
28.—(1) Subject to regulation 29, if—
(a) any asset comprised in the asset pool is charged as security for claims in priority to any charge over that asset granted to secure the claims of relevant persons; and
(b) the charge which has priority is realised at any time when the owner is not in the course of being wound up;
the proceeds of the realisation of that charge must, after payment of the expenses referred to in regulation 29 and any other expenses relating to that charge, be first applied to satisfy the claims of relevant persons at such time as those claims fall due for payment.
(2) Subject to regulation 29, if—
(a) any asset comprised in the asset pool is charged as security for several claims;
(b) any agreement between the creditors of that charge gives priority to the claims of any person above the claims of the relevant persons; and
(c) that charge is realised at any time when the owner is not in the course of being wound up;
the proceeds of the realisation of that charge must, after payment of the expenses referred to in regulation 29 and any other expenses relating to that charge, be first applied to satisfy the claims of the relevant persons at such time as those claims fall due for payment.
29.—(1) Costs properly incurred by a liquidator, provisional liquidator, administrator, administrative receiver, receiver or manager of the owner in relation to—
(a) persons providing services for the benefit of regulated covered bond holders;
(b) the counter-parties to hedging instruments which are incidental to the maintenance and administration of the asset pool or to the terms of the regulated covered bond; or
(c) persons (other than the issuer) providing a loan to the owner to enable it to meet the claims of regulated covered bond holders or pay costs falling within sub-paragraph (a) or (b);
shall be expenses incurred in a winding up, administration, administrative receivership or receivership of the owner, as the case may be.
(2) Such expenses shall be payable out of—
(a) the proceeds of the realisation of the charge, in the case of a receivership; or
(b) the assets of the owner, in an administration, winding up or provisional liquidation,
and shall rank equally among themselves in priority to all other expenses.
30.—(1) If it appears to the Authority that a person has failed, or is likely to fail, to comply with any requirement imposed on it by or under these Regulations, the Authority may direct that person to take specified steps for the purpose of securing its compliance with any such requirement.
(2) If it appears to the Authority that an owner has failed, or is likely to fail, to comply with any requirement imposed on it by or under these Regulations, the Authority may direct the winding up of that person.
(3) A direction under this regulation is enforceable, on the application of the Authority, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988(18)(restoration of possession and specific performance).
31.—(1) The Authority may remove an issuer from the register of issuers—
(a) at the issuer’s request;
(b) with its consent; or
(c) if it appears to the Authority that the issuer is failing, or has failed, to comply with any requirement imposed on it by or under these Regulations.
(2) But these Regulations (apart from regulation 15(2)) apply to a person which has been removed from the register of issuers as if it were still a person which is admitted to the register.
32.—(1) Before—
(a) giving a direction under regulation 30; or
(b) removing an issuer from the register of issuers under regulation 31(1)(c),
the Authority must give a warning notice to the person concerned.
(2) If, having considered any representations, the Authority decides to—
(a) make the direction; or
(b) remove the issuer from the register of issuers,
the Authority must give that person a decision notice.
(3) If the Authority decides not to—
(a) make a direction; or
(b) remove the issuer from the register of issuers,
it must give that person written notice of its decision.
(4) If the Authority decides to—
(a) make a direction; or
(b) remove the issuer from the register of issuers,
the person concerned may refer the matter to the Tribunal.
33.—(1) If, on the application of the Authority, the court is satisfied that—
(a) there is a reasonable likelihood that a person will contravene a requirement imposed on it by or under these Regulations; or
(b) a person has contravened any such requirement and there is a reasonable likelihood that the contravention will continue or be repeated,
the court may make an order restraining (or in Scotland an interdict prohibiting) the contravention.
(2) If, on the application of the Authority, the court is satisfied that—
(a) a person has contravened a requirement imposed on it by or under these Regulations; and
(b) there are steps which could be taken for remedying the contravention;
the court may make an order requiring that person, and any other person who appears to have been knowingly concerned in the contravention, to take such steps as the court may direct to remedy it.
(3) The jurisdiction conferred by this regulation is exercisable by the High Court, the Court of Session and the Northern Ireland High Court.
(4) In paragraph (2), references to remedying a contravention include references to mitigating its effect.
34.—(1) The Authority may impose a penalty of such amount as it considers appropriate on a person which has contravened a requirement imposed on it by or under these Regulations.
(2) A penalty imposed under this regulation is payable to the Authority.
(3) The Authority may not take action against a person under this regulation after the end of the period of two years beginning with the first day on which it knew of the contravention unless proceedings against that person, in respect of the contravention, were begun before the end of that period.
(4) For the purposes of paragraph (3)—
(a) the Authority is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred; and
(b) proceedings against a person in respect of a contravention are to be treated as begun when a warning notice is given to it under regulation 35.
35.—(1) Where the Authority proposes to impose a penalty under regulation 34, it must give the person concerned a warning notice.
(2) The warning notice must state the amount of the proposed penalty and the Authority’s reasons for imposing it.
(3) If, having considered any representations made in response to the warning notice, the Authority decides to impose a penalty under regulation 34, it must without delay give the person concerned a decision notice.
(4) The decision notice must state the amount of the penalty.
(5) If the Authority decides to impose a penalty on a person under regulation 34, that person may refer the matter to the Tribunal.
36. Sections 210 (statements of policy) and 211 (statements of policy: procedure) of the Act are to apply in respect of the imposition of penalties under these Regulations and the amount of such penalties as they apply in respect of the imposition of penalties under Part 14 of the Act (disciplinary measures) and the amount of penalties under that Part of that Act.
37. Paragraph 16 (penalties) of Schedule 1 to the Act is to apply for the purposes of these Regulations as it applies for the purposes of the Act but with the following modifications—
(a) in sub-paragraph (1) for “this Act” substitute “the Regulated Covered Bonds Regulations 2008”;
(b) in sub-paragraph (2) for “authorised persons” substitute “issuers (within the meaning given by regulation 1(2) of the Regulated Covered Bond Regulations 2008)”;
(c) omit sub-paragraphs (3) and (13).
38.—(1) Subsections (1) and (3) of section 398 (misleading the Authority: residual cases) of the Act are to apply in respect of requirements imposed by or under these Regulations as they apply in respect of requirements imposed by or under the Act.
(2) Section 400 (offences by bodies corporate etc) and subsections (2), (3), (5) and (6) of section 401 (proceedings for offences) of the Act are to apply for the purposes of paragraph (1) as they apply for the purposes of the Act.
The Regulated Covered Bonds Regulations 2008