COMP 6.3 When is a relevant person in default?
A relevant person is in default if:
- (1)
(except in relation to an ICD claim6) the FSCS has determined it to be in default under COMP 6.3.2 R, COMP 6.3.3 R or6 COMP 6.3.4 R6; or
- (2)
(in relation to an ICD claim6):
- (a)
the FCA6 has determined it to be in default under COMP 6.3.2 R; or
- (b)
a judicial authority has made a ruling that had the effect of suspending the ability of eligible claimants to bring claims against the participant firm, if that is earlier than (a); and5
5
if a relevant person is in default in relation to an ICD claim6 it shall be deemed to be in default in relation to any other type of protected claim.5
- (a)
[Note: article 2(2)6 of the Investor Compensation Directive6]
The6 FSCS (or, where COMP 6.3.1 R(2)(a) applies, the FCA6) may determine a relevant person to be in default when it is, in the opinion of the FSCS (7or the FCA6)7:
- (1)
unable to satisfy protected claims against it; or
- (2)
likely to be unable to satisfy protected claims against it.
The6 FSCS may determine a relevant person to be in default if it is satisfied that a protected claim exists (other than an ICD claim6), and the relevant person is the subject of one or more of the following proceedings in the United Kingdom (or of equivalent or similar proceedings in another jurisdiction):
- (1)
the passing of a resolution for a creditors' voluntary winding up;
- (2)
a determination by the FCA or the PRA8 that the relevant person appears unable to meet claims against it and has no early prospect of being able to do so;
- (3)
the appointment of a liquidator or administrator, or provisional liquidator or interim manager;
- (4)
the making of an order by a court of competent jurisdiction for the winding up of a company, the dissolution of a partnership, the administration of a company or partnership, or the bankruptcy of an individual;
- (5)
the approval of a company voluntary arrangement, a partnership voluntary arrangement, or of an individual voluntary arrangement;9
- (6)
9a moratorium under Part A1 of the Insolvency Act 1986 being in force.
The6 FSCS may6 determine6 a relevant person to be6 in default if it is satisfied that a protected claim exists (other than an ICD claim)6, and:
331- (1)
the FSCS is satisfied that the relevant person cannot be contacted at its last place of business and that reasonable steps have been taken to establish a forwarding or current address, but without success; and
- (2)
there appears to the FSCS to be no evidence that the relevant person will be able to meet claims made against it.
9For the avoidance of doubt, COMP 6.3.3R and COMP 6.3.4R do not limit COMP 6.3.2R.
Claims arising under COMP 3.2.4 R2
2For the purposes of COMP 6.3 a claim made by a firm under COMP 3.2.4 R is to be treated as if it were a protected claim against the relevant person.
Scheme manager's power to require information
4For the purposes of sections 219(1A)(b) and (d) of the Act (Scheme manager's power to require information) whether a relevant person is unable or likely to be unable to satisfy claims shall be determined by reference to whether it is in default.