GEN 12 GEN 12 Business Transfer Schemes
GEN 12 Guidance1. Part 9 of the Regulatory Law ("Part 9") sets out provisions relating to financial services business transfer schemes ("transfer schemes"). Article 106 provides that no transfer scheme is to have effect unless a
Courtorder has been made in relation to the scheme. Article 108 provides that the Courtmay make an order sanctioning a transfer scheme.2. The DFSAmay under Article 113 of the Regulatory Law make Rules providing for provisions of Part 9 to have effect in specified cases with modifications. This chapter sets out such Rules.3. The intended effect of the Rules in this chapter when read with Part 9 is that:(a) a Banking transfer scheme and an Insurancetransfer scheme (as defined in this chapter) must continue to comply with all relevant requirements in Part 9 and such a scheme does not take effect unless a Courtorder has been made in relation to it under Article 108; and4. The Rules in this chapter do not prevent an Authorised Firmor transferee applying for a Courtorder sanctioning a transfer scheme under Part 9 if they consider it appropriate to do so, for example, if the scheme is complex, is likely to be contentious or if additional legal certainty is sought.
GEN 12.1 GEN 12.1 Modifications applying to transfer schemes
The Rules in this chapter are prescribed under Article 113 of the Regulatory Law and Part 9 of that Law is to be read as if it was modified, in relation to the cases set out in Rule 12.1.4, as specified in this chapter.
In this chapter:(a) "Banking transfer scheme" means a transfer scheme where the whole or part of the business to be transferred relates to the
Authorised Firm'sbusiness of Accepting Deposits;(b) "Court order" means a Courtorder under Article 108 of the Law;(c) "Fund transfer scheme" means a transfer scheme relating to the Fund Propertyof a Domestic Fundor of a sub-fund of an Umbrella Fundthat is a Domestic Fund;(d) "Insurance transfer scheme" means a transfer scheme where the whole or part of the business to be transferred relates to the Authorised Firm's Insurance Business;(e) "the Law" means the Regulatory Law; and(f) "transfer scheme" has the meaning given in Article 106 of the Law.
The Rules in this chapter do not modify the provisions of Part 9 of the Law so far as they apply to any of the following:(a) a Banking transfer scheme;(b) an Insurance transfer scheme; or(c) a Fund transfer scheme.
A transfer scheme, other than a scheme referred to in Rule 12.1.3, is not required to be sanctioned by a
Courtorder to be effective if:(a) all of the Clientsof the Authorised Firmwho will be affected by the transfer scheme have consented to it;(b) the transfer scheme is expressly permitted under agreements between the Authorised Firmor transferee and the Clientsof the Authorised Firmwho will be affected by the scheme and any procedures in the agreements for giving effect to the scheme have been complied with; or(c) the DFSAhas consented in writing to the transfer scheme under Rule 12.1.5.
GEN 12.1.5 GEN 12.1.5(1) An
Authorised Firmor transferee may apply in writing to the DFSAseeking its consent to a transfer scheme.(2) The DFSAmay consent in writing to the transfer scheme if it is reasonably satisfied that:(a) the scheme is not a transfer scheme referred to in Rule 12.1.3;(b) it is more appropriate and proportionate, and in the overall interests of Clientsaffected by the scheme, for the Authorised Firmor transferee to seek the DFSA'sconsent rather than applying to the Courtfor an order sanctioning the scheme;(c) the Authorised Firmor transferee has taken all reasonable steps to pursue other options for giving effect to the scheme;(d) the scheme is not likely to result in any material prejudice to the interests of Clientsof the Authorised Firm; and(e) implementation of the scheme will not result in the Authorised Firmor transferee contravening any applicable law or Rule.(3) The procedures in Schedule 3 to the Law apply to a decision of the DFSAunder (2) to refuse to give its consent to a transfer scheme.(4) If the DFSAdecides to refuse to give its consent under this Rule, the Authorised Firmmay refer the matter to the FMTfor review.
GEN 12.1.5 Guidance1. The
DFSAexpects to receive applications seeking its consent to a transfer scheme only in limited circumstances, and if the scheme is not complex or contentious. If a scheme is likely to be contentious or complex, then it is more appropriate for an application to be made to the Court.2. The DFSAwill not give its consent unless the applicant can demonstrate that it has taken all reasonable steps to pursue other options for implementing the scheme, such as seeking the consent of affected Clientsor using existing agreements with Clients.3. The DFSAalso will not give its consent in cases such as where:(a) the transfer scheme is likely to materially prejudice the interests of Clients;(b) due to the complexity of the transfer scheme it is unclear what the precise impact of the scheme will be on Clientsor whether it will be legally effective; or(c) implementation of the transfer scheme will result in the Authorised Firmor transferee breaching a requirement in a law or Rule, for example, if the transferee does not have the necessary authorisation to conduct that business or if the transfer will result in the Authorised Firmor transferee breaching a prudential requirement.4. The type of case where the DFSAanticipates giving its consent to a transfer scheme is where the scheme is relatively simple and the applicant has taken all reasonable steps to pursue other options but has been unable to complete the necessary processes because, for example, a small number of Clientsdo not respond.