New Insolvency Rules for UK E-money and Payment Institutions

The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 (SI 2021/1178) will come into force on 12 November 2021 (there is an explanatory memorandum). The new rules provide detailed operating provisions to support the special administration process for payment institutions and electronic money institutions governed by The Payment and Electronic Money Institution Insolvency Regulations 2021 (SI 2021/716) which came into effect on 8 July 2021 (there is also an explanatory memo relating to those regs).

Amongst other provisions, the new rules: 

• Require insolvency practitioners to provide a reasonable notice period before a claims bar date comes into effect. 
• Clarify the full hierarchy of expenses. 
• Require notice of a bar date to be given to all persons whom the administrator believes to have a right to assert a security interest or other entitlement over the relevant funds. 
• Require the special administrator to engage closely with payment systems operators during the special administration. 

The Government consultation response explains the evolution of this legislation.