Financial Services (Temporary Administration Of Companies) Act 2010

Link to law: http://www.gibraltarlaws.gov.gi/articles/2010-02o.pdf
Published: 2010-03-18

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I ASSENT Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02

FINANCIAL SERVICES (TEMPORARY
ADMINISTRATION OF COMPANIES) ACT 2010

Principal Act

Act. No. 2010-02 Commencement 18.3.2010
Assent 18.3.2010




Amending
enactments
Relevant current
provisions
Commencement
date

Act. 2014-14 ss. 2, 4, 5, 6, 7, 8, 9, 10, 11, 12,
12(1)(c),13
1.11.2014


English sources:
None cited

EU Legislation/International Agreements involved:

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
ARRANGEMENT OF SECTIONS

Section
1. Title and commencement.
2. Interpretation.
3. Application.
4. Appointment of Special Administrator.
5. Special Administrator to control the Company’s Relevant Affairs.
6. Functions of the Special Administrator.
7. Powers of the Special Administrator.
8. Liability of Directors Officers and Managers.
9. Special Administrators and others not deemed to be in breach of the
Principal Act.
10. Immunity.
11. Funding.
12. Termination of Appointment.
13. Offences and Penalties.
14. Revocation and Savings.

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
AN ACT TO MAKE PROVISION FOR AND IN CONNECTION WITH
THE APPOINTMENT OF AN AUTHORISED ADMINISTRATOR TO
CONTROL THE AFFAIRS OF A COMPANY UPON THE HAPPENING
OF A RELEVANT EVENT; TO PROVIDE FOR THE FUNCTIONS AND
POWERS OF THE AUTHORISED ADMINISTRATOR; AND FOR
CONNECTED PURPOSES.

Title and commencement.

1. This Act may be cited as the Financial Services (Temporary
Administration of Companies) Act 2010 and comes into operation on the
day of publication.

Interpretation.

2.(1) In this Act, unless the context otherwise requires,

“Associated Company” means any company or other legal entity which is
wholly or partially owned or controlled by a Company or by any of
the shareholders of or persons that ultimately own or control or
appear to the Minister or the Authority to own or control the
Company or its Relevant Affairs, or any company whose affairs are
or appear to be controlled or directed by, or to the order of, the
Company or its directors or shadow directors;

“Special Administrator” means a person appointed under section 4;

“Authority” means the Chief Executive appointed under the Financial
Services Commission Act 2007;

“Client” means any person, company, trust or other legal entity to which
the Company, or any of its employees or Associated Companies,
provides services for which a licence is required under the Principal
Act or any other statute;

“Client Service” means the doing of any act or thing or the holding of any
post or office, or the discharge of any function or power, in, in
relation to, or for the benefit of any Client, for which a licence is
required under the Principal Act or any other statute;

“Company” means a person, company or other entity whose licence
under the Principal Act has been suspended or cancelled under
section 11 of that Act, whether or not an appeal has been lodged
under section 45 of that Act or any other legal challenge has been
brought against the decision to suspend or revoke the licence;

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
“fit and proper person” means a person who in the Authority’s opinion
has the knowledge and expertise to carry out the functions of the
Special Administrator;

“Minister” means the Minister with responsibility for financial services;

“Principal Act” means the Financial Services (Investment and Fiduciary
Services) Act;

“Relevant Affairs” means all the business and affairs of a Company
comprising or relating to Client Services;

“Relevant Event” means the suspension or cancellation by the Authority
of a licence pursuant to section 11 of the Principal Act, the
imposition of conditions on a licence by the Authority pursuant to
section 10 of the Principal Act, or any other statutory provision
whether or not an appeal has been lodged under section 45 of the
Principal Act or any other legal challenge has been brought against
the decision to suspend or cancel the licence;

“Relevant Period” means any period of time during which this Act
applies in accordance with section 3; and

“a suspended or cancelled licence” means a licence issued by the
Authority under the Principal Act, or any other statute and which
has been suspended or cancelled under section 11 of the Principal
Act, whether or not an appeal has been lodged under section 45 of
the Principal Act or any other legal challenge has been brought
against the decision to suspend or cancel the licence.

Application.

3. This Act shall apply upon the happening of a Relevant Event and or
during any period of time that a Relevant Event subsists.

Appointment of Special Administrator.

4. Upon the happening of a Relevant Event in relation to a Company, and
for the duration of a Relevant Period the Authority may, and upon the
Direction of the Minister shall, appoint a fit and proper person to be the
Special Administrator of the Relevant Affairs of that Company.

Special Administrator to control the Company’s Relevant Affairs.

5. While the appointment of a Special Administrator under this Act remains
effective

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
(a) no director, officer or other employee of the Company shall
take any action or do anything in relation to its Relevant Affairs
or the affairs of any Client of the Company or in connection
with any Client Service without the consent of the Special
Administrator;

(b) every director, officer and other employee of the Company or
Associated Company shall do all such acts and things in
relation to its Relevant Affairs as may be directed by the
Special Administrator.

Functions of the Special Administrator.

6. The functions of the Special Administrator shall be

(a) to enquire into and safeguard the Relevant Affairs of the
Company and of its Clients;

(b) to obtain custody of and safeguard the records and assets of the
Company and of its Clients;

(c) to communicate with Clients of the Company for the purposes
of

(i) informing them of the circumstances and facts affecting
the Company, its Clients, that Client and Client Services;

(ii) obtaining and receiving instructions from Clients relating
to their affairs;

(d) to assist the Commission, any law enforcement authority or any
other person exercising statutory authority in the execution of
their duties and functions, including any enquiry or
investigation.

Powers of the Special Administrator.

7.(1) The Special Administrator shall have the following powers

(a) to take all actions and do all things necessary or desirable for
the conduct of the Relevant Affairs of the Company;

(b) to take all actions and do all things necessary to carry out and
implement the instructions of any Client, including but not
limited to instructions to transfer the business and affairs of a
Client to any other company or other entity duly licensed under
the Principal Act;
Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02

(c) to take all actions and do all things (including but not limited to
the exercise of the functions and duties of directors, officers,
trustees or other office) in relation to the affairs of any Client of
the Company or of any Associated Company or their Client
Services, which functions or duties were performed by the
Company or any director or employee thereof or any
Associated Company pursuant to a suspended or cancelled
licence;

(d) to sign all documents, papers, authorities, directions,
instructions, mandates, cheques and where necessary, affix the
common seal of the Company or of any Associated Company
or other thing whatsoever necessary, or in the Special
Administrator’s opinion desirable, to give effect to any of his
functions or powers, including (but not limited to) conducting
Client Services and implement Client instructions;

(e) to take all actions and do all things necessary to carry out the
functions described in section 6(d) above, including (but
without prejudice to the generality of the foregoing) delivering
any equipment, records, papers, documents and information of
any kind, or copies thereof, appertaining to a Company or any
Client.

(2) Any power conferred on a Company or an Associated Company or its
officers, whether by the Companies Act or by the memorandum and articles
of association of the Company or the Associated Company, which could be
exercised in such a way as to interfere with the exercise by the Special
Administrator of his powers hereunder, is not exercisable except with such
consent of the Authority.

Liability of Directors Officers and Managers.

8. Without prejudice to section 13 any director, officer or manager of a
Company or of an Associated Company that fails or omits to do any act or
thing directed by the Special Administrator or does any act or thing without
the consent of the Special Administrator contrary to section 5, shall be
personally liable to the Company and to the Client for all the financial
consequences of his said acts or omissions.

Special Administrators and others not deemed to be in breach of the
Principal Act.

9.(1) None of the persons specified in sub-section (2) below shall be
deemed to be in breach of the Principal Act, in the circumstances also
specified in sub-section (2) below by virtue only of the fact that the licence
Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
of the Company or an Associated Company under the Principal Act has been
suspended or cancelled.

(2) The persons and circumstances referred to in sub-section (1) above are
the following

(a) the Special Administrator, in the lawful discharge of his
powers and functions under this Act;

(b) any employee or agent of the Special Administrator duly
authorised by the Special Administrator in the lawful discharge
of his powers and functions under this Act;

(c) any director, officer, manager or employee of the Company or
Associated Company acting at the specific request or
instruction or with the specific written authority of the Special
Administrator.

Immunity.

10.(1) Neither the Special Administrator nor his officers, staff or agents,
shall be liable in damages for anything done or omitted in the discharge or
purported discharge of any powers or functions conferred on the Special
Administrator by this Act or any other statute unless the act or omission is
shown to have been in bad faith.

(2) The Commission shall (unless bad faith is definitively found to have
existed) indemnify the Special Administrator, his officers, staff and agents
for the costs of defending any action brought by a third party in respect of
anything they are alleged to have done or omitted in the discharge or
purported discharge of any powers or functions conferred on the Special
Administrator by this Act.

(3) For all the purposes of the Principal Act, the Special Administrator and
his officers, staff and agents shall be deemed to be officers, staff and agents
of the Commission.

Funding.

11.(1) All the fees and costs of the Special Administrator in the carrying out
of his powers and functions under this Act shall be defrayed out of the
monies and assets of the Company.

(2) If the Company shall not have sufficient monies for the purposes
described at sub-section (1) above, the said fees and costs shall be borne by
the Authority.

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
(3) The Authority may, with the consent of the Minister, levy a special fee
upon all the holders of licences under the Principal Act, on such terms as to
division between them as it shall consider equitable, to recover any costs
incurred by it under this Act.

(4) The raising of a levy under sub-section (3) above shall not prejudice
the existence of a debt by the Company to the Authority for all such fees and
costs, which shall rank in priority upon a winding up to any debt due by the
Company to any director or shareholder of the Company or to any
Associated Company or director or shareholder thereof.

Termination of Appointment.

12.(1) Subject to sub-section (2) the appointment of a Special
Administrator under this Act shall terminate upon the happening of one of
the following events, namely

(a) the Minister revokes the appointment;

(b) the Authority revokes the appointment;

(c) the Supreme Court of Gibraltar appoints a liquidator of the
Company pursuant to a petition to wind up the Company.

(2) The Authority shall not, without the Minister’s consent, revoke any
appointment which it made at the direction of the Minister.

Offences and Penalties.

13.(1) Any person who interferes with or obstructs an Special
Administrator in the exercise of his functions or powers under this Act shall
commit an offence.

(2) Any person who is a director, officer, manager or employee of a
Company who fails to carry out the directions of the Special Administrator
under section 5(b) at the time and within the timescale directed by the
Special Administrator, or who takes any action or does anything in relation
to the Relevant Affairs of a Company or the affairs of any Client of the
Company or any Client Service without the consent or authority of the
Special Administrator contrary to section 5(a) shall commit an offence.

(3) Any person guilty of an offence under this Act shall be liable

(a) on summary conviction to imprisonment for a term not
exceeding three months or to a fine not exceeding level five on
the standard scale or to both; or

Financial Services (Temporary Administration of Companies)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)
2010-02
(b) on conviction on indictment to imprisonment for a term not
exceeding seven years or to a fine or to both.

Revocation and Savings.

14.(1) The Financial Services (Investment and Fiduciary Services)
(Temporary Administration of Companies) Regulations 2010 are hereby
revoked.

(2) Notwithstanding the revocation of the Financial Services (Investment
and Fiduciary Services) (Temporary Administration of Companies)
Regulations 2010, any appointment made under those Regulations prior to
the coming into force of this Act shall be deemed to have been duly made
under this Act.