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)

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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.