The Joint special administrators of an investment banking entity succeed in obtaining a direction to allow them to distribute client assets quickly.
A feature of the special administration procedure is that one of the objectives of the special administrator is to ensure the return of client assets as soon as reasonably practicable (IBSAR Regulation 10). IBSAR Regulation 11 relates to this objective and provides the special administrator may set a bar date for the submissions of certain claims. However by regulation 11(8) this provision does not apply to client assets which are governed by rules made by the FCA under s137B FSMA. Thus regulation 11 does not apply to client money because client money is covered by the CASS rules. The administrators requested directions to allow them to fill this lacuna in IBSAR.
The Court held that it had jurisdiction to give the direction sought by the joint administrators as it would assist them in achieving one of the objectives of IBSAR – namely the speedy return of client assets.
The direction allowed the administrators to set a bar date for client asset claims, recover their expenses in dealing with those claims and to make a distribution. All of this the Court allowed and stated for good measure that the administrators would not incur personal liability as trustees in relation to the relevant client assets.