The Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Partial Property Transfers and Safeguarding of Protected Arrangements) Regulations 2023

CHAPTER 2 Remedies

Market contracts and continuity powers

9.—(1) This regulation applies where a partial property transfer has been made in contravention of regulation 5 (financial markets) or any other provision of this Part which relates to the exercise of the continuity powers.

(2) The partial property transfer is void so far as it was made in contravention of those provisions of this Part.

Set-off and netting

10.—(1) This regulation applies where a partial property transfer has been made in contravention of regulation 3 (protected rights and liabilities) unless the contravention relates to the exercise of the continuity powers (in which case, regulation 9 (market contracts and continuity powers) applies).

(2) The partial property transfer does not affect the exercise of the right to set-off or net.

Contravention of other provisions of this Part

11.—(1) Subject to paragraph (2), this regulation applies where any person (“ P”) considers that a partial property transfer has been made in contravention of any provision of this Part, and that, as a result, the property, rights or liabilities of P have been affected.

(2) This regulation does not apply to the extent that regulation 9 (market contracts and continuity powers) or 10 (set-off and netting) applies.

(3) P may give notice to the Bank of the alleged contravention of this Part.

(4) The notice under paragraph (3) must—

(a) be given within 60 days of the day on which the partial property transfer took effect;

(b) be in writing;

(c) specify the provision of this Part which is alleged to have been contravened and the manner in which that contravention has occurred;

(d) identify the property, rights or liabilities to which the alleged contravention relates.

(5) P must also, on request, provide such additional information as the Bank may reasonably require.

(6) Subject to paragraph (8), within 60 days of receipt of a notice under paragraph (3), the Bank must—

(a) if it agrees that a provision of this Part has been contravened in the manner specified in the notice given under paragraph (3), take the steps specified in paragraph (7);

(b) if it does not agree that a provision of this Part has been contravened in the manner specified in the notice given under paragraph (3), take the steps specified in paragraph (8).

(7) The steps are to remedy the contravention by transferring property, rights or liabilities to the transferee or the transferor under the partial property transfer.

(8) The steps are to give reasons to P as to why it considers that no provision of this Part has been contravened in the manner specified in the notice given under paragraph (3).

(9) If the Bank considers that the matters raised in the notice given under paragraph (3) are of such complexity that it is impractical to take a decision under paragraph (6) within 60 days of receipt of the notice, the Bank may extend the period of 60 days by no more than 60 days; in such cases it must, within 60 days of receipt of the notice given under paragraph (3), inform P of the extension and the duration of the extension.

(10) The property, rights or liabilities which are transferred under paragraph (7) may be the same property, rights or liabilities which were, in contravention of this Part, transferred or not transferred (as the case may be) or, if the transfer of such property, rights or liabilities is not practicable, property, rights or liabilities which, in the opinion of the Bank, are equivalent to those property, rights or liabilities.