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Companies Act 1989

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Changes over time for: Section 166

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Version Superseded: 26/08/2013

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166 Powers F1... to give directions.U.K.

(1)The powers conferred by this section are exercisable in relation to a recognised UK investment exchange or [F2recognised clearing house].

(2)Where in any case an exchange or clearing house has not taken action under its default rules—

(a)if it appears to the [F3appropriate regulator] that it could take action, [F4the [F5regulator]] may direct it to do so, and

(b)if it appears to the [F6appropriate regulator] that it is proposing to take or may take action, [F4the [F7regulator]] may direct it not to do so.

(3)Before giving such a direction the [F8appropriate regulator] shall consult the exchange or clearing house in question; and [F9it] shall not give a direction unless [F9it] is satisfied, in the light of that consultation—

(a)in the case of a direction to take action, that failure to take action would involve undue risk to investors or other participants in the market, F10...

(b)in the case of a direction not to take action, that the taking of action would be premature or otherwise undesirable in the interests of investors or other participants in the market,

[F11(c)in either case, that the direction is necessary having regard to the public interest in the stability of the financial system of the United Kingdom, or

(d)in either case, that the direction is necessary—

(i)to facilitate a proposed or possible use of a power under Part 1 of the Banking Act 2009 (special resolution regime), or

(ii)in connection with a particular exercise of a power under that Part.]

[F12(3A)The appropriate regulator may give a direction to a relevant office-holder appointed in respect of a defaulting clearing member to take any action, or refrain from taking any action, if the direction is given for the purposes of facilitating—

(a)the transfer of a clearing member client contract, a client trade or a qualifying collateral arrangement, or

(b)a qualifying property transfer.

(3B)The relevant office-holder to whom a direction is given under subsection (3A)—

(a)must comply with the direction notwithstanding any duty on the relevant office-holder under any enactment relating to insolvency, but

(b)is not required to comply with the direction given if the value of the clearing member’s estate is unlikely to be sufficient to meet the office-holder’s reasonable expenses of complying.

(3C)The expenses of the relevant office-holder in complying with a direction of the regulator under subsection (3A) are recoverable as part of the expenses incurred in the discharge of the office-holder’s duties.]

(4)A direction shall specify the grounds on which it is given.

(5)A direction not to take action may be expressed to have effect until the giving of a further direction (which may be a direction to take action or simply revoking the earlier direction).

(6)No direction shall be given not to take action if, in relation to the person in question—

(a)a bankruptcy order or an award of sequestration of his estate has been made, or an interim receiver or interim trustee has been appointed, or

(b)a winding up order has been made, a resolution for voluntary winding up has been passed or an administrator, administrative receiver or provisional liquidator has been appointed;

and any previous direction not to take action shall cease to have effect on the making or passing of any such order, award or appointment.

(7)Where an exchange or clearing house has taken or been directed to take action under its default rules, the [F13appropriate regulator] may direct it to do or not to do such things (being things which it has power to do under its default rules) as are specified in the direction.

F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F15(7A)Where the exchange or clearing house is acting in accordance with a direction under subsection (2)(a) that was given only by virtue of paragraph (a) of subsection (3), the appropriate regulator shall not give a direction under subsection (7) unless it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the default proceedings.

(7B)Where the exchange or clearing house has taken action under its default rules without being directed to do so, the appropriate regulator shall not give a direction under subsection (7) unless—

(a)it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the default proceedings, or

(b)it is satisfied that the direction is necessary—

(i)having regard to the public interest in the stability of the financial system of the United Kingdom,

(ii)to facilitate a proposed or possible use of a power under Part 1 of the Banking Act 2009 (special resolution regime), or

(iii)in connection with a particular exercise of a power under that Part.]

(8)A direction under this section is enforceable, on the application of the [F16regulator which gave the direction], by injunction or, in Scotland, by an order under section 45 of the M1Court of Session Act 1988; and where an exchange[F17, a clearing house or a relevant office-holder] has not complied with a direction, the court may make such order as it thinks fit for restoring the position to what it would have been if the direction had been complied with.

[F18(9)“The appropriate regulator”—

(a)in relation to a recognised UK investment exchange, means the FCA, and

(b)in relation to a [F19recognised clearing house], means the Bank of England.]

Textual Amendments

F1Words in s. 166 heading omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 111(9), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F3Words in s. 166(2)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(2)(a), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F4Words in s. 166(2)(a)(b) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 81(2)(b)

F5Word in s. 166(2)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(2)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F6Words in s. 166(2)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(3)(a), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F7Word in s. 166(2)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(3)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F8Words in s. 166(3) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(4)(a), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F9Words in s. 166(3) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 81(3)(b)

F10Word in s. 166(3) omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 111(4)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F13Words in s. 166(7) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(5)(a), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F14Words in s. 166(7) omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 111(5)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F15S. 166(7A)(7B) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(6), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F16Words in s. 166(8) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(7), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

Commencement Information

I1S. 166 wholly in force at 1.10.1991; s. 166 in force for certain purposes at 25.4.1991 see s. 215 and S.I. 1991/878, art. 2, Sch. (subject to savings in art. 3(2)) and wholly in force at 1.10.1991 see S.I. 1991/2173, art. 2.

Marginal Citations

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