Search Legislation

The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010

What Version

 Help about what version
  • Latest available (Revised)
  • Original (As made)

Opening Options

 Help about opening options

Status:

This is the original version (as it was originally made). This item of legislation is currently only available in its original format.

Amendment of the Financial Collateral Arrangements (No. 2) Regulations 2003

This sectionnoteType=Explanatory Memorandum has no associated

4.  (1)  The Financial Collateral Arrangements (No. 2) Regulations 2003(1) are amended as follows.

(2) In regulation 3—

(a)renumber the existing provision as paragraph (1);

(b)in paragraph (1)—

(i)insert in the appropriate place—

“credit claims” means pecuniary claims which arise out of an agreement whereby a credit institution, as defined in Article 4(1) of Directive 2006/48/EC of the European Parliament and of the Council relating to the taking up and pursuit of the business of credit institutions (recast), including the institutions listed in Article 2 of that Directive, grants credit in the form of a loan(2);;

(ii)in the definition of “financial collateral”, for “cash or financial instruments” substitute “cash, financial instruments or credit claims”;

(iii)in the definition of “reorganisation measures”, in sub-paragraphs (c) and (d), after “Scottish partnership,” on each occasion it occurs, insert “a protected trust deed within the meaning of”;

(iv)in the definitions of “security financial collateral arrangement” and “security interest”—

(aa)for “equivalent financial collateral” substitute “financial collateral of the same or greater value”,

(bb)after “excess financial collateral” insert “or to collect the proceeds of credit claims until further notice”;

(v)for the definition of “winding up proceedings” substitute—

“winding-up proceedings” means—

(a)

winding up by the court or voluntary winding up within the meaning of the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989;

(b)

sequestration of a Scottish partnership under the Bankruptcy (Scotland) Act 1985(3);

(c)

bank insolvency within the meaning of the Banking Act 2009.;

(c)after paragraph (1), insert—

(2) For the purposes of these Regulations “possession” of financial collateral in the form of cash or financial instruments includes the case where financial collateral has been credited to an account in the name of the collateral-taker or a person acting on his behalf (whether or not the collateral-taker, or person acting on his behalf, has credited the financial collateral to an account in the name of the collateral-provider on his, or that person’s, books) provided that any rights the collateral-provider may have in relation to that financial collateral are limited to the right to substitute financial collateral of the same or greater value or to withdraw excess financial collateral..

(3) In regulation 4—

(a)in paragraph (4), insert at the end “or, in Scotland, to relation to any charge created or arising under a financial collateral arrangement”;

(b)in paragraph (5), omit “security” both times it occurs.

(4) In regulation 5, omit “security” both times it occurs.

(5) In regulation 6A(4), insert at the end, “or, in Scotland, to any charge created or arising under a financial collateral arrangement.”

(6) In regulation 8—

(a)in paragraph (1)(a), omit “and”;

(b)after paragraph (1)(a), insert—

(aa)paragraph 65(2) (distribution);;

(c)at the end of paragraph (1)(b), insert “and”;

(d)after paragraph (1)(b), insert—

(c)paragraph 99(3) and (4) (administrator’s remuneration, expenses and liabilities).

(e)in paragraph (3)—

(i)at the end of sub-paragraph (b), insert “and”;

(ii)after sub-paragraph (b), insert—

(c)section 19(4) and 19(5) (administrator’s remuneration, expenses and liabilities).

(7) In regulation 9—

(a)at the end of paragraph (1)(a), omit “and”;

(b)after paragraph (1)(b), insert—

(c)Article 31(4) and (5) (administrator’s remuneration, expenses and liabilities); and

(d)Paragraphs 44(2), 45 (restriction on enforcement of security), 66(2) (distribution), 71, 72 (power of administrator to deal with charged property), 100(3) and (4) (administrator’s remuneration, expenses and liabilities) of Schedule B1 to the Order(5)..

(8) In regulation 10—

(a)after paragraph (2), insert—

(2A) Sections 40 (or in Scotland, sections 59, 60(1)(e)) and 175 of the Insolvency Act 1986 (preferential debts) shall not apply to any debt which is secured by a charge created or otherwise arising under a financial collateral arrangement.

(2B) Section 176ZA of the Insolvency Act 1986 (expenses of winding up)(6) shall not apply in relation to any claim to any property which is subject to a disposition or created or otherwise arising under a financial collateral arrangement.;

(b)in paragraph (4), for “being wound up” substitute “subject to winding-up proceedings”; and

(c)in paragraph (6) after “floating charge)”, insert “(including that section as applied or modified by any enactment made under the Banking Act 2009)”.

(9) In regulation 11—

(a)after paragraph (1), insert—

(1A) Article 50 of that Order (payment of debts out of assets subject to floating charge) shall not apply (if it would otherwise do so), to any charge created or otherwise arising under a financial collateral arrangement.;

(b)after paragraph (2), insert—

(2A) Articles 149 of that Order (preferential debts) and 150ZA (expenses of winding up)(7) shall not apply (if they would otherwise do so) to any charge created or otherwise arising under a financial collateral arrangement..

(10) In regulation 12—

(a)in paragraph (2)(b), after “winding-up of” insert “or, in Scotland, a petition for winding-up proceedings in relation to”;

(b)in paragraph (3)—

(i)in paragraph (a), after “winding-up order” insert “or, in the case of a Scottish partnership, the award of sequestration”, and

(ii)in paragraph (b) after “otherwise”, insert “or, in the case of a Scottish partnership, when a protected trust deed is entered into”;

(c)in paragraph (4) after “set-off)” insert “, or in Scotland, any rule of law with the same or similar effect to the effect of these Rules”.

(11) In regulation 13(3)—

(a)in paragraph (a) after “winding-up order” insert “or, in the case of a Scottish partnership, the award of sequestration”; and

(b)in paragraph (b) after “otherwise” insert “or, in the case of a Scottish partnership, the date of registration of a protected trust deed”.

(12) In regulation 15—

(a)after “goes into liquidation” insert “or administration”;

(b)for “section 49(3) of the Bankruptcy (Scotland) Act 1985 as applied by rule 4.16(1)(c) of those rules (claims in foreign currency)” substitute “the provisions of the Bankruptcy (Scotland) Act 1985 referred to in those rules and such rules and provisions as applied by rule 2.41 of the Insolvency (Scotland) Rules 1986”.

(13) After regulation 15, insert—

Insolvency proceedings in other jurisdictions

15A.  (1)  The references to insolvency law in section 426 of the Insolvency Act 1986 (co-operation between courts exercising jurisdiction in relation to insolvency) include, in relation to a part of the United Kingdom, this Part of these Regulations and, in relation to a relevant country or territory within the meaning of that section, so much of the law of that country or territory as corresponds to this Part.

(2) A court shall not, in pursuance of that section or any other enactment or rule of law, recognise or give effect to—

(a)any order of a court exercising jurisdiction in relation to insolvency law in a country or territory outside the United Kingdom, or

(b)any act of a person appointed in such a country or territory to discharge any functions under insolvency law,

in so far as the making of the order or the doing of the act would be prohibited by this Part in the case of a court in England and Wales or Scotland, the High Court in Northern Ireland or a relevant office holder.

(3) Paragraph (2) does not affect the recognition of a judgment required to be recognised or enforced under or by virtue of the Civil Jurisdiction and Judgments Act 1982(8) or Council Regulation (EC) No 44/2001 of 22nd December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(9), as amended from time to time and as applied by the Agreement made on 19th October 2005 between the European Community and the Kingdom of Denmark on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(10)..

(14) In regulation 16—

(a)after paragraph (3), insert—

(3A) In Scotland, paragraphs (1) and (3) apply to title transfer financial collateral arrangements as they apply to security financial collateral arrangements.;

(b)at the end insert—

(5) This regulation does not apply in relation to credit claims..

(15) For regulation 17, substitute—

Appropriation of financial collateral under a security financial collateral arrangement

17.  (1)  Where a security interest is created or arises under a security financial collateral arrangement on terms that include a power for the collateral-taker to appropriate the financial collateral, the collateral-taker may exercise that power in accordance with the terms of the security financial collateral arrangement, without any order for foreclosure from the courts (and whether or not the remedy of foreclosure would be available).

(2) Upon the exercise by the collateral-taker of the power to appropriate the financial collateral, the equity of redemption of the collateral-provider shall be extinguished and all legal and beneficial interest of the collateral-provider in the financial collateral shall vest in the collateral taker..

(1)

S.I. 2003/3226. These Regulations have been amended by S.I. 2009/2462.

(2)

OJ No L 177, 30.6.2006, p1 – 200.

(4)

Regulation 6A was inserted by S.I. 2009/2462.

(5)

Schedule B1 was inserted by S.I. 2005/1455 (N.I. 10).

(6)

Section 176ZA was inserted by the Companies Act 2006 (c.46), section 1282.

(7)

Article 150ZA was inserted by the Companies Act 2006, section 1282.

(9)

OJ L 12, 16.1.2001, p1-23.

(10)

OJ L 299 16.11.2005, p62.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made):The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Memorandum

Explanatory Memorandum sets out a brief statement of the purpose of a Statutory Instrument and provides information about its policy objective and policy implications. They aim to make the Statutory Instrument accessible to readers who are not legally qualified accompany any Statutory Instrument or Draft Statutory Instrument laid before Parliament from June 2004 onwards.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enactedversion that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Impact Assessments

Impact Assessments generally accompany all UK Government interventions of a regulatory nature that affect the private sector, civil society organisations and public services. They apply regardless of whether the regulation originates from a domestic or international source and can accompany primary (Acts etc) and secondary legislation (SIs). An Impact Assessment allows those with an interest in the policy area to understand:

  • Why the government is proposing to intervene;
  • The main options the government is considering, and which one is preferred;
  • How and to what extent new policies may impact on them; and,
  • The estimated costs and benefits of proposed measures.
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as made version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources