Companies Act 1989

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 [F2 recognised 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 [F3 appropriate regulator] that it could take action, [F4 the [F5 regulator]] may direct it to do so, and

(b) if it appears to the [F6 appropriate regulator] that it is proposing to take or may take action, [F4 the [F7 regulator]] may direct it not to do so.

(3) Before giving such a direction the [F8 appropriate regulator] shall consult the exchange or clearing house in question; and [F9 it] shall not give a direction unless [F9 it] 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 [F13 appropriate 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 [F16 regulator which gave the direction], by injunction or, in Scotland, by an order under section 45 of the M1 Court 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 [F19 recognised clearing house], means the Bank of England.]

Textual Amendments

F1 Words 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.

F2 Words in s. 166(1) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 4(11)(a) (with regs. 52-58)

F3 Words 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.

F4 Words in s. 166(2)(a)(b) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 81(2)(b)

F5 Word 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.

F6 Words 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.

F7 Word 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.

F8 Words 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.

F9 Words in s. 166(3) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 81(3)(b)

F10 Word 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.

F11 S. 166(3)(c)(d) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(4)(c), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F12 S. 166(3A)-(3C) inserted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 4(11)(b) (with regs. 52-58)

F13 Words 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.

F14 Words 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.

F15 S. 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.

F16 Words 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.

F17 Words in s. 166(8) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 4(11)(c) (with regs. 52-58)

F18 S. 166(9) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 111(8), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F19 Words in s. 166(9)(b) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 4(11)(d) (with regs. 52-58)

Modifications etc. (not altering text)

C1 S. 166 applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Miscellaneous Provisions) Order 2013 (S.I. 2013/442), arts. 1(3), 67(4)

Commencement Information

I1 S. 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

M1 1988 c. 36.