The Financial Markets and Insolvency Regulations 1996

Ability of administrator or receiver to recover assets in case of property subject to system-charge

8.—(1) This regulation applies where an administration order is made or an administrator or an administrative receiver or a receiver is appointed, in relation to a system-member, former system-member or system-beneficiary.

(2) The disapplication, by section 175(1)(b) and (3) of the Act, of sections 15(1) and (2), 43 and 61 of the Insolvency Act 1986 shall cease to have effect after the end of the relevant day in respect of any property which is subject to a system-charge granted by the system-member, former system-member or system-beneficiary if on the basis of a valuation in accordance with paragraph (3), the charge is not required for the realisation of the sum specified in paragraph (4) or (5).

(3) For the purposes of paragraph (2), the value of property shall, except in a case falling within paragraph (6), be such as may be agreed between the administrator, administrative receiver or receiver on the one hand and the settlement bank on the other.

(4) Where the system-charge has been granted by a system-member or former system-mem ber, the sum referred to in paragraph (2) is whichever is the lesser of—

(a) the sum referred to in regulation 6(3);

(b) the sum referred to in regulation 6(4) due to the settlement bank at the close of business on the relevant day.

(5) Where the system-charge has been granted by a system-beneficiary, the sum referred to in paragraph (2) is whichever is the lesser of—

(a) the sum referred to in regulation 7(3);

(b) the sum referred to in regulation 7(4) due to the settlement bank at the close of business on the relevant day.

(6) For the purposes of paragraph (2), the value of any property for which a price for the relevant day is quoted in the Daily Official List of The London Stock Exchange Limited shall—

(a) in a case in which two prices are so quoted, be an amount equal to the average of those two prices, adjusted where appropriate to take account of any accrued dividend or interest; and

(b) in a case in which one price is so quoted, be an amount equal to that price, adjusted where appropriate to take account of any accrued dividend or interest.

(7) In this regulation “the relevant day” means the second business day after the day on which the administration order is made, or the administrative receiver or receiver is appointed.