Certain insolvency legislation on avoidance of contracts and floating charges not to apply to financial collateral arrangementsU.K.
10.—(1) In relation to winding-up proceedings of a collateral-taker or collateral-provider, section 127 of the Insolvency Act 1986 (avoidance of property dispositions, etc) shall not apply (if it would otherwise do so)—
(a)to any property or security interest subject to a disposition or created or otherwise arising under a financial collateral arrangement; or
(b)to prevent a close-out netting provision taking effect in accordance with its terms.
(2) Section 88 of the Insolvency Act 1986 (avoidance of share transfers, etc after winding-up resolution) shall not apply (if it would otherwise do so) to any transfer of shares under a financial collateral arrangement.
[F1(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) 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.]
(3) Section 176A of the Insolvency Act 1986 M1 (share of assets for unsecured creditors) shall not apply (if it would otherwise do so) to any charge created or otherwise arising under a financial collateral arrangement.
(4) Section 178 of the Insolvency Act 1986 (power to disclaim onerous property) or, in Scotland, any rule of law having the same effect as that section, shall not apply where the collateral-provider or collateral-taker under the arrangement is [F2subject to winding-up proceedings], to any financial collateral arrangement.
(5) Section 245 of the Insolvency Act 1986 (avoidance of certain floating charges) shall not apply (if it would otherwise do so) to any charge created or otherwise arising under a security financial collateral arrangement.
(6) [F3Section 754 of the Companies Act 2006 (priorities where debentures secured by floating charge)] [F4(including that section as applied or modified by any enactment made under the Banking Act 2009)] shall not apply (if it would otherwise do so) to any charge created or otherwise arising under a financial collateral arrangement.
Textual Amendments
F1Reg. 10(2A)(2B) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 4(8)(a) (with reg. 3)
F2Words in reg. 10(4) substituted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 4(8)(b) (with reg. 3)
F3Words in reg. 10(6) substituted (1.10.2009) by The Financial Collateral Arrangements (No. 2) Regulations 2003 (Amendment) Regulations 2009 (S.I. 2009/2462), regs. 1(2), 2(6)
F4Words in reg. 10(6) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 4(8)(c) (with reg. 3)
Marginal Citations
M1Section 176A of the Insolvency Act 1986 was inserted by section 252 of the Enterprise Act 2002.