C1C2 Part VII Financial Markets and Insolvency
Pt. VII: power to apply conferred (1.12.2001) by 2000 c. 8, s. 301(1)(a); S.I. 2001/3538, art. 2(1)
Recognised investment exchanges and clearing houses
I1C3167 Application to determine whether default proceedings to be taken.
F11
This section applies where a relevant insolvency event has occurred in the case of—
a
a recognised investment exchange or a member or designated non-member of a recognised investment exchange,F14...
b
a recognised clearing house or a member of a recognised clearing houseF12, or
c
a client which is providing indirect clearing services to an indirect client.
The investment exchange, member, designated non-member F13clearing house or client in whose case a relevant insolvency event has occurred is referred to below as “the person in default”.
1A
For the purposes of this section a “relevant insolvency event” occurs where—
a
a bankruptcy order is made,
b
an award of sequestration is made,
c
an order appointing an interim receiver is made,
d
an administration or winding up order is made,
e
an administrator is appointed under paragraph 14 of Schedule B1 to the Insolvency Act 1986 (appointment by holder of qualifying floating charge) or under paragraph 22 of that Schedule (appointment by company or directors),
f
a resolution for voluntary winding up is passed, or
g
an order appointing a provisional liquidator is made.
1B
Where in relation to a person in default a recognised investment exchange or a recognised clearing house (“the responsible exchange or clearing house”)—
a
has power under its default rules to take action in consequence of the relevant insolvency event or the matters giving rise to it, but
b
has not done so,
a relevant office-holder appointed in connection with or in consequence of the relevant insolvency event may apply to the F8appropriate regulator.
2
The application shall specify F2the responsible exchange or clearing house and the grounds on which it is made.
3
On receipt of the application the F9appropriate regulator shall notify F3the responsible exchange or clearing house, and unless within three business days after the day on which the notice is received F3the responsible exchange or clearing house—
a
takes action under its default rules, or
b
notifies the F9appropriate regulator that it proposes to do so forthwith,
then, subject as follows, the provisions of sections 158 to 165 above do not apply in relation to market contracts to which F4the person in default is a party or to anything done by F3the responsible exchange or clearing house for the purposes of, or in connection with, the settlement of any such contract.
For this purpose a “business day” means any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in any part of the United Kingdom under the M1Banking and Financial Dealings Act 1971.
4
The provisions of sections 158 to 165 are not disapplied if before the end of the period mentioned in subsection (3) the F10appropriate regulator gives F5the responsible exchange or clearing house a direction under section 166(2)(a) (direction to take action under default rules).
No such direction may be given after the end of that period.
5
If F6the responsible exchange or clearing house notifies the F11appropriate regulator that it proposes to take action under its default rules forthwith, it shall do so; and that duty is enforceable, on the application of the F11appropriate regulator, by injunction or, in Scotland, by an order under section 45 of the M2Court of Session Act 1988.
F76
“The appropriate regulator”—
a
in relation to a responsible investment exchange, means the FCA, and
b
in relation to a responsible clearing house, means the Bank of England.
Pt. VII (ss. 154-191): functions of the Secretary of State transferred (7.6.1992) to the Treasury by S.I. 1992/1315, art. 2(1)(c) (with art. 6)
Pt. VII (ss. 154-191) applied (E.W.S.) (15.8.1995) by S.I. 1995/2049, reg.3; and applied (with modifications) (E.W.S.) (15.8.1995) by S.I. 1995/2049, regs.3,4,5,19, 26; and applied (with modifications) (15.7.1996) by S.I. 1996/1469, regs.3, 4, 5