Point in time view as at 31/12/2024.
There are currently no known outstanding effects for the Financial Services and Markets Act 2023, Paragraph 31.
31(1)The fourth stabilisation option is to make one or more tear-up instruments for the purpose of ensuring that the CCP has a matched book.
(2)A tear-up instrument is an instrument that makes provision terminating one or more contracts held by the CCP with clearing members.
(3)Where the Bank exercises the power under sub-paragraph (1), it must as soon as reasonably practicable determine the value of the terminated contract.
(4)On the basis of the determination under sub-paragraph (3) the Bank must as soon as reasonably practicable either—
(a)require the CCP to make a commercially reasonable payment, representing the value of the terminated contract, to the clearing member who is a party to the contract, or
(b)require the clearing member who is a party to the contract to make a commercially reasonable payment, representing the value of the terminated contract, to the CCP.
(5)The Bank must within 12 months of this paragraph coming into force publish a statement of policy as to how it determines what a commercially reasonable payment is for the purpose of complying with sub-paragraph (4).
(6)The Bank may alter or replace a statement of policy published under this paragraph.
(7)The Bank must publish a statement as altered or replaced under sub-paragraph (6).
(8)For the purposes of this paragraph, a CCP has a matched book when the sum of the financial obligations owed by the CCP to its clearing members is equal to the sum of the financial obligations owed to the CCP by its clearing members.
Commencement Information
I1Sch. 11 para. 31 not in force at Royal Assent, see s. 86(3)
I2Sch. 11 para. 31 in force at 31.12.2023 by S.I. 2023/1382, reg. 8(b)
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