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
I1159 Proceedings of exchange or clearing house take precedence over insolvency procedures.
1
None of the following shall be regarded as to any extent invalid at law on the ground of inconsistency with the law relating to the distribution of the assets of a person on bankruptcy, winding up or sequestration, or F3in the administration of a company or other body or in the administration of an insolvent estate—
a
a market contract,
b
the default rules of a recognised investment exchange or recognised clearing house,
c
the rules of a recognised investment exchange or recognised clearing house as to the settlement of market contracts not dealt with under its default rules.
2
The powers of a relevant office-holder in his capacity as such, and the powers of the court under the M1Insolvency Act 1986 or the M2Bankruptcy (Scotland) Act 1985 shall not be exercised in such a way as to prevent or interfere with—
a
the settlement in accordance with the rules of a recognised investment exchange or recognised clearing house of a market contract not dealt with under its default rules, or
b
any action taken under the default rules of such an exchange or clearing house.
This does not prevent a relevant office-holder from afterwards seeking to recover any amount under section 163(4) or 164(4) or prevent the court from afterwards making any such order or decree as is mentioned in section 165(1) or (2) (but subject to subsections (3) and (4) of that section).
3
Nothing in the following provisions of this Part shall be construed as affecting the generality of the above provisions.
4
A debt or other liability arising out of a market contract which is the subject of default proceedings may not be proved in a winding up or bankruptcy F4or in the administration of a company or other body, or in Scotland claimed in a winding up or sequestration F4or in the administration of a company or other body, until the completion of the default proceedings.
A debt or other liability which by virtue of this subsection may not be proved or claimed shall not be taken into account for the purposes of any set-off until the completion of the default proceedings.
F14A
However, prior to the completion of default proceedings—
a
where it appears to the chairman of the meeting of creditors that a sum will be certified under section 162(1) to be payable, subsection (4) shall not prevent any proof or claim including or consisting of an estimate of that sum which has been lodged or, in Scotland, submitted, from being admitted or, in Scotland, accepted, for the purpose only of determining the entitlement of a creditor to vote at a meeting of creditors; and
b
a creditor whose claim or proof has been lodged and admitted or, in Scotland, submitted and accepted, for the purpose of determining the entitlement of a creditor to vote at a meeting of creditors and which has not been subsequently wholly withdrawn, disallowed or rejected, is eligible as a creditor to be a member of a liquidation committee or, in bankruptcy proceedings in England and Wales, F5or in the administration of a company or other body a creditors’ committee.
5
For the purposes of F2subsections (4) and (4A) the default proceedings shall be taken to be completed in relation to a person when a report is made under section 162 stating the sum (if any) certified to be due to or from him.
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