Companies Act 1989

167 Application to determine whether default proceedings to be taken. U.K.

[F1 (1) 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, or

(b) a recognised clearing house or a member of a recognised clearing house.

The investment exchange, member, designated non-member or clearing house 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 Authority.]

(2) The application shall specify [F2 the responsible exchange or clearing house] and the grounds on which it is made.

(3) On receipt of the application the [F3 Authority] shall notify [F4 the responsible exchange or clearing house] , and unless within three business days after the day on which the notice is received [F4 the responsible exchange or clearing house] —

(a) takes action under its default rules, or

(b) notifies the [F3 Authority] 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 [F5 the person in default] is a party or to anything done by [F4 the 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 M1 Banking 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 [F6 Authority] gives [F7 the 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 [F8 the responsible exchange or clearing house] notifies the [F9 Authority] 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 [F9 Authority], by injunction or, in Scotland, by an order under section 45 of the M2 Court of Session Act 1988.

Textual Amendments

F1 S. 167(1)-(1B) substituted for s. 167(1)(1A) (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(a) (with reg. 1(2)(3))

F2 Words in s. 167(2) substituted (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(b) (with reg. 1(2)(3))

F3 Words in s. 167(3) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 82(3)

F4 Words in s. 167(3) substituted (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(c)(i) (with reg. 1(2)(3))

F5 Words in s. 167(3) substituted (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(c)(ii) (with reg. 1(2)(3))

F6 Words in s. 167(4) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 82(4)

F7 Words in s. 167(4) substituted (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(d) (with reg. 1(2)(3))

F8 Words in s. 167(5) substituted (15.6.2009) by The Financial Markets and Insolvency Regulations 2009 (S.I. 2009/853), regs. 1(1), 2(10)(d) (with reg. 1(2)(3))

F9 Words in s. 167(5) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 82(5)

Commencement Information

I1 S. 167 wholly in force at 1.10.1991; s. 167 in force for certain purposes at 25.4.1991 see s. 215 and S.I. 1991/878, art. 2, Sch. and wholly in force at 1.10.1991 see S.I. 1991/2173, art. 2

Marginal Citations

M1 1971 c. 80.

M2 1988 c. 36.