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)
F9Recognised bodies
S. 155 cross-heading substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 3(2) (with regs. 7(4), 9(1))
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,F8...
F10ba
a recognised CSD or a member of a recognised CSD, or
c
a client which is providing indirect clearing services to an indirect client.
F11The person referred to in paragraphs (a) to (c) 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 F12a recognised body (“F13the responsible recognised body”)—
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 F3appropriate regulator.
2
The application shall specify F14the responsible recognised body and the grounds on which it is made.
3
On receipt of the application the F4appropriate regulator shall notify F15the responsible recognised body, and unless within three business days after the day on which the notice is received F15the responsible recognised body —
a
takes action under its default rules, or
b
notifies the F4appropriate 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 F2the person in default is a party or to anything done by F15the responsible recognised body 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 F5appropriate regulator gives F16the responsible recognised body 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 F17the responsible recognised body notifies the F6appropriate 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 F6appropriate regulator, by injunction or, in Scotland, by an order under section 45 of the M2Court of Session Act 1988.
F186
“The appropriate regulator”—
a
in relation to a recognised investment exchange, means the FCA, and
b
in relation to a recognised clearing house or recognised CSD, 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