Banking Act 2009

255 Regulations U.K.

(1) The Treasury may make regulations about financial collateral arrangements.

(2) “Financial collateral arrangements” are arrangements under which financial collateral is used as security in respect of a loan or other liability; and for that purpose—

(a) collateral may be in cash, securities or any other form,

(b) use as security may involve transfer of the collateral or the creation or transfer of any kind of right, interest or charge (fixed or floating) in respect of it, and

(c) in particular, use as security can include use under arrangements of a kind described commercially as “title transfer financial collateral arrangements”.

(3) The regulations—

F1 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) are not restricted to [F2 doing things done F3 ... by the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226), but] may make any provision that the Treasury think necessary or desirable for the purpose of enabling financial collateral arrangements, whether or not with an international element, to be commercially useful and effective.

(4) The regulations may, in particular—

(a) disapply or modify an enactment or rule of law about formalities or evidence,

(b) disapply or modify an enactment about insolvency, administration, receivership or any similar procedure,

(c) disapply or modify an enactment about property law,

(d) disapply or modify an enactment about companies or other commercial entities or groupings,

(e) provide for provisions of financial collateral arrangements to have effect despite a reorganisation, winding-up or other process affecting a party to the arrangements,

(f) make provision for the enforcement of financial collateral arrangements (which may include, in particular, provision—

(i) about sale, appropriation and set-off,

(ii) about the use of collateral while subject to the arrangements,

(iii) about “close out netting arrangements”, under which obligations under a number of contracts may be set off against each other in the event of default under a specified contract,

(iv) permitting a person to foreclose or exercise another right under the arrangements with or without an order of a court,

(v) permitting or requiring the disclosure of information, and

(vi) for enforcement after the commencement of, and despite, reorganisation, winding-up or another process),

(g) make provision for the choice of law according to which, or under which, matters arising under financial collateral arrangements are to be determined, and

(h) apply to persons whether or not provisions of the [F4 Financial Collateral Arrangements (No. 2) Regulations 2003] apply to them.

F5 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F6 (6) Regulations under this section are to be made by statutory instrument.

(7) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(8) Section 41 of the Financial Services Act 2021 makes further provision in relation to the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226).]

Textual Amendments

F1 S. 255(3)(a) omitted (31.12.2020) by virtue of The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/341), regs. 1(3), 3(3)(a)(i) (with reg. 21) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 23(b) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2 Words in s. 255(3)(b) substituted (31.12.2020) by The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/341), regs. 1(3), 3(3)(a)(ii) (with reg. 21) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 23(b) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in s. 255(3)(b) omitted (29.4.2021) by virtue of Financial Services Act 2021 (c. 22), ss. 41(4)(a), 49(1)(c)

F4 Words in s. 255(4)(h) substituted (31.12.2020) by The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/341), regs. 1(3), 3(3)(b) (with reg. 21) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 23(b) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F5 S. 255(5) omitted (29.4.2021) by virtue of Financial Services Act 2021 (c. 22), ss. 41(4)(b), 49(1)(c)

F6 S. 255(6)-(8) inserted (29.4.2021) by Financial Services Act 2021 (c. 22), ss. 41(4)(c), 49(1)(c)

Commencement Information

I1 S. 255 in force at 25.5.2016 by S.I. 2016/598, art. 2