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Financial Services and Markets Act 2023

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Changes over time for: Paragraph 78

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Point in time view as at 31/12/2024.

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There are currently no known outstanding effects for the Financial Services and Markets Act 2023, Paragraph 78. Help about Changes to Legislation

Regulations for safeguarding certain financial arrangements: write-down instrumentsU.K.

This section has no associated Explanatory Notes

78(1)In this paragraph “protected arrangements” means security interests, title transfer collateral arrangements, set-off arrangements and netting arrangements.

(2)In sub-paragraph (1)

(a)security interests” means arrangements under which one person acquires, by way of security, an actual or contingent interest in the property of another,

(b)“title transfer collateral arrangements” are arrangements under which Person 1 transfers assets to Person 2 on terms providing for Person 2 to transfer assets if specified obligations are discharged,

(c)“set-off arrangements” are arrangements under which two or more debts, claims or obligations can be set off against each other, and

(d)“netting arrangements” are arrangements under which a number of claims or obligations can be converted into a net claim or obligation and include, in particular, “close-out” netting arrangements, under which actual or theoretical debts are calculated during the course of a contract for the purpose of enabling them to be set off against each other or to be converted into a net debt.

(3)The Treasury may by regulations —

(a)restrict the making of a write-down instrument in cases that involve, or where they might affect, protected arrangements;

(b)impose conditions on the making of write-down instruments in cases that involve, or where they might affect, protected arrangements;

(c)require write-down instruments to include specified provision, or provision to a specified effect, in respect of or for purposes connected with protected arrangements;

(d)provide for a write-down instrument to be void or voidable, or for other consequences to arise, if or in so far as the write-down instrument is made or purported to be made in contravention of a provision of the regulations;

(e)specify principles to which the Bank is to be required to have regard in making a write-down instrument—

(i)that involves protected arrangements, or

(ii)where the making of the instrument might affect protected arrangements.

(4)Regulations under this paragraph may apply to protected arrangements generally or only to arrangements—

(a)of a specified kind, or

(b)made or applying in specified circumstances.

(5)Regulations under this paragraph may include provision for determining which arrangements are to be, or not to be, treated as protected arrangements; in particular, regulations may provide for arrangements to be classified not according to their description by the parties but according to one or more indications of how they are treated, or are intended to be treated, in commercial practice.

(6)In this paragraph “arrangements” includes arrangements which—

(a)are formed wholly or partly by one or more contracts or trusts;

(b)arise under or are wholly or partly governed by the law of a country or territory outside the United Kingdom;

(c)wholly or partly arise automatically as a matter of law;

(d)involve any number of parties;

(e)operate partly by reference to other arrangements between other parties.

(7)Regulations under this paragraph are subject to the affirmative procedure.

Commencement Information

I1Sch. 11 para. 78 not in force at Royal Assent, see s. 86(3)

I2Sch. 11 para. 78 in force at 29.8.2023 by S.I. 2023/779, reg. 4(ddd)(x)

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