7. In this Part of these Regulations, unless the context otherwiserequires—
“the Bank” means the Bank of England;
“business day” has the same meaning as in section 167(3) of the Act;
“CGO” means the Central Gilts Office of the Bank;
“CGO Service” means the computer-based system established by the Bank and TheStock Exchange to facilitate the transfer of specified securities;
“CGO Service charge” means a charge of the kind described in section 173(1)(c) of theAct;
“CGO Service member” means a person who is entitled by contract with the Bank to use theCGO Service;
“former CGO Service member” means a person whose entitlement by contract with the Bank to usethe CGO Service has been terminated or suspended;
“market charge” means a charge which is a market charge for the purposes of PartVII of the Act;
“settlement bank” means a person who has agreed under a contract with the Bank tomake payments of the kind mentioned in section 173(1)(c) of the Act;
“specified securities” has the meaning given in section 173(3) of the Act;
“Talisman” means The Stock Exchange settlement system known as Talisman;
“Talisman charge” means a charge granted in favour of The Stock Exchange overproperty credited to an account within Talisman maintained in the nameof the chargor in respect of certain property beneficially owned by thechargor; and
“transfer” when used in relation to specified securities has the meaning givenin section 173(3) of the Act.
Commencement Information
I1Reg. 7 in force at 25.4.1991, see reg. 1
8.—(1) No charge, whether fixed or floating, shall be treated as a marketcharge to the extent that it is a charge on land or any interest inland.
(2) For the purposes of paragraph (1), a charge on a debenture formingpart of an issue or series shall not be treated as a charge on land orany interest in land by reason of the fact that the debenture is securedby a charge on land or any interest in land.
Commencement Information
I2Reg. 8 in force at 25.4.1991, see reg. 1
9. Section 173 of the Act (market charges) shall be amended—
(a)by inserting the following paragraph after section173(1)(a)—
“(aa)in favour of The Stock Exchange, for the purpose of securing debtsor liabilities arising in connection with short term certificates;”;
(b)by inserting, in section 173(1)(c), the words“or allotment” after the word“transfer” and the words“or allottee” after the word“transferee”;
(c)by inserting“(aa),” after the words“subsection (1)(a)” in section 173(2); and
(d)by substituting the following for the first line of section 173(3)—
“In subsection (1)—
“short term certificate” means an instrument issued by The Stock Exchange undertaking toprocure the transfer of property of a value and description specified inthe instrument to or to the order of the person to whom the instrumentis issued or his endorsee or to a person acting on behalf of either ofthem and also undertaking to make appropriate payments in cash, in theevent that the obligation to procure the transfer of property cannot bedischarged in whole or in part;”
Commencement Information
I3Reg. 9 in force at 25.4.1991, see reg. 1
10.—(1) A charge granted in favour of a recognised investment exchange otherthan The Stock Exchange shall be treated as a market charge only to theextent that—
(a)it is a charge over property provided as margin in respect of marketcontracts entered into by the exchange for the purposes of or inconnection with the provision of clearing services;
(b)in the case of a recognised UK investment exchange, it secures theobligation to pay to the exchange the net sum referred to in paragraph9(2)(a) of Schedule 21 of the Act as it applies by virtue of paragraph1(4) of that Schedule; and
(c)in the case of a recognised overseas investment exchange, it securesthe obligation to reimburse the cost (other than fees and otherincidental expenses) incurred by the exchange in settling unsettledmarket contracts in respect of which the charged property is provided asmargin.
(2) A charge granted in favour of The Stock Exchange shall be treated asa market charge only to the extent that—
(a)it is a charge of the kind described in paragraph (1); or
(b)it is a Talisman charge and secures an obligation of either or bothof the kinds mentioned in paragraph (3).
(3) The obligations mentioned in this paragraph are—
(a)the obligation of the chargor to reimburse The Stock Exchange forpayments (including stamp duty and taxes but excluding Stock Exchangefees and incidental expenses arising from the operation by The StockExchange of settlement arrangements) made by The Stock Exchange insettling, through Talisman, market contracts entered into by thechargor; and
(b)the obligation of the chargor to reimburse The Stock Exchange theamount of any payment it has made pursuant to a short term certificate.
(4) In paragraph (3),“short term certificate” means an instrument issued by The Stock Exchange undertaking toprocure the transfer of property of a value and description specified inthe instrument to or to the order of the person to whom the instrumentis issued or his endorsee or to a person acting on behalf of either ofthem and also undertaking to make appropriate payments in cash, in theevent that the obligation to procure the transfer of property cannot bedischarged in whole or in part.
Commencement Information
I4Reg. 10 in force at 25.4.1991, see reg. 1
11. A charge granted in favour of a recognised clearing house shall betreated as a market charge only to the extent that—
(a)it is a charge over property provided as margin in respect of marketcontracts entered into by the clearing house;
(b)in the case of a recognised UK clearing house, it secures theobligation to pay to the clearing house the net sum referred to inparagraph 9(2)(a) of Schedule 21 to the Act; and
(c)in the case of a recognised overseas clearing house, it secures theobligation to reimburse the cost (other than fees or other incidentalexpenses) incurred by the clearing house in settling unsettled marketcontracts in respect of which the charged property is provided asmargin.
Commencement Information
I5Reg. 11 in force at 25.4.1991, see reg. 1
12. A CGO Service charge shall be treated as a market charge onlyif—
(a)it is granted to a settlement bank by a person for the purpose ofsecuring debts or liabilities of the kind mentioned in section 173(1)(c)of the Act incurred by that person through his use of the CGO Service asa CGO Service member; and
(b)it contains provisions which refer expressly to the CGO.
Commencement Information
I6Reg. 12 in force at 25.4.1991, see reg. 1
13. A CGO Service charge shall be treated as a market charge only to theextent that—
(a)it is a charge over any one or more of the following—
(i)specified securities held within the CGO Service to the account of aCGO Service member or a former CGO Service member;
(ii)specified securities which were held as mentioned in sub-paragraph(i) above immediately prior to their being removed from the CGO Serviceconsequent upon the person in question becoming a former CGO Servicemember;
(iii)sums receivable by a CGO Service member or former CGO Service memberrepresenting interest accrued on specified securities held within theCGO Service to his account or which were so held immediately prior totheir being removed from the CGO Service consequent upon his becoming aformer CGO Service member;
(iv)sums receivable by a CGO Service member or former CGO Service memberin respect of the redemption or conversion of specified securities whichwere held within the CGO Service to his account at the time that therelevant securities were redeemed or converted or which were so heldimmediately prior to their being removed from the CGO Service consequentupon his becoming a former CGO Service member; and
(v)sums receivable by a CGO Service member or former CGO Service memberin respect of the transfer by him of specified securities through themedium of the CGO Service; and
(b)it secures the obligation of a CGO Service member or former CGOService member to reimburse a settlement bank for the amount due fromhim to the settlement bank as a result of the settlement bank havingdischarged or become obliged to discharge payment obligations in respectof transfers or allotments of specified securities made to him throughthe medium of the CGO Service.
Commencement Information
I7Reg. 13 in force at 25.4.1991, see reg. 1
14.—(1) In this regulation“qualifying period” means the period beginning with the fifth business day before theday on which a petition for the making of an administration order inrelation to the relevant CGO Service member or former CGO Service memberis presented and ending with the second business day after the day onwhich an administration order is made in relation to the relevant CGOService member or former CGO service member pursuant to the petition.
(2) The disapplication of sections 10(1)(b) and 11(3)(c) of theInsolvency Act 1986(1) by section 175(1)(a) of the Act shall be limited inrespect of a CGO Service charge so that it has effect only to the extentnecessary to enable there to be realised, whether through the sale ofspecified securities or otherwise, a sum equal to whichever is less ofthe following—
(a)the total amount of payment obligations discharged by the settlementbank in respect of transfers and allotments of specified securities madeduring the qualifying period to the relevant CGO Service member orformer CGO Service member through the medium of the CGO Service less thetotal amount of payment obligations discharged to the settlement bank inrespect of transfers of specified securities made during the qualifyingperiod by the relevant CGO Service member or former CGO Service memberthrough the medium of the CGO Service; and
(b)the amount (if any) described in regulation 13(b) due to thesettlement bank from the relevant CGO Service member or former CGOService member.
Commencement Information
I8Reg. 14 in force at 25.4.1991, see reg. 1
15.—(1) The disapplication of sections 15(1) and (2), 43 and 61 of theInsolvency Act 1986 by section 175(1)(b) and 175(3) of the Act shallcease to have effect in respect of a charge which is either a CGOService charge or a Talisman charge after the end of the second businessday after the day on which an administration order is made or, as thecase may be, an administrative receiver or a receiver is appointed, inrelation to the grantor of the charge, in relation to property subjectto it which—
(a)in the case of a CGO Service charge, is not, on the basis of avaluation in accordance with paragraph (2), required for the realisationof whichever is the less of the sum referred to in regulation 14(2)(a)and the amount referred to in regulation 14(2)(b) due to the settlementbank at the close of business on the second business day referred toabove; and
(b)in the case of a Talisman charge is not, on the basis of a valuationin accordance with paragraph (2), required to enable The Stock Exchangeto reimburse itself for any payment it has made of the kind referred toin regulation 10(3).
(2) For the purposes of paragraph (1) the value of property shall,except in a case falling within paragraph (3), be such as may be agreedbetween whichever is relevant of the administrator, administrativereceiver or receiver on the one hand and the settlement bank or TheStock Exchange on the other.
(3) For the purposes of paragraph (1), the value of any investment forwhich a price for the second business day referred to above is quoted inthe Daily Official List of The Stock Exchange shall—
(a)in a case in which two prices are so quoted, be an amount equal tothe average of those two prices, adjusted where appropriate to takeaccount of any accrued interest; and
(b)in a case in which one price is so quoted, be an amount equal tothat price, adjusted where appropriate to take account of any accruedinterest.
Commencement Information
I9Reg. 15 in force at 25.4.1991, see reg. 1