PART 3Modification of insolvency law
Modification of the F2Insolvency (England and Wales) Rules 2016 and the Insolvency Rules (Northern Ireland) 199114
Where the collateral-provider or the collateral-taker under a financial collateral arrangement goes into liquidation or administration and the arrangement or a close out netting provision provides for, or the mechanism provided under the arrangement permits, either—
a
the debt owed by the party in liquidation or administration under the arrangement, to be assessed or paid in a currency other than sterling; or
b
the debt to be converted into sterling at a rate other than the official exchange rate prevailing on the date when that party went into liquidation or administration;
then F1rule 14.21 of the Insolvency (England and Wales) Rules 2016 (debts in foreign currency), or rule 4.097 of the Insolvency Rules (Northern Ireland) 1991 M1 (liquidation, debt in foreign currency), as appropriate, shall not apply unless the arrangement provides for an unreasonable exchange rate or the collateral-taker uses the mechanism provided under the arrangement to impose an unreasonable exchange rate in which case the appropriate rule shall apply.