Payment and Settlement Systems (Finality and Netting) Act 2002 · 2020 Revised Edition · Part 2 · Transactions Effected Through Designated System
8. Proceedings of designated system take precedence over law of insolvency
Feedback & supportLast amended by an amending law of 2018.
None of the following is to be regarded as to any extent invalid on the ground of inconsistency with the law for distribution of the assets of a person on bankruptcy or winding up, or on the appointment of a receiver, receiver and manager or an equivalent officer over any of the assets of a person:
a transfer order;
any disposition of property pursuant to such an order;
any action taken under the Rules of a designated system.
The powers of a relevant office holder and the powers of a court under the law of insolvency must not be exercised in such a way as to prevent or interfere with —
relevant office holder
“relevant office holder” means —(a)the Official Assignee exercising his or her powers under the Insolvency, Restructuring and Dissolution Act 2018;(b)a person acting in relation to a company as its liquidator, receiver, receiver and manager, judicial manager or an equivalent officer; or(c)a person acting in relation to an individual as the individual’s trustee in bankruptcy or interim receiver of the individual’s property or an equivalent officer;
the netting or settlement of a transfer order in accordance with the Rules of a designated system; or
any other action taken under the Rules of a designated system.
A debt or other liability arising out of a transfer order which is the subject of action taken under default arrangements may not be proved in a bankruptcy or winding up until the completion of the action taken under default arrangements.
transfer order
“transfer order” means —(a)an instruction by a participant, which may be carried out in or through one or more designated systems —(i)to place at the disposal of a recipient an amount of money by means of a book‑entry on the accounts of a settlement institution for a designated system; or(ii)that, when settled, results in the assumption or discharge of a payment obligation as defined by the Rules of a designated system; or(b)an instruction by a participant to transfer book‑entry securities.
A debt or other liability which by virtue of subsection (3) may not be proved must not be taken into account for the purposes of any set‑off until the completion of the action taken under default arrangements.
default arrangements
“default arrangements” means the arrangements made by the operator of a designated system to limit systemic and other types of risks that arise when a participant is or is likely to become unable to meet its obligations in respect of a transfer order, examples of which include any of the following arrangements:(a)any arrangements for netting;(b)any arrangements for the closing out of open positions;(c)any arrangements relating to collateral security;