Securities and Futures Act 2001 · 2020 Revised Edition · Part 3 · Clearing Facilities
81C. Proceedings of approved clearing house or recognised clearing house take precedence over law of insolvency
Feedback & supportLast amended by an amending law of 2020. 2 amendments in all.
The following are not invalid to any extent at law by reason only of inconsistency with any written law or rule of law relating to the distribution of the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver, a receiver and manager or a person in an equivalent capacity over any of the assets of a person:
manager
“manager”, in relation to a collective investment scheme, means a person, by whatever name called, who is responsible for managing the property of, or operating, the collective investment scheme;
a market contract;
a disposition of property pursuant to a market contract;
the provision of market collateral;
a contract effected by an approved clearing house or a recognised clearing house for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract;
a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral;
a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made;
a disposition of property for the purpose of enforcing a market charge;
a market charge;
any default proceedings.
A relevant office holder, or a court applying the law relating to insolvency in Singapore, must not exercise his, her or its power 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 corporation as the liquidator, the provisional liquidator, the receiver, the receiver and manager or the judicial manager of the corporation, or acting in an equivalent capacity in relation to a corporation; or(c)a person acting in relation to an individual as the trustee in bankruptcy, or the interim receiver of the property, of the individual, or acting in an equivalent capacity in relation to an individual;
the settlement of a market contract in accordance with the business rules of an approved clearing house or a recognised clearing house, or any proceedings or other action taken under those business rules; or
any default proceedings.
Subsection (2) does not operate to prevent a relevant office holder from recovering an amount under section 81I after the completion of a specified event referred to in section 81I(3).
Where a participant which is also a bank licensed under the Banking Act 1970 becomes insolvent, the liabilities of the bank accorded priority under sections 61 and 62 of that Act and the Payment and Settlement Systems (Finality and Netting) Act 2002 have priority over any unsecured liabilities of the bank arising from and after the settlement of market contracts.
participant
“participant” means —(a)for the purposes of Part 2, a person who may participate in one or more of the services provided by an approved exchange or a recognised market operator, in its capacity as an approved exchange or a recognised market operator, as the case may be;(aa)for the purposes of Part 2A, a person who may participate in one or more of the services provided by a licensed trade repository or licensed foreign trade repository, in its capacity as a licensed trade repository or licensed foreign trade repository, as the case may be;(b)for the purposes of Part 3, a person who, under the business rules of an approved clearing house or a recognised clearing house, may participate in one or more of the services provided by the approved clearing house or recognised clearing house, in its capacity as an approved clearing house or a recognised clearing house, as the case may be; or(c)for the purposes of any other provision of this Act, a person who participates in a collective investment scheme by way of owning one or more units in a collective investment scheme;
Where a participant that is also a merchant bank licensed under the Banking Act 1970 becomes insolvent, the liabilities of the merchant bank accorded priority under section 62B of that Act and the Payment and Settlement Systems (Finality and Netting) Act 2002 have priorities over any unsecured liabilities of the merchant bank arising from and after the settlement of market contracts.
settlement
“settlement”, in relation to a market contract, includes partial settlement;
To avoid doubt, subsection (4) does not affect the settlement of market contracts in accordance with the business rules of an approved clearing house or a recognised clearing house.