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Setting-off and netting rights in relation to reverse transfer and onward transfer

Financial Services and Markets (Resolution of Financial Institutions) Regulations 2024

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—(1) A reverse transfer under section 70 of the Act of a part (but not the whole) of the business of a transferor that was transferred to a transferee under a certificate of transfer must not provide for the transfer of some, and not all, of the protected rights and liabilities between the transferor and the transferee.(2) An onward transfer under section 72 of the Act of a part (but not the whole) of the business of a transferor that was transferred to a transferee under a certificate of transfer must not provide for the transfer of some, and not all, of the protected rights and liabilities between the transferee and the 2nd transferee.(3) In this regulation —(a)rights and liabilities between the transferor and the transferee mentioned in paragraph (1) are protected if —(i)they are rights and liabilities that arise from one or more financial contracts between them; and(ii)they are rights and liabilities which either the transferor or the transferee is entitled to set‑off or net under a set‑off arrangement, netting arrangement or title transfer arrangement; and(b)rights and liabilities between the transferee and the 2nd transferee mentioned in paragraph (2) are protected if —(i)they are rights and liabilities that arise from one or more financial contracts between them; and(ii)they are rights and liabilities which either the transferee or the 2nd transferee is entitled to set‑off or net under a set‑off arrangement, netting arrangement or title transfer arrangement.(4) For the purposes of paragraph (3)(a), it is immaterial whether —(a)the set‑off arrangement or netting arrangement also permits the transferor or the transferee to set‑off or net rights and liabilities with another person; or(b)the right to set‑off or net is exercisable only on the occurrence of a particular event.(5) For the purposes of paragraph (3)(b), it is immaterial whether —(a)the set‑off arrangement or netting arrangement also permits the transferee or the 2nd transferee to set-off or net rights and liabilities with another person; or(b)the right to set‑off or net is exercisable only on the occurrence of a particular event.

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