Collateral Security Arrangements
167. Collateral Security Arrangements(1) In this Part "Collateral Security Arrangements" means any realisable assets provided under a Charge, whether fixed or floating, or a repurchase or similar agreement or otherwise (including money provided under a Charge), granted —(a) in favour of a Recognised Investment Exchange, for the purpose of securing debts or liabilities arising in connection with the Settlement of Market Contracts;(b) in favour of a Recognised Clearing House, for the purpose of securing debts or liabilities arising in connection with their ensuring the performance of Market Contracts;(c) to a central bank for the purpose of security rights and obligations in connection with its operations in carrying out its function as a central bank; or(d) in favour of a person who agrees to make payments as a result of the transfer or allotment of specified Financial Instruments or payments made through the medium of a computer based system established by the Regulator, for the purpose of securing debts or liabilities of the transferee or allottee arising in connection therewith.(2) Where a Charge is granted partly for purposes specified in subsections (1)(a), (b) or (d) and partly for other purposes, it is a "Collateral Security Arrangement" so far as it has effect for the specified purposes.
168. Administration orders(1) The insolvency provisions outlined in the Insolvency Regulations 2015 have effect in relation to Collateral Security Arrangements and action taken in enforcing them subject to the provisions of this section.(2) The following provisions of Part 1 of the Insolvency Regulations 2015 do not apply in relation to a Collateral Security Arrangement —(a) section 46 (Interim moratorium); and(b) section 101 (Hire-purchase property).(3) Section 159 of the Insolvency Regulations (Vacation of office) does not apply to a receiver appointed under a Collateral Security Arrangement.(4) However, where a Collateral Security Arrangement falls to be enforced after the occurrence of an event to which subsection (5) applies, and there exists another Charge over some or all of the same property ranking in priority to or pari passu with the Collateral Security Arrangement, on the application of any person interested the Court may order that there shall be taken after enforcement of the Collateral Security Arrangement such steps as the Court may direct for the purpose of ensuring that the chargee under the other Charge is not prejudiced by the enforcement of the Collateral Security Arrangement.(5) This subsection applies to —(a) making an Administration application under section 8 of the Insolvency Regulations 2015; and(b) filing with the Court a copy of notice of intention to appoint an Administrator under Chapter 4 of Part 1 of the Insolvency Regulations 2015.(6) Section 170 of the Insolvency Regulations 2015 (Power to dispose of charged property) does not apply in relation to a Collateral Security Arrangement.(7) Section 209 of the Insolvency Regulations 2015 (Consequences of Winding-Up order) does not apply to a disposition of property as a result of which the property becomes subject to a Collateral Security Arrangement or any transaction pursuant to which that disposition is made.(8) However, if a person who is party to a disposition mentioned in subsection (7) has notice at the time of the disposition that a petition has been presented for the Winding-Up or bankruptcy of the estate of the party making the disposition, the value of any profit to him arising from the disposition is recoverable from him by the Relevant Office-Holder unless —(a) the person is a chargee under the Collateral Security Arrangement;(b) the disposition is made in accordance with the Default Rules of a Recognised Clearing House for the purposes of transferring a position or Asset of a Clearing Member in Default; or(c) the Court directs otherwise.(9) Any sum recoverable by virtue of subsection (8) ranks for priority, in the event of the insolvency of the person from whom it is due, immediately before preferential debts.(10) In a case falling within both subsection (7) (as a disposition of property as a result of which the property becomes subject to a Collateral Security Arrangement) and section 160(2) (as the provision of margin in relation to a Market Contract), section 160(3) applies with respect to the recovery of the amount or value of the margin and subsection (8) does not apply.
169. Power to make provision about certain other Charges(1) The Regulator may by Rules provide that the Insolvency Regulations 2015 have effect in relation to Charges of such descriptions as may be Specified, and action taken in enforcing them, subject to such provisions as may be Specified.(2) The Rules may specify any description of Charge granted in favour of —(a) a body approved under section 165;(b) the Regulator;(c) a person who has a Financial Services Permission to carry on a Regulated Activity of a description specified in the Rules; or(d) an international securities self-regulating organisation approved for the purposes of an order made under these Regulations;for the purpose of securing debts or liabilities arising in connection with or as a result of the settlement of contracts or the transfer of assets, rights or interests on a financial market.(3) The Rules may specify any description of Charge granted for that purpose in favour of any other person in connection with exchange facilities or Clearing Services provided by a Recognised Body or by any such body, person, authority or organisation as is mentioned in subsection (2).(4) Where a Charge is granted partly for the purpose specified in subsection (2) and partly for other purposes, the power conferred by this section is exercisable in relation to the Charge so far as it has effect for that purpose.(5) The Rules may —(a) make the same or similar provision in relation to the Charges to which they apply as is made by or under sections 179(1)(h) and 168 in relation to Collateral Security Arrangements; or(b) apply any of those provisions with such exceptions, additions or adaptations as are specified in the Rules.(6) Rules under this section may provide that they apply or do not apply to a Charge if or to the extent that it secures obligations of a Specified description, is a Charge over property of a Specified description or contains provisions of a Specified description.