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(b) that a meeting of creditors had been summoned under section 98 of the Insolvency Act 1986 or that a winding-up petition was pending,
the value of any profit to him arising from the sum being so taken into account (or being so taken into account to that extent) is recoverable from him by the relevant office-holder unless the court directs otherwise.
(4A) Subsection (4) does not apply in relation to a sum arising from a contract effected under the default rules of a recognised investment exchange or recognised clearing house.'.-- [Mr. Redwood.]
Clause 154
Disclaimer of property, rescission of contracts, &c.
Amendments made : No. 189, in page 167, line 23, leave out and 315' and insert , 315 and 345'.
No. 190, in page 167, line 24, at end insert--
(1A) In Scotland, a permanent trustee on the sequestrated estate of a defaulter or a liquidator is bound by any market contract to which that defaulter is a party and by any contract as is mentioned in subsection (1)(b) above notwithstanding section 42 of the Bankruptcy (Scotland) Act 1985 or any rule of law to the like effect applying in liquidations.'.
No. 191, in page 167, line 27, after petition)' insert
, and section 32(8) of the Bankruptcy (Scotland) Act 1985 (effect of dealing with debtor relating to estate vested in permanent trustee),'.
No. 192, in page 167, line 38, leave out subsection (3) and insert--
(3) However, where--
(a) a market contract is entered into by a person who has notice that a petition has been presented for the winding up or bankruptcy or sequestration of the estate of the other party to the contract, or
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(b) margin in relation to a market contract is accepted by a person who has notice that such a petition has been presented in relation to the person by whom or on whose behalf the margin is provided,the value of any profit to him arising from the contract or, as the case may be, the amount or value of the margin is recoverable from him by the relevant office-holder unless the court directs otherwise.
(3A) Subsection (3)(a) does not apply where the person entering into the contract is a recognised investment exchange or recognised clearing house acting in accordance with its rules, or where the contract is effected under the default rules of such an exchange or clearing house ; but subsection (3)(b) applies in relation to the provision of margin in relation to such a contract.'.-- [Mr. Redwood.]
Clause 155
Adjustment of prior transactions
Amendments made : No. 193, in page 168, line 1, leave out market contract' and insert transaction to which this section applies'. No. 194, in page 168, leave out lines 7 to 10.
No. 195, in page 168, line 11, leave out a market contract' and insert any such transaction'.
No. 196, in page 168, leave out lines 18 to 20.
No. 197, in page 168, line 21, leave out subsection (3) and insert--
(3) This section applies to--
(a) a market contract to which a recognised investment exchange or recognised clearing house is a party or which is entered into under its default rules, and
(b) a disposition of property in pursuance of such a market contract.
(4) Where margin is provided in relation to a market contract and (by virtue of subsection (3)(a) or otherwise) no such order or decree as is mentioned in subsection (1) or (2) has been, or could be, made in relation to that contract, this section applies to--
(a) the provision of the margin,
(b) any contract effected by the exchange or clearing house in question for the purpose of realising the property provided as margin, and
(c) any disposition of property in accordance with the rules of the exchange or clearing house as to the application of property provided as margin.'.
No. 198, in page 168, line 31, leave out Clause 156.-- [Mr. Redwood]
Clause 157
Delegations of functions to designated agency
Amendments made : No. 199, in page 169, line 24, leave out Part' and insert section'.
No. 200, in page 169, line 30, leave out Part' and insert section'.
No. 201, in page 169, line 32, [Clause 157] at end insert (3) The Secretary of State may--
(a) in the circumstances mentioned in subsection (3), (4) or (5) of section 115 of the Financial Services Act 1986, or
(b) if it appears to him that a designated agency is unable or unwilling to discharge all or any of the functions under this Part which have been transferred to it,
make an order under that section resuming all functions under this Part which have been transferred to the agency.
This does not affect his power to make an order under subsection (1) or (2) of that section with respect to such functions.'.-- [Mr. Redwood.]
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Clause 158
Supplementary provisions
Amendment made : No. 202, in page 170, line 8, at end insert (4) The references in sections 119 and 121 of the Financial Services Act 1986 (competition) to what is necessary for the protection of investors shall be construed as including references to what is necessary for the purposes of this Part.
(5) Section 204 of the Financial Services Act 1986 (service of notices) applies in relation to a notice, direction or other document required or authorised by or under this Part to be given to or served on any person other than the Secretary of State.'.-- [Mr. Redwood.]
Clause 159
Certain overseas exchanges and clearing houses
Amendments made : No. 203, in page 170, line 13, leave out from beginning to in' in line 15 and insert is approved by him'. No. 204, in page 170, line 20, leave out subsections (2) and (3) and insert--
(2) The Secretary of State shall not approve an overseas investment exchange or clearing house unless he is satisfied (a) that the rules and practices of the body, together with the law of the country in which the body's head office is situated, provide adequate procedures for dealing with the default of persons party to contracts connected with the body, and
(b) that it is otherwise appropriate to approve the body. (3) The reference in subsection (2)(a) to default is to a person being unable to meet his obligations.'.
No. 205, in page 170, line 33, leave out regulations may' and insert
Secretary of State may make regulations which'.
No. 206, in page 170, line 38, at end insert
; and different provision may be made with respect to different bodies or descriptions of body.'.
No. 207, in page 170, line 38, at end insert--
(6) Where the regulations apply any provisions of the Financial Services Act 1986, they may provide that those provisions apply with such exceptions, additions and adaptations as appear to the Secretary of State to be necessary or expedient.'.
No. 208, in page 170, line 39, leave out Clause 160.-- [Mr. Redwood.]
Clause 161
Market charges
Amendments made : No. 209, in page 171, leave out line 22 and insert
In this Part "market charge" means a charge'.
No. 210, in page 171, leave out line 35.
No. 211, in page 171, line 37, leave out from purposes' to end of line 39 and insert
it is a "market charge" so far as it has effect for the specified purposes.'.
No. 212, in page 172, line 4, leave out sections 162 and 163' and insert this Part'.
No. 213, in page 172, line 5, at end insert--
(4A) The regulations may provide that a charge shall or shall not be treated as a market 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.'.
No. 214, in page 172, line 6, leave out subsection (5) and insert--
(5) Before making regulations under this section in relation to charges granted in favour of a person within subsection (1)(c), the Secretary of State shall consult the Treasury and the Bank of England.'.-- [Mr. Redwood.]
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Clause 162
Modifications of the law of insolvency
Amendment made : No. 215, in page 172, line 25, leave out subsection (5) and insert
(5) Before making regulations under this section in relation to charges granted in favour of a person within section 161(1)(c), the Secretary of State shall consult the Treasury and the Bank of England.'.-- [Mr. Redwood.]
Clause 163
Administration orders, &c.
Amendments made : No. 216, in page 172, line 29, leave out subsections (1) to (3) and insert--
(1) The following provisions of the Insolvency Act 1986 (which relate to administration orders and administrators) do not apply in relation to a market charge--
(a) sections 10(1)(b) and 11(3)(c) (restriction on enforcement of security while petition for administration order pending or order in force), and
(b) section 15(1) and (2) (power of administrator to deal with charged property) ;
and section 11(2) of that Act (receiver to vacate office when so required by administrator) does not apply to a receiver appointed under a market charge.
(2) However, where a market charge falls to be enforced after an administration order has been made or a petition for an administration order has been presented, and there exists another charge over some or all of the same property ranking in priority to or pari passu with the market charge, the court may order that there shall be taken after enforcement of the market charge 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 market charge.
(3) The following provisions of the Insolvency Act 1986 (which relate to the powers of receivers) to not apply in relation to a market charge--
(a) section 43 (power of administrative receiver to dispose of charged property), and
(b) section 61 (power of receiver in Scotland to dispose of an interest in property).'.
No. 217, in page 172, line 37, leave out subsections (4) and (5) and insert --
(4) Sections 127 and 284 of the Insolvency Act 1986 (avoidance of property dispositions effected after commencement of winding up or presentation of bankruptcy petition), and section 32(8) of the Bankruptcy (Scotland) Act 1985 (effect of dealing with debtor relating to estate vested in permanent trustee), do not apply to 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.
(5) However, if a person (other than the chargee under the market charge) who is party to a disposition mentioned in subsection (4) has notice at the time of the disposition that a petition has been presented for the winding up or bankruptcy or sequestration 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 the court directs otherwise.'. No. 218, in page 173, line 6, at end insert--
(7) In a case falling within both subsection (4) above (as a disposition of property as a result of which the property becomes subject to a market charge) and section 154(2) (as the provision of margin in relation to a market contract), section 154(3) applies with respect to the recovery of the amount or value of the margin and subsection (5) above does not apply.'.-- [Mr. Redwood.]
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Clause 164
Power to make provision about certain other charges
Amendment made : No. 219, in page 173, line 12, leave out subsection (2) and insert
(2) The regulations may specify any description of charge granted in favour of--
(a) a body approved under section 159 (certain overseas exchanges and clearing houses),
(b) a person included in the list maintained by the Bank of England for the purposes of section (Certain money market institutions) (certain money market institutions),
(c) the Bank of England,
(d) an authorised person within the meaning of the Financial Services Act 1986, or
(e) an international securities self-regulating organisation within the meaning of that Act,
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. (2A) The regulations 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 investment exchange or recognised clearing house or by any such body, person, authority or organisation as is mentioned in subsection (2). (2B) 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 the purpose.'.
No. 220, in page 173, line 32, leave out subsections (4) and (5) and insert --
(4) Before making regulations under this section relating to a description of charges defined by reference to their being granted-- (
(a) in favour of a person included in the list maintained by the Bank of England for the purposes of section (Certain money market institutions), or in connection with exchange facilities or clearing services provided by a person included in that list, or
(b) in favour of the Bank of England, or in connection with settlement arrangements provided by the Bank,
the Secretary of State shall consult the Treasury and the Bank of England.
(5) Regulations 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.'.-- [Mr. Redwood.]
Clause 165
Application of margin not affected by subsequent interests
Amendment made : No. 221, in page 173, line 41, leave out Clause 165.-- [Mr. Redwood.]
Clause 167
Proceedings against market property by unsecured creditors
Amendment made : No. 222, in page 174, line 8, leave out from property' to margin' and insert
(other than land) is held by a recognised investment exchange or recognised clearing house as'.-- [Mr. Redwood.]
Clause 168
Power to apply provisions to other cases
Amendment made : No. 223, in page 174, line 31, leave out from beginning to third to' in line 37 and insert--
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(a) section 159, ( Certain money market institutions ) or ( Settlement arrangements provided by the Bank of England ) (power to extend provisions relating to market contracts), or(b) section 164 (power to extend provisions relating to market charges),
includes power to apply sections ( Application of margin not affected by certain other interests ), ( Priority of floating market charge over subsequent charges ), 166 and 167'.-- [Mr. Redwood.]
Clause 169
Powers of court in relation to certain proceedings begun before commencement
Amendments made : No. 224, in page 175, line 8, leave out Part' and insert section'.
No. 225, in page 175, line 29, leave out Part' and insert section'.
No. 226, in page 175, line 35, leave out this Part specified below' and insert
Schedule (Financial markets and insolvency : provisions applying to pre- commencement cases)'.
No. 227, in page 175, line 37, leave out subsection (5) and insert--
(5) The provisions of that Schedule ("the relevant provisions") reproduce the effect of certain provisions of this Part as they appeared in the Bill for this Act as introduced into the House of Lords and published on that date.'.-- [Mr. Redwood.]
Clause 170
Insolvency proceedings in other jurisdictions
Amendments made : No. 228, in page 177, line 3, leave out from beginning to by' in line 4 and insert
insofar as the making of the order or the doing of the act would be prohibited in the case of a court in the United Kingdom or a relevant office-holder'.
No. 229, in page 177, line 4, at end insert--
(3) Subsection (2) does not affect the recognition or enforcement of a judgment required to be recognised or enforced under or by virtue of the Civil Jurisdiction and Judgments Act 1982.'.-- [Mr. Redwood.]
Clause 171
Indemnity for certain acts, &c.
Amendment made : No. 230, in page 177, line 19, after servant' insert
or member of the governing body'.-- [Mr. Redwood.].
Clause 173
Meaning of "default rules" and related expressions
Amendments made : No. 231, in page 177, line 44, leave out from beginning to unable' and insert
for the taking of action in the event of a person appearing to be'.
No. 232, in page 178, line 8, at end insert--
(4) If an exchange or clearing house takes action under its default rules in respect of a person, all subsequent proceedings under its rules for the purposes of or in connection with the settlement of market contracts to which the defaulter is a party shall be treated as done under its default rules.'.-- [Mr. Redwood.]
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