Effect of set‑off on claim
7.5.77 Effect of set‑off on claim
If:
the SEGC allows a claim by a person (the claimant) in respect of a liability of another person (the defaulter); and
the liability of the defaulter to the claimant has been reduced, by an amount of money or a number of securities (the set‑off reduction), because of:
the exercise by the claimant or the defaulter of a right of set‑off, whether under an agreement or otherwise; or
the operation of an agreement so far as it provides for the automatic set‑off of liabilities; and
but for this regulation, the reduction of the defaulter’s liability would not be taken into account when working out the obligations of the SEGC in respect of the claim;
this regulation applies for the purposes of working out those obligations.
If:
the SEGC is required to satisfy the claim by paying an amount; and
the set‑off reduction consists of an amount;
the amount the SEGC must pay in respect of the claim is reduced by the amount of the set‑off reduction.
If:
the SEGC is required to satisfy the claim by paying an amount; and
the set‑off reduction consists of a number of securities;
then:
the SEGC must work out the value of the securities; and
the amount the SEGC must pay in respect of the claim is reduced by the value worked out under paragraph (c).
If:
the SEGC is required to satisfy the claim by transferring securities of a particular kind; and
the set‑off reduction consists of a number of securities of that kind;
the number of securities that the SEGC must transfer in respect of the claim is reduced by the number mentioned in paragraph (b).
If:
the SEGC is required to satisfy the claim by transferring securities of a particular kind; and
the set‑off reduction consists of a number of securities that are not of that kind;
then:
the SEGC must work out:
the value of the securities that constitute the set‑off reduction; and
the number of securities of the kind mentioned in paragraph (a) that are equal in value to the value worked out under subparagraph (i); and
the number of securities that the SEGC is required to transfer in respect of the claim is reduced by the number worked out under subparagraph (c)(ii).
If:
the SEGC is required to satisfy the claim by transferring securities of a particular kind; and
the set‑off reduction consists of an amount of money;
then:
the SEGC must work out the number of securities of that kind that are equal in value to that amount; and
the number of securities that the SEGC must transfer in respect of the claim is reduced by the number worked out under paragraph (c).
This Act’s bill:Explanatory statement
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