Financial Sector (Transfer and Restructure) Act 1999

This section applies if:

a certificate of transfer comes into force in respect of a partial transfer; and

just before the partial transfer, the transferring body is a party to:

a close‑out netting contract; or

a security given over financial property, in respect of an obligation of the transferring body under a close‑out netting contract; or

a market netting contract; or

a security given over property, in respect of an obligation of the transferring body under a market netting contract; or

an approved netting arrangement; and

the partial transfer covers some (but not all) of the following assets and liabilities:

the assets and liabilities the body has, under the close‑out netting contract, market netting contract or approved netting arrangement, with respect to another party to the contract or arrangement (the counterparty);

those assets that are property over which security is given in respect of an obligation of the transferring body under the close‑out netting contract or the market netting contract.

The Payment Systems and Netting Act 1998 affects what the assets and liabilities of a party to a close‑out netting contract, market netting contract or approved netting arrangement are taken to include.

The partial transfer is void:

to the extent of the assets or liabilities the transferring body has, just before the partial transfer, under the close‑out netting contract, market netting contract or approved netting arrangement, with respect to the counterparty; and

if security is given over financial property in respect of an obligation of the transferring body under a close‑out netting contract—to the extent that the assets are financial property in the possession or control of one of the following persons just before the partial transfer:

the counterparty;

another person (who is not the transferring body) on behalf of the counterparty, under the terms of an arrangement evidenced in writing; and

if security is given over property in respect of an obligation of the transferring body under a market netting contract—to the extent that the assets are that property.