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Companies Act 1993

Voluntary administration - Set-off and netting agreements

239AEK: When mutuality required for transactions under recognised multilateral netting agreements

You could also call this:

“When special financial agreements apply even without mutual transactions, except for certain trustee situations”

You need to know about a rule for certain financial agreements called recognised multilateral netting agreements. This rule applies even if the transactions in these agreements don’t involve mutual credits, debts, or dealings.

However, there’s an exception to this rule. The rule doesn’t apply if three things are true at the same time:

  1. The transactions in the agreement aren’t mutual credits, debts, or dealings.
  2. Someone involved in the transactions is acting as a trustee for someone else.
  3. The person acting as a trustee isn’t allowed by their trust to be part of the transaction.

If you want to know more about how this works, you can look at sections 239AEI to 239AEP of the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321652.

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239AEJ: Mutuality required for transactions under bilateral netting agreements, or

“Transactions in bilateral agreements must involve mutual exchanges between parties”

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239AEL: Application of set-off under section 239AEG to transactions subject to netting agreements, or

“Rules for handling set-offs in netting agreements during company administration”

Part 15A Voluntary administration
Set-off and netting agreements

239AEKWhen mutuality required for transactions under recognised multilateral netting agreements

  1. Sections 239AEI to 239AEP apply to transactions that are subject to a recognised multilateral netting agreement, whether or not those transactions constitute mutual credits, mutual debts, or other mutual dealings.

  2. Despite subsection (1), sections 239AEI to 239AEP do not apply to transactions that are subject to a recognised multilateral netting agreement if—

  3. those transactions do not constitute mutual credits, mutual debts, or other mutual dealings; and
    1. a party to any of those transactions is acting as a trustee for another person; and
      1. the party acting as trustee is not authorised by the terms of the trust of which the party is a trustee to enter into the transaction.

        Notes
        • Section 239AEK: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).