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Deposit Takers Act 2023

Crisis management and resolution - Moratorium and restriction on resolution trigger

293: Moratorium does not limit or prevent certain things in relation to derivatives, etc

You could also call this:

"A moratorium doesn't stop you doing certain things with special agreements, like derivatives."

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If you have an agreement about a derivative, a relevant security interest, or a specified instrument, a moratorium does not stop you from doing certain things. You can deny any liability or obligation under the agreement, or accelerate payment. You can also terminate or close out any transaction relating to the agreement, or enforce any security interest under the agreement. Some words in this section have special meanings, like derivative, which is defined in section 8(4) of the FMCA, and relevant security interest, which means a security interest that secures payment or performance of an obligation under or in relation to a qualifying derivative.

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292: Moratorium and restriction on resolution trigger do not limit or affect certain rights under netting agreement or rights under rules of designated FMI, or

"Rules to help a bank in trouble don't affect special agreements between banks or their rights in certain markets."

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294: Restriction on resolution trigger does not limit or prevent certain things in relation to derivatives, etc, after stay, or

"The government helping a bank in trouble doesn't stop you doing certain things with your bank agreements."

Part 7Crisis management and resolution
Moratorium and restriction on resolution trigger

293Moratorium does not limit or prevent certain things in relation to derivatives, etc

  1. Section 284(1) does not limit or prevent an agreement, or a party to an agreement, from doing any of the things referred to in subsection (2) in relation to a derivative, a relevant security interest, or a specified instrument.

  2. The things are as follows:

  3. denying any liability or obligation under the agreement:
    1. accelerating or requiring the payment or performance of a liability or an obligation:
      1. terminating or closing out any transaction relating to the agreement:
        1. enforcing any security interest under the agreement.

          1. In this section and sections 292, 294, and 296,—

            collateral has the same meaning as in section 62A of the Corporations (Investigation and Management) Act 1989

              derivative means a derivative within the meaning of section 8(4) of the FMCA (but disregarding any specified declaration)

                possession has the same meaning as in section 62A of the Corporations (Investigation and Management) Act 1989

                  qualifying derivative has the same meaning as in section 62A of the Corporations (Investigation and Management) Act 1989

                    relevant security interest means a security interest that secures payment or performance of an obligation under or in relation to a qualifying derivative

                      specified declaration means a declaration under subpart 3 of Part 9 of the FMCA other than a declaration that has been specified in the regulations for the purposes of this definition

                        specified instrument means an agreement of a kind that is—

                        1. prescribed in the regulations; and
                          1. entered into in connection with a netting agreement (within the meaning of section 310A of the Companies Act 1993).