PART I INTRODUCTORY Title and commencement 1 1 This Order may be cited as the Companies (No. 2) (Northern Ireland) Order 1990 and shall come into operation on such day or days as the Head of the Department may by order appoint . 2 An order under paragraph (1) may— a contain such transitional provisions and savings as appear to the Head of the Department to be necessary or expedient; b amend any statutory provision which refers to the coming into operation of a provision brought into operation by the order so as to substitute a reference to the actual date on which it comes into operation. Interpretation 2 1 The Interpretation Act (Northern Ireland) 1954 shall apply to Article 1 and the following provisions of this Order as it applies to a Measure of the Northern Ireland Assembly. 2 In this Order— “the Department” means the Department of Economic Development; “the Companies Order” means the Companies (Northern Ireland) Order 1986 ; Definition rep. by 1993 c.36 “the Insolvency Order” means the Insolvency (Northern Ireland) Order 1989 . PART II INVESTIGATIONS AND POWERS TO OBTAIN INFORMATION Amendments of the Companies Order Investigations by inspectors not leading to published report 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Production of documents and evidence to inspectors 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duty of inspectors to report 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to bring civil proceedings on the company's behalf 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses of investigating a company's affairs 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power of Department to present winding-up petition 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inspectors' reports as evidence 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investigation of company ownership 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Department's power to require production of documents 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Entry and search of premises 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for security of information obtained 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Punishment for destroying, mutilating, &c. company documents 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Punishment for furnishing false information 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disclosure of information by Department or inspector 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Protection of banking information 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investigation of bodies incorporated outside Northern Ireland 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investigation of unregistered companies 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offences committed by bodies corporate or unincorporated bodies 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arts. 21‐23 rep. by 1993 c.36 Amendments of other statutory provisions Arts. 24‐26 rep. by SI 2001/3649 Art. 26 rep. by 2002 NI 4 Art. 27 rep. by 2002 NI 6 PART III REGISTRATION OF COMPANY CHARGES Introduction Introduction 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registration in the companies charges register Charges requiring registration 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The companies charges register 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delivery of particulars for registration 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delivery of further particulars 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of omissions and errors in registered particulars 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Memorandum of charge ceasing to affect company's property 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further provisions with respect to voidness of charges 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional information to be registered 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Copies of instruments and register to be kept by company Copies of instruments and register to be kept by company 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions Power to make further provision by regulations 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other supplementary provisions 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation, &c. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges on property of company incorporated outside Northern Ireland 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of provisions to unregistered companies 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Article 43—Amendments PART IV OTHER AMENDMENTS OF COMPANY LAW A company's capacity and related matters A company's capacity and the power of the directors to bind it 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Invalidity of certain transactions involving directors 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of company's objects 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charitable companies 47 1 In the Charities (Northern Ireland) Order 1987 for Article 9 (charitable companies) substitute— Charitable companies: alteration of objects clause 9 1 Where a charity is a company or other body corporate having power to alter the instruments establishing or regulating it as a body corporate, no exercise of that power which has the effect of the body ceasing to be a charity shall be valid so as to affect the application of— a any property acquired under any disposition or agreement previously made otherwise than for full consideration in money or money's worth, or any property representing property so acquired, b any property representing income which has accrued before the alteration is made, or c the income from any such property as aforesaid. 2 Where a charity is a company, any alteration by it of the objects clause in its memorandum of association is ineffective without the prior written consent of the Department; and it shall deliver a copy of that consent to the registrar of companies under Article 17(1)(a) or (b) of the Companies Order along with the printed copy of the memorandum as altered. 3 Article 17(3) of that Order (offences) applies in relation to a default in complying with paragraph (2) as regards the delivery of a copy of the Department's consent. Charitable companies: invalidity of certain transactions 9A 1 Articles 45 and 45A of the Companies Order (capacity of company not limited by its memorandum; power of directors to bind company) do not apply to the acts of a company which is a charity except in favour of a person who— a gives full consideration in money or money's worth in relation to the act in question, and b does not know that the act is not permitted by the company's memorandum or, as the case may be, is beyond the powers of the directors, or who does not know at the time the act is done that the company is a charity. 2 However, where such a company purports to transfer or grant an interest in property, the fact that the act was not permitted by the company's memorandum or, as the case may be, that the directors in connection with the act exceeded any limitation on their powers under the company's constitution, does not affect the title of a person who subsequently acquires the property or any interest in it for full consideration without actual notice of any such circumstances affecting the validity of the company's act. 3 In any proceedings arising out of paragraph (1) the burden of proving— a that a person knew that an act was not permitted by the company's memorandum or was beyond the powers of the directors, or b that a person knew that the company was a charity, lies on the person making that allegation. 4 Where a company is a charity, the ratification of an act under Article 45(3) of the Companies Order, or the ratification of a transaction to which Article 330A of that Order applies (invalidity of certain transactions to which directors or their associates are parties), is ineffective without the prior written consent of the Department. Charitable companies: status to appear on correspondence, etc. 9B 1 Where a company is a charity and its name does not include the word “charity” or the word “charitable”, the fact that the company is a charity shall be stated in English in legible characters— a in all business letters of the company, b in all its notices and other official publications, c in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, d in all conveyances purporting to be executed by the company, and e in all its bills of parcels, invoices, receipts and letters of credit. 2 In paragraph (1)(d) “conveyance” means any instrument creating, transferring, varying or extinguishing an interest in land. 3 Article 357(2) to (4) of the Companies Order (offences in connection with failure to include required particulars in business letters, &c.) apply in relation to a contravention of paragraph (1). . 2 In Article 2(2) of the Charities (Northern Ireland) Order 1987 (definitions), at the appropriate place insert— “company” means a company formed and registered under the Companies Order, or to which the provisions of that Order apply as they apply to such a company; “Companies Order” means the Companies (Northern Ireland) Order 1986; . De-regulation of private companies Written resolutions of private companies 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Written resolutions: supplementary provisions 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election by private company to dispense with certain requirements 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elective resolution of private company 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to make further provision by regulations 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointment and removal of auditors and related matters Introduction 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointment of auditors 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rights of auditors 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remuneration of auditors 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Removal, resignation, &c. of auditors 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement by person ceasing to hold office as auditor 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company records and related matters Delivery of documents to the registrar 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Keeping and inspection of company records 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions as to company records and related matters 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous “Subsidiary”, “holding company” and “wholly-owned subsidiary” 62 1 In Part I of the Companies Order (introductory and interpretation), for Article 4 substitute— “Subsidiary”, “holding company” and “wholly-owned subsidiary” 4 1 A company is a “subsidiary” of another company, its “holding company”, if that other company— a holds a majority of the voting rights in it, or b is a member of it and has the right to appoint or remove a majority of its board of directors, or c is a member of it and controls alone, pursuant toan agreement with other shareholders or members, amajority of the voting rights in it, or if it is a subsidiary of a company which is itself a subsidiary of that other company. 2 A company is a “wholly-owned subsidiary” of another company if it has no members except that other and that other's wholly-owned subsidiaries or persons acting on behalf of that other or its wholly-owned subsidiaries. 3 In this Article “company” includes any body corporate. Provisions supplementing Article 4 4A 1 The provisions of this Article explain expressions used in Article 4 and otherwise supplement that Article. 2 In Article 4(1)(a) and (c) the references to the voting rights in a company are to the rights conferred on shareholders in respect of their shares or, in the case of a company not having a share capital, on members, to vote at general meetings of the company on all, or substantially all, matters. 3 In Article 4(1)(b) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters; and for the purposes of that provision— a a company shall be treated as having the right to appoint to a directorship if— i a person's appointment to it follows necessarily from his appointment as director of the company, or ii the directorship is held by the company itself; and b a right to appoint or remove which is exercisable only with the consent or concurrence of another person shall be left out of account unless no other person has a right to appoint or, as the case may be, remove in relation to that directorship. 4 Rights which are exercisable only in certain circumstances shall be taken into account only— a when the circumstances have arisen, and for so long as they continue to obtain, or b when the circumstances are within the control of the person having the rights; and rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account. 5 Rights held by a person in a fiduciary capacity shall be treated as not held by him. 6 Rights held by a person as nominee for another shall be treated as held by the other; and rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence. 7 Rights attached to shares held by way of security shall be treated as held by the person providing the security— a where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with his instructions; b where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in his interests. 8 Rights shall be treated as held by a company if they are held by any of its subsidiaries; and nothing in paragraph (6) or (7) shall be construed as requiring rights held by a company to be treated as held by any of its subsidiaries. 9 For the purposes of paragraph (7) rights shall be treated as being exercisable in accordance with the instructions or in the interests of a company if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of— a any subsidiary or holding company of that company, or b any subsidiary of a holding company of that company. 10 The voting rights in a company shall be reduced by any rights held by the company itself. 11 References in any provision of paragraphs (5) to (10) to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him. 12 In this Article “company” includes any body corporate. . 2 Any reference in any statutory provision to a “subsidiary” or “holding company” within the meaning of Article 4 of the Companies Order shall, subject to any express amendment or saving made by or under this Order, be read as referring to a subsidiary orholding company as defined in Article 4 as substituted by paragraph(1). This applies whether the reference is specific or general, or express or implied. 3 In Part I of the Companies Order (introductory and interpretation) after Article 4A insert— Power to amend Articles 4 and 4A 4B 1 The Department may by regulations amend Articles 4 and 4A so as to alter the meaning of the expressions “holding company”, “subsidiary” or “wholly-owned subsidiary”. 2 Any amendment made by regulations under this Article does not apply for the purposes of statutory provisions outside the Companies Orders unless the regulations so provide. 3 So much of section 29(1) of the Interpretation Act (Northern Ireland) 1954 (effect of repeal and re-enactment) as relates to statutory documents shall not apply in relation to any repeal and re-enactment effected by regulations made under this Article. . Para. (4)—amendments and savings 5 So much of section 29(1) of the Interpretation Act (Northern Ireland) 1954 (effect of repeal and re-enactment) as relates to statutory documents shall not apply in relation to the repeal and re-enactment by this Article of Article 4 of the Companies Order. Form of articles for partnership company 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Membership of holding company 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company contracts and execution of documents by companies 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Members' rights to damages, &c. 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial assistance for purposes of employees' share scheme 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issue of redeemable shares 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disclosure of interests in shares 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Orders imposing restrictions on shares 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A company's registered office 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effecting of insurance for officers and auditors of company 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase of limits on certain exemptions 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual returns 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application to declare dissolution of company void 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abolition of doctrine of deemed notice 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rights of inspection and related matters 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART V FINANCIAL MARKETS AND INSOLVENCY Introduction Introduction 79 This Part has effect for the purposes of safeguarding the operation of certain financial markets by provisions with respect to— a the insolvency, winding up or default of a person party to transactions in the market (Articles 80 to 94), b the effectiveness or enforcement of certain charges given to secure obligations in connection with such transactions (Articles 95 to 98), and c rights and remedies in relation to certain property provided as cover for margin in relation to such transactions or subject to such a charge (Articles 99 to 103). Recognised investment exchanges and clearing houses Market contracts 80 1 This Part applies to the following descriptions of contract connected with a recognised investment exchange or recognised clearing house. The contracts are referred to in this Part as “market contracts”. 2 Except as provided in paragraph (2A), in relation to a recognised investment exchange, this Part applies to— a contracts entered into by a member or designated non-member of the exchange which are either— i contracts made on the exchange or on an exchange to whose undertaking the exchange has succeeded whether by amalgamation, merger or otherwise; or ii contracts in the making of which the member or designated non-member was subject to the rules of the exchange or of an exchange to whose undertaking the exchange has succeeded whether by amalgamation, merger or otherwise; and b contracts subject to the rules of the exchange entered into by the exchange for the purposes of or in connection with the provision of clearing services. A “designated non-member” means a person in respect of whom action may be taken under the default rules of the exchange but who is not a member of the exchange. 2A This Part does not apply to contracts falling within paragraph (2)(a) where the exchange in question is recognised overseas investment exchange. 3 In relation to a recognised clearing house, this Part applies to contracts subject to the rules of the clearing house entered into by the clearing house for the purposes of or in connection with the provision of clearing services for a recognised investment exchange. 4 The Department may by regulations make further provision as to the contracts to be treated as “market contracts”, for the purposes of this Part, in relation to a recognised investment exchange or recognised clearing house. 5 The regulations may add to, amend or repeal the provisions of paragraphs (2) and (3). Modifications of the law of insolvency 81 1 The general law of involvency has effect in relation to market contracts, and action taken under the rules of a recognised investment exchange or recognised clearing house with respect to such contracts, subject to the provisions of Articles 82 to 88. 2 So far as those provisions relate to insolvency proceedings in respect of a person other than a defaulter, they apply in relation to— a proceedings in respect of a member or designated non-member of a recognised investment exchange or a member of a recognised clearing house, and b proceedings in respect of a party to a market contract begun after a recognised investment exchange or recognised clearing house has taken action under its default rules in relation to a person party to the contract as principal, but not in relation to any other insolvency proceedings, not withstanding that rights or liabilities arising from market contracts fall to be dealt with in the proceedings. 3 The reference in paragraph (2)(b) to the beginning of insolvency proceedings is to— a the presentation of a bankruptcy petition, or b the application for an administration order or the presentation of a winding-up petition or the passing of a resolution for voluntary winding up, c the appointment of an administrative receiver. 3A In paragraph (3)(b) the reference to an application for an administration order shall be taken to include a reference to— a in a case where an administrator is appointed under paragraph 15 or 23 of Schedule B1 to the Insolvency Order (appointment by floating charge holder, company or directors) following filing with the Court of a copy of a notice of intention to appoint under that paragraph, the filing of the copy of the notice, and b in a case where an administrator is appointed under either of those paragraphs without a copy of a notice of intention to appoint having been filed with the Court, the appointment of the administrator. 4 The Department may make further provision by regulations modifying the law of insolvency in relation to the matters mentioned in paragraph (1). 5 The regulations may add to, amend or repeal the provisions mentioned in paragraph (1), and any other provision of this Part as it applies for the purposes of those provisions, or provide that those provisions have effect subject to such additions, exceptions or adaptations as are specified in the regulations. Proceedings of exchange or clearing house take precedence over insolvency procedures 82 1 None of the following shall be regarded as to any extent invalid at law on the ground of inconsistency with the law relating to the distribution of the assets of a person on bankruptcy or winding up or in the administration of an insolvent estate— a a market contract, b the default rules of a recognised investment exchange or recognised clearing house, c the rules of a recognised investment exchange or recognised clearing house as to the settlement of market contracts not dealt with under its default rules. 2 The powers of a relevant office-holder in his capacity as such, and the powers of the court under the Insolvency Order shall not be exercised in such a way as to prevent or interfere with— a the settlement in accordance with the rules of a recognised investment exchange or recognised clearing house of a market contract not dealt with under its default rules, or b any action taken under the default rules of such an exchange or clearing house. This does not prevent a relevant office-holder from afterwards seeking to recover any amount under Article 86(3) or 87(3) or prevent the court from afterwards making any such order as is mentioned in Article 88(1) (but subject to paragraphs (2) and (3) of that Article). 3 Nothing in the following provisions of this Part shall be construed as affecting the generality of the above provisions. 4 A debt or other liability arising out of a market contract which is the subject of default proceedings may not be proved in a winding up or bankruptcy until the completion of the default proceedings. A debt or other liability which by virtue of this paragraph may not be proved shall not be taken into account for the purposes of any set-off until the completion of the default proceedings. 4A However, prior to the completion of default proceedings— a where it appears to the chairman of the meeting of creditors that a sum will be certified under Article 85(1) to be payable, paragraph (4) shall not prevent any proof including or consisting of an estimate of that sum which has been lodged from being admitted for the purpose only of determining the entitlement of a creditor to vote at a meeting of creditors; and b a creditor whose proof has been lodged and admitted for the purpose of determining the entitlement of a creditors to vote at a meeting of creditors and which has not been subsequently withdrawn, disallowed or rejected, is eligible as a creditor to be a member of a liquidation committee or, in bankruptcy proceedings, a creditors' committee. 5 For the purposes of paragraphs (4) and (4A) the default proceedings shall be taken to be completed in relation to a person when a report is made under Article 85 stating the sum (if any) certified to be due to or from him. Duty to give assistance for purposes of default proceedings 83 1 It is the duty of— a any person who has or had control of any assets of a defaulter, and b any person who has or had control of any documents of or relating to a defaulter, to give a recognised investment exchange or recognised clearing house such assistance as it may reasonably require for the purposes of its default proceedings. This applies notwithstanding any duty of that person under the statutory provisions relating to insolvency. 2 A person shall not under this Article be required to provide any information or produce any document which he would be entitled to refuse to provide or produce on grounds of legal professional privilege in proceedings in the High Court. 3 Where original documents are supplied in pursuance of this Article, the exchange or clearing house shall return them forthwith after the completion of the relevant default proceedings, and shall in the meantime allow reasonable access to them to the person by whom they were supplied and to any person who would be entitled to have access to them if they were still in the control of the person by whom they were supplied. 4 The expenses of a relevant office-holder in giving assistance under this Article are recoverable as part of the expenses incurred by him in the discharge of his duties; and he shall not be required under this Article to take any action which involves expenses which cannot be so recovered, unless the exchange or clearing house undertakes to meet them and for the purpose of determining the priority in which his expenses are payable out of the assets, sums in respect of time spent shall be treated as his remuneration and other sums shall be treated as his disbursements. There shall be treated as expenses of his such reasonable sums as he may determine in respect of time spent in giving the assistance. 5 The Department may by regulations make further provision as to the duties of persons to give assistance to a recognised investment exchange or recognised clearing house for the purposes of its default proceedings. 6 The Secretary of State may by regulations make further provision as to the duties of an exchange or clearing house with respect to information supplied to it. 7 Regulations under this Article may add to, amend or repeal the provisions of paragraphs (1) to (4). 8 In this Article “document” includes information recorded in any form. Supplementary provisions as to default proceedings 84 1 If the court is satisfied on an application by a relevant office-holder that a party to a market contract with a defaulter intends to dissipate or apply his assets so as to prevent the office-holder recovering such sums as may become due upon the completion of the default proceedings, the court may grant such interlocutory relief as it thinks fit. 2 A liquidator or trustee of a defaulter shall not— a declare or pay any dividend to the creditors, or b return any capital to contributories, unless he has retained what he reasonably considers to be an adequate reserve in respect of any claims arising as a result of the default proceedings of the exchange or clearing house concerned. 3 The court may on an application by a relevant office-holder make such order as it thinks fit altering or dispensing from compliance with such of the duties of his office as are affected by the fact that default proceedings are pending or could be taken, or have been or could have been taken. 4 Nothing in Article 106, 108, 110 or 258 of, or paragraph 43 or 44 (including paragraph 44(5) as applied by paragraph 45) of Schedule B1 to , the Insolvency Order (which restrict the taking of certain legal proceedings and other steps), shall affect any action taken by an exchange or clearing house for the purpose of its default proceedings. Duty to report on completion of default proceedings 85 1 Subject to paragraph (1A), a recognised investment exchange or recognised clearing house shall, on the completion of proceedings under its default rules, report to the Authority on its proceedings stating in respect of each creditor or debtor the sum certified by it to be payable from or to the defaulter or, as the case may be, the fact that no sum is payable. 1A A recognised overseas investment exchange or recognised overseas clearing house shall not be subject to the obligation under paragraph (1) unless it has been notified by the Authority that a report is required for the purpose of insolvency proceedings in any part of the United Kingdom. 2 The exchange or clearing house may make a single report or may make reports from time to time as proceedings are completed with respect to the transactions affecting particular persons. 3 The exchange or clearing house shall supply a copy of every report under this Article to the defaulter and to any relevant office-holder acting in relation to him or his estate. 4 When a report under this Article is received by the Authority, it shall publish notice of that fact in such manner as it thinks appropriate for bringing the report to the attention of creditors and debtors of the defaulter. 5 An exchange or clearing house shall make available for inspection by a creditor or debtor of the defaulter so much of any report by it under this Article as relates to the sum (if any) certified to be due to or from him or to the method by which that sum was determined. 6 Any such person may require the exchange or clearing house, on payment of such reasonable fee as the exchange or clearing house may determine, to provide him with a copy of any part of a report which he is entitled to inspect. Net sum payable on completion of default proceedings 86 1 The following provisions apply with respect to the net sum certified by a recognised investment exchange or recognised clearing house, upon proceedings under its default rules being duly completed in accordance with this Part, to be payable by or to a defaulter. 2 If a bankruptcy or winding-up order has been made, or a resolution for voluntary winding up has been passed, the debt— a is provable in the bankruptcy or winding up or, as the case may be, is payable to the relevant office-holder, and b shall be taken into account, where appropriate, under Article 296 of the Insolvency Order (mutual dealings and set-off) or the corresponding provision applicable in the case of winding up, in the same way as a debt due before the commencement of the bankruptcy, the date on which the body corporate goes into liquidation (within the meaning of Article 6 of the Insolvency Order) or, in the case of a partnership, the date of the winding-up order. 3 However, where (or to the extent that) a sum is taken into account by virtue of paragraph (2)(b) which arises from a contract entered into at a time when the creditor had notice— a that a bankruptcy petition was pending, or b that a meeting of creditors had been summoned under Article 84 of the Insolvency Order 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. 4 Paragraph (3) 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. 5 Any sum recoverable by virtue of paragraph (3) ranks for priority, in the event of the insolvency of the person from whom it is due, immediately before preferential debts. Disclaimer of property, rescission of contracts, &c. 87 1 Articles 152, 157, 288 and 318 of the Insolvency Order (power to disclaim onerous property and court's power to order rescission of contracts, &c.) do not apply in relation to— a a market contract, or b a contract effected by the exchange or clearing house for the purpose of realising property provided as margin in relation to market contracts. 2 Articles 107 and 257 of the Insolvency Order (avoidance of property dispositions effected after commencement of winding up or presentation of bankruptcy petition) do not apply to— a a market contract, or any disposition of property in pursuance of such a contract, b the provision of margin in relation to market contracts, c a contract effected by the exchange or clearing house for the purpose of realising property provided as margin in relation to a market contract, or any disposition of property in pursuance of such a contract, or d any disposition of property in accordance with the rules of the exchange or clearing house as to the application of property provided as margin. 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 of the other party to the contract, or 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. 4 Paragraph (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 paragraph (3)(b) applies in relation to the provision of margin in relation to such a contract. 5 Any sum recoverable by virtue of paragraph (3) ranks for priority, in the event of the involvency of the person from whom it is due, immediately before preferential debts. Adjustment of prior transactions 88 1 No order shall be made in relation to a transaction to which this Article applies under— a Article 202 or 312 of the Insolvency Order (transactions at an undervalue), b Article 203 or 313 of that Order (preferences), or c Article 367 of that Order (transactions defrauding creditors). 2 This Article 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. 3 Where margin is provided in relation to a market contract and (by virtue of paragraph (2)(a) or otherwise) no such order as is mentioned in paragraph (1) has been, or could be, made in relation to that contract, this Article 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. Powers of Secretary of State to give directions 89 1 The powers conferred by this Article are exercisable in relation to a recognised UK investment exchange or recognised UK clearing house. 2 Where in any case an exchange or clearing house has not taken action under its default rules—3832/2—O.I.C.[Companies No. 2 (NI) Order 1990] a if it appears to the Authority that it could take action, the Authority may direct it to do so, and b if it appears to the Authority that it is proposing to take or may take action, the Authority may direct it not to do so. 3 Before giving such a direction the Authority shall consult the exchange or clearing house in question; and it shall not give a direction unless it is satisfied, in the light of that consultation— a in the case of a direction to take action, that failure to take action would involve undue risk to investors or other participants in the market, or b in the case of a direction not to take action, that the taking of action would be premature or otherwise undesirable in the interests of investors or other participants in the market. 4 A direction shall specify the grounds on which it is given. 5 A direction not to take action may be expressed to have effect until the giving of a further direction (which may be a direction to take action or simply revoking the earlier direction). 6 No direction shall be given not to take action if, in relation to the person in question— a a bankruptcy order has been made, or b a winding up order has been made, a resolution for voluntary winding up has been passed or an administrator, administrative receiver or provisional liquidator has been appointed; and any previous direction not to take action shall cease to have effect on the making or passing of any such order, appointment or resolution. 7 Where an exchange or clearing house has taken or been directed to take action under its default rules, the Authority may direct it to do or not to do such things (being things which it has power to do under its default rules) as are specified in the direction. The Authority shall not give such a direction unless it is satisfied that the direction will not impede or frustrate the proper and efficient conduct of the default proceedings. 8 A direction under this Article is enforceable, on the application of the Authority , by injunction; and where an exchange or clearing house has not complied with a direction, the court may make such order as it thinks fit for restoring the position to what it would have been if the direction had been complied with. Application to determine whether default proceedings to be taken 90 1 Where there has been made or passed in relation to a member or designated non-member of a recognised investment exchange or a member of a recognised clearing house— a a bankruptcy order, or b an administration or winding up order, a resolution for voluntary winding up or an order appointing a provisional liquidator, and the exchange or clearing house has not taken action under its default rules in consequence of the order or resolution or the matters giving rise to it, a relevant office-holder appointed by, or in consequence of or in connection with, the order or resolution may apply to the Authority . 1A In paragraph (1) a reference to an administration order shall be taken to include a reference to the appointment of an administrator under— a paragraph 15 of Schedule B1 to the Insolvency Order (appointment by holder of qualifying floating charge), or b paragraph 23 of that Schedule (appointment by company or directors). 2 The application shall specify the exchange or clearing house concerned and the grounds on which it is made. 3 On receipt of the application the Authority shall notify the exchange or clearing house, and unless within three business days after the day on which the notice is received the exchange or clearing house— a takes action under its default rules, or b notifies the Authority that it proposes to do so forthwith, then, subject as follows, the provisions of Articles 81 to 88 do not apply in relation to market contracts to which the member or designated non-member in question is a party or to anything done by the exchange or clearing house for the purposes of, or in connection with, the settlement of any such contract. For this purpose a “business day” means any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971 . 4 The provisions of Articles 81 to 88 are not disapplied if before the end of the period mentioned in paragraph (3) the Authority gives the exchange or clearing house a direction under Article 89(2)(a) (direction to take action under default rules). No such direction may be given after the end of that period. 5 If the exchange or clearing house notifies the Authority that it proposes to take action under its default rules forthwith, it shall do so; and that duty is enforceable, on the application of the Authority , by injunction. Art. 91 rep. by SI 2001/3649 Other exchanges and clearing houses Certain overseas exchanges and clearing houses 92 1 The Department and the Treasury may by regulations provide that this Part applies in relation to contracts connected with an overseas investment exchange or clearing house which is approved by the the Treasury under section 170 of the Companies Act 1989 (certain overseas exchanges and clearing houses), as it applies in relation to contracts connected with a recognised investment exchange or clearing house. 2 The Department may make regulations which, in relation to a body which is so approved, provide that the provisions of this Part apply with such exceptions, additions and adaptations as appear to the Department to be necessary or expedient. Art. 93 rep. by SI 2001/3649 Settlement arrangements provided by the Bank of England 94 1 The Department may by regulations provide that this Part applies to contracts to which Part VII of the Companies Act 1989 applies by virtue of regulations made under section 172(1) of that Act (settlement arrangements provided by the Bank of England), as it applies to contracts connected with a recognised investment exchange or recognised clearing house. 2 Regulations under this Article may provide that the provisions of this Part apply with such exceptions, additions and adaptations as appear to the Department to be necessary or expedient. 3 Before making any regulations under this Article, the Department shall consult the Treasury and the Bank of England. Market charges Market charges 95 1 In this Part “market charge” means a charge, whether fixed or floating, granted— a in favour of a recognised investment exchange, for the purpose of securing debts or liabilities arising in connection with the settlement of market contracts, aa in favour of The Stock Exchange, for the purpose of securing debts or liabilities arising in connection with short term certificates; b in favour of a recognised clearing house, for the purpose of securing debts or liabilities arising in connection with their ensuring the performance of market contracts, or c in favour of a person who agrees to make payments as a result of the transfer or allotment of specified securities made through the medium of a computer-based system established by the Bank of England and The Stock Exchange, for the purpose of securing debts or liabilities of the transferee or allottee arising in connection therewith. 2 Where a charge is granted partly for purposes specified in paragraph (1)(a), (aa), (b) or (c) and partly for other purposes, it is a “market charge” so far as it has effect for the specified purposes. 3 [ In paragraph (1)— “short term certificate” means an instrument issued by The Stock Exchange undertaking to procure the transfer of property of a value and description specified in the instrument to or to the order of the person to whom the instrument is issued or his endorsee or to a person acting on behalf of either of them and also undertaking to make appropriate payment in cash, in the event that the obligation to procure the transfer of property cannot be discharged in whole or in part; “specified securities” means securities for the time being specified in the list in Schedule 1 to the Stock Exchange Transfer Act 1982, and includes any right to such securities; and “transfer”, in relation to any such securities or right, means a transfer of the beneficial interest. 4 The Department may by regulations make further provision as to the charges granted in favour of any such person as is mentioned in paragraph (1)(a), (b) or (c) which are to be treated as “market charges” for the purposes of this Part; and the regulations may add to, amend or repeal the provisions of paragraphs (1) to (3). 5 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. 6 Before making regulations under this Article in relation to charges granted in favour of a person within paragraph (1)(c), the Department shall consult the Treasury and the Bank of England. Modifications of the law of insolvency 96 1 The general law of insolvency has effect in relation to market charges and action taken in enforcing them subject to the provisions of Article 97. 2 The Department may by regulations make further provision modifying the law of insolvency in relation to the matters mentioned in paragraph (1). 3 The regulations may add to, amend or repeal the provisions mentioned in paragraph (1), and any other provision of this Part as it applies for the purposes of those provisions, or provide that those provisions have effect with such exceptions, additions or adaptations as are specified in the regulations. 4 The regulations may make different provision for cases defined by reference to the nature of the charge, the nature of the property subject to it, the circumstances, nature or extent of the obligations secured by it or any other relevant factor. 5 Before making regulations under this Article in relation to charges granted in favour of a person within Article 95(1)(c), the Department shall consult the Treasury and the Bank of England. Administration orders, etc. 97 1 The following provisions of Schedule B1 to the Insolvency Order (administration) do not apply in relation to a market charge— a paragraph 44(2) and (3) (restriction on enforcement of security or repossession of goods) (including that provision as applied by paragraph 45 (interim moratorium)), and b paragraphs 71, 72 and 73 (power of administrator to deal with charged or hire-purchase property). 1A Paragraph 42(2) of that Schedule (receiver to vacate office at request of administrator) does not apply to a receiver appointed under a market charge. 2 However, where a market charge falls to be enforced after the occurrence of an event to which paragraph (2A) applies , and there exists another charge over some or all of the same property ranking in priority to or pari passu with the market charge, on the application of any person interested 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. 2A This paragraph applies to— a making an administration application under paragraph 13 of Schedule B1 to the Insolvency Order, b appointing an administrator under paragraph 15 or 23 of that Schedule (appointment by floating charge holder, company or directors), c filing with the Court a copy of notice of intention to appoint an administrator under either of those paragraphs. 3 Article 53 of the Insolvency Order (power of administrative receiver to dispose of charged property) does not apply in relation to a market charge. 4 Articles 107 and 257 of the Insolvency Order (avoidance of property dispositions effected after commencement of winding up or presentation of bankruptcy petition) 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 paragraph (4) has notice at the time of the disposition that a petition has been presented for the winding up or bankruptcy 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. 6 Any sum recoverable by virtue of paragraph (5) ranks for priority, in the event of the insolvency of the person from whom it is due, immediately before preferential debts. 7 In a case falling within both paragraph (4) (as a disposition of property as a result of which the property becomes subject to a market charge) and Article 87(2) (as the provision of margin in relation to a market contract), Article 87(3) applies with respect to the recovery of the amount or value of the margin and paragraph (5) does not apply. Power to make provision about certain other charges 98 1 The Department may by regulations provide that the general law of insolvency has effect in relation to charges of such descriptions as may be specified in the regulations, and action taken in enforcing them, subject to such provisions as may be specified in the regulations. 2 The regulations may specify any description of charge granted in favour of— a a body approved by the Secretary of State under section 170 of the Companies Act 1989 (certain overseas exchanges and clearing houses), b a person included in the list maintained by the . . . Authority for the purposes of section 301 of the Financial Services and Markets Act 2000 of that Act (certain money market institutions), c the Bank of England, d a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a relevant regulated activity, or e an international securities self-regulating organisation approved for the purposes of an order made under section 22 of the Financial Services and Markets Act 2000, 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. 3 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 paragraph (2). 4 Where a charge is granted partly for the purpose specified in paragraph (2) and partly for other purposes, the power conferred by this Article is exercisable in relation to the charge so far as it has effect for that purpose. 5 The regulations may— a make the same or similar provision in relation to the charges to which they apply as is made by or under Articles 96 and 97 in relation to market charges, or b apply any of those provisions with such exceptions, additions or adaptations as are specified in the regulations. 6 Before making regulations under this Article relating to a description of charges defined by reference to their being granted in favour of a person included in the list maintained by the . . . Authority for the purposes of section 301 of the Financial Services and Markets Act 2000 of the Companies Act 1989, or in connection with exchange facilities or clearing services provided by a person included in that list, the department shall consult the Treasury, the Authority and the Bank of England. 6A Before making regulations under this Article relating to a description of charges defined by reference to their being granted in favour of the Bank of England, or in connection with settlement arrangements provided by the Bank, the Department shall consult the Treasury and the Bank. 7 Regulations under this Article 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. 8 For the purposes of subsection (2)(d), “relevant regulated activity” means— a dealing in investments as principal or as agent; b arranging deals in investments; c managing investments; d safeguarding and administering investments; e sending dematerialised instructions; ... ea managing a UCITS ; eb acting as trustee or depositary of a UCITS ; ec managing an AIF ; ed acting as trustee or depositary of an AIF ; or f establishing etc. a collective investment scheme. 9 Paragraph (8) must be read with— a section 22 of the Financial Services and Markets Act 2000; b any relevant order under that section; and c Schedule 2 to that Act. Market property Application of margin not affected by certain other interests 99 1 The following provisions have effect with respect to the application by a recognised investment exchange or recognised clearing house of property (other than land) held by the exchange or clearing house as margin in relation to a market contract. 2 So far as necessary to enable the property to be applied in accordance with the rules of the exchange or clearing house, it may be so applied notwithstanding any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the exchange or clearing house had notice of the interest, right or breach of duty at the time the property was provided as margin. 3 No right or remedy arising subsequently to the property being provided as margin may be enforced so as to prevent or interfere with the application of the property by the exchange or clearing house in accordance with its rules. 4 Where an exchange or clearing house has power by virtue of the above provisions to apply property notwithstanding an interest, right or remedy, a person to whom the exchange or clearing house disposes of the property in accordance with its rules takes free from that interest, right or remedy. Priority of floating market charge over subsequent charges 100 1 The Department may by regulations provide that a market charge which is a floating charge has priority over a charge subsequently created or arising, including a fixed charge. 2 The regulations may make different provision for cases defined, as regards the market charge or the subsequent charge, by reference to the description of charge, its terms, the circumstances in which it is created or arises, the nature of the charge, the person in favour of whom it is granted or arises or any other relevant factor. Priority of market charge over unpaid vendor's lien 101 Where property subject to an unpaid vendor's lien becomes subject to a market charge, the charge has priority over the lien unless the chargee had actual notice of the lien at the time the property became subject to the charge. Proceedings against market property by unsecured creditors 102 1 Where property (other than land) is held by a recognised investment exchange or recognised clearing house as margin in relation to market contracts or is subject to a market charge, no execution or other legal process for the enforcement of a judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in or security over the property, except with the consent of— a in the case of property provided as cover for margin, the investment exchange or clearing house in question, or b in the case of property subject to a market charge, the person in whose favour the charge was granted. 2 Where consent is given the proceedings may be commenced or continued notwithstanding any provision of the Insolvency Order. 3 Where by virtue of this Article a person would not be entitled to enforce a judgment or order against any property, any injunction or other remedy granted with a view to facilitating the enforcement of any such judgment or order shall not extend to that property. Power to apply provisions to other cases 103 1 The power of the Department to make provision by regulations under— a Article 92, . . . or 94 (power to extend provisions relating to market contracts), or b Article 98 (power to extend provisions relating to market charges), includes power to apply Articles 99 to 102 to any description of property provided as cover for margin in relation to contracts in relation to which the power is exercised or, as the case may be, property subject to charges in relation to which the power is exercised. 2 The regulations may provide that those Articles apply with such exceptions, additions and adaptations as may be specified in the regulations. Supplementary provisions Insolvency proceedings in other jurisdictions 104 1 The references to insolvency law in section 426 of the Insolvency Act 1986 (co-operation with courts exercising insolvency jurisdiction in other jurisdictions) include, in relation to a part of the United Kingdom, the provisions made by or under this Part and, in relation to a relevant country or territory within the meaning of that section, so much of the law of that country or territory as corresponds to any provisions made by or under this Part. 2 A court shall not, in pursuance of that section or any other statutory provision or rule of law, recognise or give effect to— a any order of a court exercising jurisdiction in relation to involvency law in a country or territory outside the United Kingdom, or b any act of a person appointed in such a country or territory to discharge any functions under insolvency law, in so far as the making of the order or the doing of the act would be prohibited in the case of a court in Northern Ireland or a relevant office-holder by provisions made by or under this Part. 3 Paragraph (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 .... Indemnity for certain acts, &c. 105 1 Where a relevant office-holder takes any action in relation to property of a defaulter which is liable to be dealt with in accordance with the default rules of a recognised investment exchange or recognised clearing house, and believes and has reasonable grounds for believing that he is entitled to take that action, he is not liable to any person in respect of any loss or damage resulting from his action except in so far as the loss or damage is caused by the office-holder's own negligence. 2 Any failure by a recognised investment exchange or recognised clearing house to comply with its own rules in respect of any matter shall not prevent that matter being treated for the purposes of this Part as done in accordance with those rules so long as the failure does not substantially affect the rights of any person entitled to require compliance with the rules. 3 No recognised investment exchange or recognised clearing house, nor any officer or servant or member of the governing body of a recognised investment exchange or recognised clearing house, shall be liable in damages for anything done or omitted in the discharge or purported discharge of any functions to which this paragraph applies unless the act or omission is shown to have been in bad faith. 4 The functions to which paragraph (3) applies are the functions of the exchange or clearing house so far as relating to, or to matters arising out of— a its default rules, or b any obligations to which it is subject by virtue of this Part. 5 No person to whom the exercise of any function of a recognised investment exchange or recognised clearing house is delegated under its default rules ), nor any officer or servant of such a person, shall be liable in damages for anything done or omitted in the discharge or purported discharge of those functions unless the act or omission is shown to have been in bad faith. Power to make further provision by regulations 106 1 The Department may by regulations make such further provision as appears to it necessary or expedient for the purposes of this Part and, in particular but without prejudice to the generality of the foregoing, for integrating the provisions of this Part with the general law of insolvency. 2 The Secretary of State may by regulations make such further provision as appears to him necessary or expedient for the purposes of this Part. 3 Regulations under this Article may add to, amend or repeal any of the provisions of this Part or provide that those provisions have effect subject to such additions, exceptions or adaptations as are specified in the regulations. 4 References in paragraph (2) to the provisions of this Part include any provision made under section 301 of the Financial Services and Markets Act 2000. Supplementary provisions as to regulations 107 1 Regulations under this Part may contain such incidental, transitional and other supplementary provisions as appear to the Department, or as the case may be, to the Secretary of State to be necessary or expedient. 2 Regulations made by the Department under this Part shall be subject to negative resolution. 3 Regulations made by the Secretary of State under this Part shall be subject to annulment in pursuance of a resolution of either House of Parliament in like manner as a statutory instrument and section 5 of the Statutory Instruments Act 1946 shall apply accordingly. Construction of references to parties to market contracts 108 1 Where a person enters into market contracts in more than one capacity, the provisions of this Part apply (subject as follows) as if the contracts entered into in each different capacity were entered into by different persons. 2 References in this Part to a market contract to which a person is a party include (subject as follows, and unless the context otherwise requires) contracts to which he is party as agent. 3 The Secretary of State may by regulations— a modify or exclude the operation of paragraphs (1) and (2), and b make provision as to the circumstances in which a person is to be regarded for the purposes of those provisions as acting in different capacities. Meaning of “default rules” and related expressions 109 1 In this Part “default rules” means rules of a recognised investment exchange or recognised clearing house which provide for the taking of action in the event of a person appearing to be unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the exchange or clearing house. 2 References in this Part to a “defaulter” are to a person inrespect of whom action has been taken by a recognised investment exchange or recognised clearing house under its default rules, whether by declaring him to be a defaulter or otherwise; and references in this Part to “default” shall be construed accordingly. 3 In this Part “default proceedings” means proceedings taken by a recognised investment exchange or recognised clearing house under its default rules. 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. Meaning of “relevant office-holder” 110 1 The following are relevant office-holders for the purposes of this Part— a the official receiver, b any person acting in relation to a company as its liquidator, provisional liquidator, administrator or administrative receiver, c any person acting in relation to an individual as his trustee in bankruptcy, d any person acting as administrator of an insolvent estate of a deceased person. 2 In paragraph (1)(b) “company” means any company, society, association, partnership or other body which may be wound up under the Insolvency Order. Minor definitions 111 1 In this Part— “administrative receiver” has the meaning given by Article 5(1) of the Insolvency Order; “the Authority” means the Financial Services Authority; “charge” means any form of security, including a mortgage; Definitions rep. by SI 2001/3649 “overseas”, in relation to an investment exchange or clearing house, means having its head office outside the United Kingdom; “recognised clearing house” and “recoginised investment exchange” have the same meaning as in the Financial Services and Markets Act 2000; Definition rep. by SI 2001/3649 “The Stock Exchange” means the London Stock Exchange Limited; “UK”, in relation to an investment exchange or clearing house, means having its head office in the United Kingdom. 2 References in this Part to settlement in relation to a market contract are to the discharge of the rights and liabilities of the parties to the contract, whether by performance, compromise or otherwise. 3 In this Part the expressions “margin” and “cover for margin” have the same meaning. Para. (4) rep. by SI 2001/3649 5 For the purposes of this Part a person shall be taken to have notice of a matter if he deliberately failed to make enquiries as to that matter in circumstances in which a reasonable and honest person would have done so. This does not apply for the purposes of a provision requiring “actual notice”. 6 References in this Part to the law of insolvency include references to every provision made by or under the Insolvency Order, and in relation to a building society references to insolvency law or to any provision of the Insolvency Order are to that law or provision as modified by the Building Societies Act 1986 . Index of defined expressions 112 The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used only in the same Article or paragraph)— administrative receiver Article 111(1) the Authority Article 111(1) charge Article 111(1) . . . . . . cover for margin Article 111(3) default rules (and related expressions) Article 109 designated non-member Article 80(2) . . . . . . insolvency law (and similar expressions) Article 111(6) . . . . . . . . . . . . margin Article 111(3) market charge Article 95 market contract Article 80 notice Article 111(5) overseas (in relation to an investment exchange or clearing house) Article 111(1) party (in relation to a market contract) Article 108 . . . . . . recognised clearing house and recognised investment exchange Article 111(1) relevant office-holder Article 110 settlement and related expressions (in relation to a market contract) Article 111(2) The Stock Exchange Article 111(1) UK (in relation to an investment exchange or clearing house) Article 111(1) PART VI REPEALS Article 113—Repeals