Document ID: chunk:federal_register_of_legislation:C2025C00185:section:839a
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 839A
Character Range: 3318952–3321394

839A  Partial transfer of netting contracts void
 (1) This section applies if:
 (a) a certificate issued under section 838A for a partial transfer of business comes into force; and
 (b) just before the partial transfer, the target body is a party to:
 (i) a close‑out netting contract (within the meaning of the Payment Systems and Netting Act 1998); or
 (ii) a security given over financial property (within the meaning of that Act), in respect of an obligation of the target body under a close‑out netting contract; or
 (iii) a market netting contract (within the meaning of that Act); or
 (iv) a security given over property, in respect of an obligation of the target body under a market netting contract; or
 (v) an approved netting arrangement (within the meaning of that Act); and
 (c) the partial transfer covers some (but not all) of the following assets and liabilities:
 (i) 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);
 (ii) those assets that are property over which security is given in respect of an obligation of the target body under the close‑out netting contract or the market netting contract.
Note: 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.
 (2) The partial transfer is void:
 (a) to the extent of the assets or liabilities the target 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
 (b) if security is given over financial property (within the meaning of the Payment Systems and Netting Act 1998) in respect of an obligation of the target 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:
 (i) the counterparty;
 (ii) another person (who is not the target body) on behalf of the counterparty, under the terms of an arrangement evidenced in writing; and
 (c) if security is given over property in respect of an obligation of the target body under a market netting contract—to the extent that the assets are that property.