Explanatory note

The Order brings sections 171, 176 and 181 of the Companies Act 1989 (“the 1989 Act”) into force on 4th July 1995.

Section 171 enables the Treasury and the Secretary of State, acting jointly, to make regulations which provide that the provisions of Part VII of the 1989 Act applicable to contracts connected with a body that is a recognised investment exchange or a recognised clearing house under the Financial Services Act 1986 (c. 60) apply to contracts of any specified description in relation to which settlement arrangements are provided by a person for the time being included in a list maintained by the Bank of England for the purposes of section 171.

Section 176 enables the Treasury and the Secretary of State, acting jointly, to make regulations which provide that the general law of insolvency has effect in relation to charges of any description specified in the regulations granted in favour of a person included in the list maintained by the Bank of England under section 171 of the 1989 Act, and in relation to any action taken in enforcing such charges, subject to such provisions as may be specified in the regulations.

Section 181 has the effect that the power to make regulations under sections 171 and 176 of the 1989 Act includes power to apply sections 177 to 179 of that Act (which concern the rights and remedies exercisable in relation to property provided as cover for margin or as security for a charge in connection with contracts connected with a recognised investment exchange or a recognised clearing house) to any contract in relation which the power conferred by section 171 is exercised and to the property subject to any charge in relation to which the power conferred by section 176 is exercised.