Paragraph 15T F1

(1)

Paragraph 15U also applies if—

(a)

the bank levy is charged as provided for by paragraph 5 (entities which are not members of groups),

(b)

the relevant entity (“M”) is a UK resident entity,

(c)

M has liabilities to another entity (“M’s liabilities”),

(d)

M recognises, as assets, amounts due from that other entity (“N”) to M (“N’s liabilities”),

(e)

there is in place an agreement between M and N which makes net settlement provision, and

(f)

that provision is legally effective and enforceable.

(2)

In sub-paragraph (1)(e), “net settlement provision” means provision for there to be a single net settlement—

(a)

if a netting event occurs, or

(b)

at the option of M or N, if a netting event occurs.

(3)

The reference in sub-paragraph (2) to a “single net settlement” is a reference to a single net settlement of—

(a)

all M’s liabilities (so far as covered by the provision mentioned in sub-paragraph (1)(e)), and

(b)

all N’s liabilities (so far as covered by that provision).

(4)

But a provision for there to be single net settlement—

(a)

at the option of M, but not at the option of N, if a netting event occurs, or

(b)

at the option of N, but not at the option of M, if a netting event occurs,

is not to be treated as a net settlement provision for the purposes of sub-paragraph (1)(e).

(5)

For the purposes of sub-paragraph (1)—

(a)

“agreement” includes an agreement which forms part of a multi-lateral agreement, arrangement or trading facility,

(b)

references to amounts due from N include securities provided by M to N as collateral, but only where M recognises those securities in its balance sheet or statement of financial position, and

(c)

“a netting event occurs”—

(i)

in relation to M, if the insolvency or bankruptcy of M gives rise to the termination of any arrangements under which any liability covered by the provision mentioned in sub-paragraph (1)(e) arises, or

(ii)

in relation to N, if the insolvency or bankruptcy of N gives rise to the termination of any arrangements under which such a liability arises.

Annotations

Textual amendments

F1: Sch. 19 paras. 15-15Z5 and cross-headings substituted for Sch. 19 paras. 15-23 (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 2