# The Financial Collateral Arrangements (No.2) Regulations 2003, Regulation 18: Duty to value collateral and account for any difference in value on appropriation


(1) Where a collateral-taker exercises a power contained in a security financial collateral arrangement to appropriate the financial collateral the collateral-taker must value the financial collateral in accordance with the terms of the arrangement and in any event in a commercially reasonable manner.
(2) Where a collateral-taker exercises such a power and the value of the financial collateral appropriated differs from the amount of the relevant financial obligations, then as the case may be, either—
(a) the collateral-taker must account to the collateral-provider for the amount by which the value of the financial collateral exceeds the relevant financial obligations; or
(b) the collateral-provider will remain liable to the collateral-taker for any amount whereby the value of the financial collateral is less than the relevant financial obligations.

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Source: https://www.legislation.gov.uk/uksi/2003/3226/regulation/18 (the official version)
Page: https://openlegislation.uk/financial-collateral-arrangements-no2-regulations-2003/regulation-18
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.