{
  "url": "https://openlegislation.uk/financial-markets-and-insolvency-settlement-finality-regulations-1999/regulation-14",
  "json_url": "https://openlegislation.uk/financial-markets-and-insolvency-settlement-finality-regulations-1999/regulation-14.json",
  "legislation": "uksi/1999/2979",
  "legislation_title": "The Financial Markets and Insolvency (Settlement Finality) Regulations 1999",
  "legislation_url": "https://openlegislation.uk/financial-markets-and-insolvency-settlement-finality-regulations-1999",
  "path": "regulation/14",
  "kind": "regulation",
  "number": "14",
  "heading": "Proceedings of designated system take precedence over insolvency proceedings",
  "text": "(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, winding up, administration, sequestration or under a protected trust deed, or in the administration of an insolvent estate or with the law relating to other insolvency proceedings of a country or territory outside the United Kingdom—\n(a) a transfer order;\n(b) the default arrangements of a designated system;\n(c) the rules of a designated system as to the settlement of transfer orders not dealt with under its default arrangements;\n(d) a contract for the purpose of realising collateral security in connection with participation in a designated system or in a system which is an interoperable system in relation to that designated system otherwise than pursuant to its default arrangements; or\n(e) a contract for the purpose of realising collateral security in connection with the functions of a central bank.\n(2) The powers of a relevant office-holder in his capacity as such, and the powers of the court under the Insolvency Act 1986 , the Insolvency (Northern Ireland) Order 1989 or the Bankruptcy (Scotland) Act 1985, shall not be exercised in such a way as to prevent or interfere with—\n(a) the settlement in accordance with the rules of a designated system of a transfer order not dealt with under its default arrangements;\n(b) any action taken under the default arrangements of a designated system;\n(c) any action taken to realise collateral security in connection with participation in a designated system or in a system which is an interoperable system in relation to that designated system otherwise than pursuant to its default arrangements; or\n(d) any action taken to realise collateral security in connection with the functions of a central bank.\n....\n(3) Nothing in the following provisions of this Part shall be construed as affecting the generality of the above provisions.\n(4) A debt or other liability arising out of a transfer order which is the subject of action taken under default arrangements may not be proved in a winding up , bankruptcy, or administration,, or in Scotland claimed in a winding up, sequestration or under a protected trust deed, until the completion of the action taken under default arrangements.\nA debt or other liability which by virtue of this paragraph may not be proved or claimed shall not be taken into account for the purposes of any set-off until the completion of the action taken under default arrangements.\n(5) Paragraph (1) has the effect that the following provisions (which relate to preferential debts and the payment of expenses etc) apply subject to paragraph (6), namely—\n(a) in the case of collateral security provided by a company (within the meaning of section 1 of the Companies Act 2006) or by a building society (within the meaning of section 119 of the Building Societies Act 1986))—\n(i) sections 174A, 175, 176ZA and 176A of, and paragraphs 64A and 65(2) of Schedule B1 to, the Insolvency Act 1986 or Articles 148A 149, 150ZA, and 150A of, and paragraphs 65A and 66(2) of Schedule B1 to, the Insolvency (Northern Ireland) Order 1989;\n(ii) rules 6.42(2)(b) and 7.38(3) of the Insolvency (England and Wales) Rules 2016, Rules 4.033(3) and 4.228(2)(b) of the Insolvency Rules (Northern Ireland) 1991 and rule 5.9(4) of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018;\n(iii) section 40 (or in Scotland, section 59 and 60(1)(e)) of the Insolvency Act 1986, paragraph 99(3) of Schedule B1 to that Act and section 19(4) of that Act as that section has effect by virtue of section 249(1) of the Enterprise Act 2002;\n(iv) paragraph 100(3) of Schedule B1 to the Insolvency (Northern Ireland) Order 1989, Article 31(4) of that Order, as it has effect by virtue of Article 4(1) of the Insolvency (Northern Ireland) Order 2005, and Article 50 of the Insolvency (Northern Ireland) Order 1989; and\n(v) section 754 of the Companies Act 2006 (including that section as applied or modified by any enactment made under the Banking Act 2009); and\n(b) in the case of collateral security provided by an individual, section 328(1) and (2) of the Insolvency Act 1986 or, in Northern Ireland, Article 300(1) and (2) of the Insolvency (Northern Ireland) Order 1989 or, in Scotland, in the case of collateral security provided by an individual or a partnership, section 51 of the Bankruptcy (Scotland) Act 1985 and any like provision or rule of law affecting a protected trust deed.\n(6) The claim of a participant , system operator or central bank to collateral security shall be paid in priority to—\n(a) the expenses of the winding up mentioned in sections 115 and 156 of the Insolvency Act 1986 or Articles 100 and 134 of the Insolvency (Northern Ireland) Order 1989, the expenses of the bankruptcy within the meaning of that Act or that Order or, as the case may be, the remuneration and expenses of the administrator mentioned in paragraph 99(3) of Schedule B1 to that Act and in section 19(4) of that Act as that section has effect by virtue of section 249(1) of the Enterprise Act 2002 or in paragraph 100(3) to Schedule B1 to that Order and Article 31(4) of that Order, as that Article has effect by virtue of Article 4(1) of the Insolvency (Northern Ireland) Order 2005, and\n(b) the preferential debts of the company or the individual (as the case may be) within the meaning given by section 386 of that Act or Article 346 of that Order, and\n(c) the debts or liabilities arising or incurred under contracts mentioned in—\n(i) paragraph 99(4) of Schedule B1 to the Insolvency Act 1986 and section 19(5) of that Act, as that section has effect by virtue of section 249(1) of the Enterprise Act 2002, or\n(ii) paragraph 100(4) of Schedule B1 to, the Insolvency (Northern Ireland) Order 1989 and Article 31(5) of that Order as that article has effect by virtue of Article 4(1) of the Insolvency (Northern Ireland) Order 2005,\nunless the terms on which the collateral security was provided expressly provide that such expenses, remuneration or preferential debts are to have priority.\n(7) As respects Scotland—\n(a) the reference in paragraph (6)(a) to the expenses of bankruptcy shall be taken to be a reference to the matters mentioned in paragraphs (a) to (d) of section 51(1) of the Bankruptcy (Scotland) Act 1985, or any like provision or rule of law affecting a protected trust deed; and\n(b) the reference in paragraph (6)(b) to the preferential debts of the individual shall be taken to be a reference to the preferred debts of the debtor within the meaning of the Bankruptcy (Scotland) Act 1985, or any like definition applying with respect to a protected trust deed by virtue of any provision or rule of law affecting it.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Word in reg. 14(1) inserted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(a)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "Words in reg. 14(1) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(a) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Words in reg. 14(1)(d) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(b) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "Words in reg. 14(2) inserted (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), regs. 1, 2(6)(a)"
    },
    {
      "type": "F",
      "label": "F5",
      "text": "Words in reg. 14(2)(b) substituted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(c) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F6",
      "text": "Words in reg. 14(2)(c) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(d) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F7",
      "text": "Words in reg. 14(2) omitted (1.10.2009) by virtue of The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(b)"
    },
    {
      "type": "F",
      "label": "F8",
      "text": "Words in reg. 14(4) substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(c)"
    },
    {
      "type": "F",
      "label": "F9",
      "text": "Words in reg. 14(5)(a) substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(d)(i)"
    },
    {
      "type": "F",
      "label": "F10",
      "text": "Reg. 14(5)(a)(i)(ii) substituted for reg. 14(5)(a)(i) (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(d)(ii)"
    },
    {
      "type": "F",
      "label": "F11",
      "text": "Word in reg. 14(5)(a)(i) inserted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 14(2)(a)"
    },
    {
      "type": "F",
      "label": "F12",
      "text": "Words in reg. 14(5)(a)(i) substituted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 14(2)(b)"
    },
    {
      "type": "F",
      "label": "F13",
      "text": "Word in reg. 14(5)(a)(i) inserted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 14(2)(c)"
    },
    {
      "type": "F",
      "label": "F14",
      "text": "Words in reg. 14(5)(a)(i) substituted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 14(2)(d)"
    },
    {
      "type": "F",
      "label": "F15",
      "text": "Words in reg. 14(5)(a)(ii) substituted (23.4.2019) by The Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019 (S.I. 2019/755), regs. 1, 2(2)(a)"
    },
    {
      "type": "F",
      "label": "F16",
      "text": "Words in reg. 14(5)(a)(ii) substituted (23.4.2019) by The Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019 (S.I. 2019/755), regs. 1, 2(2)(b)"
    },
    {
      "type": "F",
      "label": "F17",
      "text": "Reg. 14(5)(a)(iii)-(v) substituted for reg. 14(5)(a)(ii) (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(d)(iii)"
    },
    {
      "type": "F",
      "label": "F18",
      "text": "Reg. 14(5)(a)(iv) substituted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(e) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F19",
      "text": "Words in reg. 14(5)(a)(v) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(f) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F20",
      "text": "Words in reg. 14(5)(b) inserted (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), regs. 1, 2(6)(e)"
    },
    {
      "type": "F",
      "label": "F21",
      "text": "Words in reg. 14(6) inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), regs. 1, 2(11)(g) (with reg. 3)"
    },
    {
      "type": "F",
      "label": "F22",
      "text": "Words in reg. 14(6)(a) inserted (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), regs. 1, 2(6)(f)"
    },
    {
      "type": "F",
      "label": "F23",
      "text": "Words in reg. 14(6)(a) substituted (15.9.2003) by The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096), art. 1(1), Sch. para. 75(b) (with art. 6)"
    },
    {
      "type": "F",
      "label": "F24",
      "text": "Words in reg. 14(6)(a) inserted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(e)(i)(aa)"
    },
    {
      "type": "F",
      "label": "F25",
      "text": "Words in reg. 14(6)(a) substituted (6.4.2007) by The Financial Markets and Insolvency (Settlement Finality)(Amendment) Regulations 2007 (S.I. 2007/832), regs. 1, 2(3)"
    },
    {
      "type": "F",
      "label": "F26",
      "text": "Words in reg. 14(6)(a) inserted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(e)(i)(bb)"
    },
    {
      "type": "F",
      "label": "F27",
      "text": "Words in reg. 14(6)(b) inserted (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), regs. 1, 2(6)(g)"
    },
    {
      "type": "F",
      "label": "F28",
      "text": "Reg. 14(6)(c) and word inserted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), regs. 1, 4(e)(ii)"
    },
    {
      "type": "footnote",
      "label": "f1",
      "text": "1986 c. 45."
    },
    {
      "type": "footnote",
      "label": "f2",
      "text": "1985 c. 66."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1999/2979/regulation/14",
    "retrieved_at": "2026-10-29T09:36:14.649792+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}