# The Investment Bank Special Administration Regulations 2011, Regulation 10D: Restrictions on partial property transfers—set-off and netting arrangements


(1) A partial property transfer may not provide for the transfer of some, but not all, of the protected rights and liabilities between a client or other person (“C”) and the investment bank.
(2) Rights and liabilities between C and the investment bank are protected if—
(a) they are rights and liabilities which C or the investment bank is entitled to set off or net under a particular set-off arrangement, netting arrangement or title transfer financial collateral arrangement which C has entered into with the investment bank; and
(b) they are not excluded rights or excluded liabilities.
(3) For the purpose of paragraph (1), a partial property transfer which purports to transfer all of the protected rights and liabilities between C and the investment bank is to be treated as having done so effectively (and not in contravention of paragraph (1)) notwithstanding the possibility that any of the protected rights or liabilities are foreign property and might not have been effectively transferred by the arrangement.
(4) For the purposes of paragraph (2), it is immaterial whether or not—
(a) the arrangement which permits C or the investment bank to set off or net rights and liabilities also permits C or the investment bank to set off or net rights and liabilities with another person; or
(b) the right of C or the investment bank to set off or net is exercisable only on the occurrence of a particular event.
(5) A partial property transfer made in contravention of this regulation does not affect the exercise of the right to set off or net.
(6) In this regulation—
“excluded rights”, in relation to rights between C and the investment bank, has the same meaning as it has in relation to rights between C and a banking institution by virtue of articles 1(3) and 3 of the Banking Act 2009 (Restriction of Partial Property Transfers) Order 2009, except that in article 1(3), in the definition of “excluded rights”—
(a)in sub-paragraph (e) the reference to subordinated debt is to be read as a reference to subordinated debt issued by C or by the investment bank; and
(b)in sub-paragraph (f)—
(i)the reference to a set-off arrangement, netting arrangement or title transfer financial collateral arrangement is to be read as a reference to a set-off arrangement, netting arrangement or title transfer financial collateral arrangement referred to in this regulation; and
(ii)the references to transferable securities are to be read as references to transferable securities issued by C or by the investment bank;
“excluded liabilities” means the liabilities which correspond with excluded rights;
“netting arrangement” means an arrangement under which a number of claims or obligations can be converted into a net claim or obligation and includes, in particular—
(a)a “close-out” netting arrangement, under which actual or theoretical debts are calculated during the course of a contract for the purpose of enabling them to be set off against each other or to be converted into a net debt;
(b)an arrangement which provides for netting (within the meaning given by regulation 2(1) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999); and
(c)an arrangement which includes a close-out netting provision (within the meaning given by regulation 3(1) of the Financial Collateral Arrangements (No 2) Regulations 2003);
“partial property transfer” has the same meaning as in regulation 10B(13);
“set-off arrangement” means an arrangement under which two or more debts, claims or obligations can be set off against each other; and
“title transfer financial collateral arrangement” has the meaning given by regulation 3(1) of the Financial Collateral Arrangements (No 2) Regulations 2003.

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Source: https://www.legislation.gov.uk/uksi/2011/245/regulation/10D (the official version)
Page: https://openlegislation.uk/investment-bank-special-administration-regulations-2011/regulation-10D
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.