The Financial Markets and Insolvency (Settlement Finality) Regulations 1999

Regulation 4(1)

SCHEDULEREQUIREMENTS FOR DESIGNATION OF SYSTEM

Establishment, participation and governing law

1.—(1) The head office of at least one of the participants in the system must be in Great Britain and the law of England and Wales or Scotland must be the governing law of the system.

(2) There must be not less than three institutions participating in the system, unless otherwise determined by the designating authority in any case where—

(a)there are two institutions participating in a system; and

(b)the designating authority considers that designation is required on the grounds of systemic risk.

(3) The system must be a system through which transfer orders are effected.

(4) Where orders relating to financial instruments other than securities are effected through the system—

(a)the system must primarily be a system through which securities transfer orders are effected; and

(b)the designating authority must consider that designation is required on grounds of systemic risk.

Arrangements and resources

2.  The system must have adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules or, as respects monitoring, arrangements providing for that function to be performed on its behalf (and without affecting its responsibility) by another body or person who is able and willing to perform it.

Financial resources

3.  The system must have financial resources sufficient for the proper performance of its functions as a system.

Co-operation with other authorities

4.  The system must be able and willing to co-operate, by the sharing of information and otherwise, with—

(a)the Financial Services Authority,

(b)the Bank of England,

(c)any relevant office-holder, and

(d)any authority, body or person having responsibility for any matter arising out of, or connected with, the default of a participant.

Specific provision in the rules

5.—(1) The rules of the system must—

(a)specify the point at which a transfer order takes effect as having been entered into the system,

(b)specify the point after which a transfer order may not be revoked by a participant or any other party, and

(c)prohibit the revocation by a participant or any other party of a transfer order from the point specified in accordance with paragraph (b).

(2) The rules of the system must require each institution which participates in the system to provide upon payment of a reasonable charge the information mentioned in sub-paragraph (3) to any person who requests it, save where the request is frivolous or vexatious. The rules must require the information to be provided within fourteen days of the request being made.

(3) The information referred to in sub-paragraph (2) is as follows—

(a)details of the systems which are designated for the purposes of the Settlement Finality Directive in which the institution participates, and

(b)information about the main rules governing the functioning of those systems.

(4) The rules of the system must require each participant upon—

(a)the passing of a creditors' voluntary winding up resolution, or

(b)a trust deed granted by him becoming a protected trust deed,

to notify forthwith both the system and the designating authority that such a resolution has been passed, or, as the case may be, that such a trust deed has become a protected trust deed.

Default arrangements

6.  The system must have default arrangements which are appropriate for that system in all the circumstances.