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Effect of insolvency process on asset covered securities and cover assets hedge contracts of designated credit institutions.
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85.—(1) If a designated or formerly designated credit institution, or where the institution has a parent entity or a company is related to the institution, the parent entity or related company, becomes subject to an insolvency process—
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(a) all asset covered securities issued by the institution remain outstanding, subject to the terms and conditions specified in the security documents under which those securities are created,
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(b) every cover assets hedge contract relating to those securities continues to have effect, subject to the terms and conditions of the contract,
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(c) each cover-assets monitor or manager appointed by or in respect of the institution continues to hold office as such in accordance with the terms and conditions applicable to the appointment, and
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(d) the institution's obligations under those securities, or any such contract or appointment, continue to be enforceable.
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(2) Cover assets that are included in a cover assets pool do not form part of the assets of a designated or formerly designated credit institution or, where the institution has a parent entity or a company is related to the institution, of the parent entity or related company, for the purposes of any insolvency process until the claims secured by this Part have been fully satisfied.
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(3) Cover assets that are included in a cover assets pool are not liable to attachment, sequestration or other form of seizure, or to set-off by any persons, that would, but for this subsection, be permitted by law so long as claims secured under this Part remain unsatisfied.
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