S.I. No. 89/2004 - European Communities (Financial Collateral Arrangements) (Amendment) Regulations 2004

I, CHARLIE McCREEVY, Minister for Finance, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 , and for the purpose of giving full effect to Directive 2002/47/EC of the European Parliament and of the Council, done at Brussels on 6 June 2002, hereby make the following Regulations:

1. These Regulations may be cited as the European Communities (Financial Collateral Arrangements) (Amendment) Regulations 2004.

2. In these Regulations, “the Principal Regulations” means the European Communities (Financial Collateral Arrangements) Regulations 2004 ( S.I. No. 1 of 2004 ).

3. Regulation 3(1) of the Principal Regulations is amended by substituting the following definition for the definition of “close-out netting provision”:

“ ‘close-out netting provision’ means—

(a) a provision of a financial collateral arrangement, or of an arrangement of which a financial collateral arrangement forms part, or

(b) in the absence of such a provision, any provision of an enactment or statutory instrument,

as a result of which, on the occurrence of an enforcement event (whether through the operation of netting or set-off or otherwise)—

(c) the obligations of the parties to the arrangement—

(i) are accelerated so as to be immediately due and expressed as an obligation to pay an amount representing the estimated current value of the obligations, or

(ii) are terminated and replaced by an obligation to pay such an amount, or

(d) an account is taken of what is due from each party to the other in respect of those obligations and the party from which the larger amount is due is required to pay to the other party a net amount equal to the balance of the account;”.

4. Regulation 4(2)(d) of the Principal Regulations is amended by inserting the following words after “the law of the State”, “or of another country or a territory outside the State.”

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

The purpose of these Regulations is to amend certain provisions of the European Communities (Financial Collateral Arrangements) Regulations 2004 ( S.I. No. 1 of 2004 ) so as to clarify the meaning of those provisions and to give full effect to Directive 2002/47/EC of the European Parliament and of the Council.