Insolvency Act, 1936 (Act No. 24 of 1936)

35A. Transactions on market infrastructure
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[Section 35A heading substituted by section 2 of the Financial Sector Laws Amendment Act, 2021 (Act No. 23 of 2021), Notice No. 789, GG45825, dated 28 January 2022- effective 29 April 2022 per Notice No. 2050, GG46288, dated 29 April 2022]

 

(1)In this section—

 

"market infrastructure" means—

(a)an exchange as defined in section 1 and licensed under section 9 of the Financial Markets Act, 2012; and
(b)a central securities depository as defined in section 1 and licensed under section 29 of that Act; or
(c)a clearing house as defined in section 1 of that Act and licensed under section 49 of that Act;
(d)a central counterparty as defined in section 1 of that Act and licensed under section 49 of that Act; or

[Section 35A(1)(d) inserted by section 290, item 1 in Schedule 4, of Act No. 9 of 2017]

(e)a licensed external central counterparty as defined in section 1 of that Act;

[Section 35A(1)(e) inserted by section 290, item 1 in Schedule 4, of Act No. 9 of 2017]

 

"rules" means the exchange rules, depository rules or clearing house rules, as defined in section 1 of the Financial Markets Act, 2012;

 

"market participant" means an authorised user, a participant, a clearing member or a client as defined in section 1 of the Financial Markets Act, 2012, or any other party to a transaction;

 

"transaction" means any transaction to which the rules apply.

 

(2)If upon the sequestration of the estate of a market participant the obligations of such market participant in respect of any transaction entered into prior to sequestration have not been fulfilled, the market infrastructure in respect of any obligation owed to it, or any other market participant in respect of obligations owed to such market participant, shall in accordance with the rules applicable to any such transaction be entitled to terminate transactions or revoke settlement instructions and the trustee of the insolvent estate of the market participant shall be bound by such termination or revocation.

 

(3)No claim as a result of the termination or revocation of any transaction as contemplated in subsection (2) shall exceed the amount due upon termination or revocation in terms of the rules in question.

 

(4)Any rules and the practices thereunder which provide for the netting of a market participant's position or for set-off in respect of transactions concluded by the market participant or for the opening or closing of a market participant's position or for the revocation of settlement instructions shall upon sequestration of the estate of the market participant be binding on the trustee in respect of any transaction or contract concluded by the market participant prior to such sequestration, but which is, in terms of such rules and practices, to be settled on a date occurring after the sequestration, or settlement of which was overdue on the date of sequestration.

 

(5)Section 341(2) of the Companies Act, 1973 (Act No. 61 of 1973), and sections 26, 29 and 30 of this Act shall not apply to property disposed of in accordance with the rules.

 

[Section 35A amended by section 111 of the Financial Markets Act, 2012]