Netting of Financial Contracts Act, 1995

Netting of Financial Contracts Act, 1995 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 1995 Netting of Financial Contracts Act, 1995 Netting of Financial Contracts Act, 1995 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Print Full ActPriontáil an tAcht Iomlán Number 25 of 1995 NETTING OF FINANCIAL CONTRACTS ACT, 1995 ARRANGEMENT OF SECTIONS Section 1. Interpretation. 2. Powers of the Central Bank of Ireland. 3. Powers of the Minister for Finance. 4. Enforceability of netting, set off, guarantees and collateral in relation to netting and master netting agreements. 5. Short title. Number 25 of 1995 NETTING OF FINANCIAL CONTRACTS ACT, 1995 AN ACT TO MAKE PROVISION FOR THE ENFORCEABILITY OF NETTING, BETWEEN TWO PARTIES ONLY, IN RELATION TO FINANCIAL CONTRACTS IN ACCORDANCE WITH THE TERMS OF A NETTING AGREEMENT; FOR THE ENFORCEABILITY OF SET OFF BY THOSE PARTIES OF THE AMOUNTS DUE UNDER SUCH NETTING AGREEMENTS IN ACCORDANCE WITH THE TERMS OF A MASTER NETTING AGREEMENT; FOR THE SET OFF OF MONEY OR THE PROCEEDS OF COLLATERAL AND FOR THE ENFORCEABILITY OF GUARANTEES PROVIDED SOLELY IN RELATION TO ANY NETTING AGREEMENT OR ANY MASTER NETTING AGREEMENT IN ACCORDANCE WITH THE TERMS OF EACH; AND FOR RELATED MATTERS. [1st August, 1995] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: Interpretation. 1.—In this Act, unless the context otherwise requires— “Minister” means the Minister for Finance; “Bank” means the Central Bank of Ireland; “the Companies Acts” means the Companies Act, 1963 , and every enactment which is to be construed as one with that Act; “financial contracts” means— (a) interest-rate contracts as follows— (i) single-currency interest rate swaps, (ii) basis swaps, (iii) forward-rate agreements, (iv) interest-rate futures, (v) interest-rate options, (vi) other contracts of a similar nature, (b) foreign-exchange contracts and contracts concerning gold, as follows— (i) cross-currency interest-rate swaps, (ii) spot foreign exchange contracts, (iii) forward foreign-exchange contracts, (iv) currency futures, (v) currency options, (vi) other contracts of a similar nature, (vii) contracts concerning gold of a nature similar to subparagraphs (i) to (vi), (c) (i) securities lending and securities borrowing contracts, (ii) sale and repurchase agreements, including reverse repurchase agreements, in relation to securities, (d) contracts of a nature similar to those specified in paragraph (a) (i) to (v) or paragraph (b) (i) to (v) concerning other reference items or indices relating to— (i) equities and bonds, (ii) precious metals except gold, (iii) commodities other than precious metals, (e) contracts which are combinations of contracts specified at paragraphs (a) to (d), (f) any contract included by virtue of section 2 , and (g) contracts of a similar nature, as specified by regulations under section 3 ; “money” includes money in a currency other than the currency of the State; “netting” means the termination of financial contracts, the determination of the termination values of those contracts and the set off of the termination values so determined so as to arrive at a net amount due, if any, by one party to the other where each such determination and set off aforesaid is effected in accordance with the terms of a netting agreement between those parties; “netting agreement” means an agreement between two parties only, in relation to present or future financial contracts between them— (a) providing, inter alia, for the termination of those contracts for the time being in existence, the determination of the termination values of those contracts and the set off of the termination values so determined so as to arrive at a net amount due, and (b) which may provide for a guarantee to be given to one party on behalf of the other party solely to secure the obligation of either party in respect of the financial contracts concerned, and (c) which may provide for the set off against the net amount due under paragraph (a) and that amount only of— (i) any money provided solely to secure the obligation of either party in respect of the financial contracts concerned, (ii) the proceeds of the enforcement and realisation of any collateral in the form of— (I) securities or other property provided, or (II) money, securities or other property provided solely to secure the obligation of the guarantor under paragraph (b), solely to secure the obligation of either party in respect of the financial contracts concerned; “master netting agreement” means an agreement between two parties only, in relation to netting agreements between them— (a) providing, inter alia, for the set off of the net amounts due under two or more netting agreements between them, and (b) which may provide for a guarantee to be given to one party on behalf of the other party solely to secure the obligation of either party in respect of the netting agreements concerned, and (c) which may provide for the set off against the net amount due under paragraph (a) and that amount only of— (i) any money provided solely to secure the obligation of either party in respect of the netting agreements concerned, (ii) the proceeds of the enforcement and realisation of any collateral in the form of— (I) securities or other property provided, or (II) money, securities or other property provided solely to secure the obligation of the guarantor under paragraph (b), solely to secure the obligation of either party in respect of the netting agreements concerned; “party” means a person constituting one of the parties to an agreement. Powers of the Central Bank of Ireland. 2.—The Bank may, by notice issued under this section, designate as “financial contracts” contracts contained in Annex III of Council Directive No. 89/647/EEC of the European Communities of 18 December, 1989, as amended from time to time by any act of the European Union. Powers of the Minister for Finance. 3.—(1) The Minister may, in consultation with the Bank, by regulations made under this section— (a) designate contracts or types of contracts so as to include them within the definition of “financial contracts”, (b) without prejudice to any notice issued under section 2 , designate contracts or types of contracts so as to exclude them from within the definition at paragraphs (a) to (g) of “financial contracts”. (2) Designation for the purpose of exclusion under subsection (1) (b) of any contract from the definition of “financial contracts” shall be without prejudice to the applicability of section 4 to any such contract formed prior to such exclusion. (3) Every regulation made under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and if a resolution annulling the regulation is passed by either such House within the next twenty-one days on which that House has sat after the regulation has been laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder. Enforceability of netting, set off, guarantees and collateral in relation to netting and master netting agreements. 4.—(1) Notwithstanding anything contained in any rule of law relating to bankruptcy, insolvency or receivership, or in the Companies Acts or the Bankruptcy Act, 1988 , the provisions— (a) relating to netting, the set off of money provided by way of security, the enforcement of a guarantee and the enforcement and realisation of collateral and the set off of the proceeds thereof, as contained within a netting agreement or a guarantee provided for in such an agreement shall be legally enforceable against a party to the agreement and, where applicable, against a guarantor or other person providing security, and (b) relating to set off of the net amounts due under netting agreements, the set off of money provided by way of security, the enforcement of a guarantee and the enforcement and realisation of collateral and the set off of the proceeds thereof, as contained within a master netting agreement or a guarantee provided for in such an agreement shall be legally enforceable against a party to the agreement and, where applicable, against a guarantor or other person providing security. (2) Nothing in subsection (1) shall— (a) prevent the application of any enactment or rule of law which would prevent the legal enforceability of netting, set off, enforcement and realisation within the meaning of subsection (1) in any particular case, on the grounds of fraud or misrepresentation or on any similar ground and, in particular, by reason of the application of— (i) sections 57 , 58 and 59 of the Bankruptcy Act, 1988 , (ii) section 286 of the Companies Act, 1963 , and (iii) section 139 of the Companies Act, 1990 , or (b) permit the enforceability of netting, set off, enforcement and realisation under subsection (1) if any provision of an agreement between the two parties concerned would make netting, set off, enforcement and realisation void whether because of fraud or misrepresentation or any similar ground. (3) Section II of the Statute of Frauds, 1695 , shall not apply in relation to financial contracts. (4) For the avoidance of doubt a financial contract shall not be and shall be deemed never to have been void or unenforceable by reason of the Gaming and Lotteries Acts, 1956 to 1986. Short title. 5.—This Act may be cited as the Netting of Financial Contracts Act, 1995. Acts Referred to Companies Act, 1963 1963, No. 33 Companies Act, 1990 1990, No. 33 Bankruptcy Act, 1988 1988, No. 27 Statute of Frauds, 1695 7 Will. 3 (Ir.) c. 12 Gaming and Lotteries Acts, 1956 to 1986 Privacy Statement Accessibility European Legislation Identifier (PDF) Open Data License Ráiteas Príobháideachais Inrochtaineacht Aitheantóir Eorpach Reachtaíochta (ELI) Ceadúnas Sonraí Oscailte Liosta Fianán © Government of Ireland. Oireachtas Copyright Material is reproduced with the permission of the Houses of the Oireachtas © Rialtas na hÉireann. Atáirgtear ábhar faoi Chóipcheart le cead ó Thithe an Oireachtais