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Banking Bill

Clause 48: Power to protect certain interests Amendment 81 81: Clause 48, page 23, line 14, leave out paragaphs (a) to (c) and insert— ““(a) ““security interest”” means any legal or equitable interest of any right in security (but not a title transfer collateral arrangement) created or otherwise arising by way of security including a charge, mortgage, pledge or lien and including, in relation to Scotland, a heritable security, (b) ““set-off or netting arrangement”” is an agreement or arrangement between two or more parties under which Obligation 1 can be set off or netted against Obligation 2 to discharge or reduce the amount of Obligation 2 or different claims or obligations can be converted into a single net claim or obligation (incuding under a close-out netting provision or a title transfer collateral arrangement), whether by contract, operation of law or otherwise, whether on a bilateral or multilateral basis and whether through the interposition of a clearing house central counterparty, settlement agent or otherwise, (c) ““set off”” includes, in relation to Scotland, compensation, retention and/or balancing of accounts, as the case may require, (d) ““close-out netting provision”” means a term of an arrangement, or any legislative provision under which on the occurrence of a specified event, whether through the operation of netting or set-off or otherwise— (i) the obligations of the parties are accelerated to become immediately due and expressed as an obligation to pay an amount representing the original obligation’s estimated current value or replacement cost, or are terminated and replaced by an obligation to pay such an amount; or (ii) an account is taken of what is due from each party to the other in respect of such obligations and a net sum equal to the balance of the account is payable by the party from whom the larger amount is due to the other party; (e) ““title transfer collateral arrangement”” means an agreement or arrangement, including a repurchase agreement, evidenced in writing, where— (i) the purpose of the agreement or arrangement is to secure or otherwise cover obligations owed to the collateral-taker; (ii) the collateral-provider transfers legal and beneficial ownership in collateral to a collateral-taker on terms that when the relevant obligations are discharged the collateral-taker must transfer legal and beneficial ownership of the same or equivalent collateral to the collateral-provider.””