Page:Clearing and Settlement Systems Ordinance (Cap. 584).pdf/21

CLEARING AND SETTLEMENT SYSTEMS ORDINANCE



(3) For the purposes of subsection (1)(b), a system operator shall be taken to have received notice of an event mentioned in subsection (1)(a) if he deliberately failed to make enquiries as to that matter in circumstances in which a reasonable and honest person would have done so. Division 4—Netting of obligations of insolvent participants 25. Netting may be effected

(1) Where—
 * (a) a court has made an order for bankruptcy or winding up of a participant in a designated system;
 * (b) a resolution for voluntary winding up of a participant in a designated system has been passed; or
 * (c) a directors’ voluntary winding up statement in respect of a participant in a designated system has taken effect,

then, notwithstanding any provision of the law of insolvency, the system operator of the designated system may effect the netting of all obligations owed to or by the participant incurred up to the point of time that applies for the purposes of section 24(1).

(2) Where any netting has been effected as provided in subsection (1), then—
 * (a) the obligations that are netted shall be disregarded in the bankruptcy or winding up proceedings; and
 * (b) any net obligation owed to or by the participant that has not been discharged—
 * (i) is payable to the participant and may be recovered for the benefit of his creditors; or
 * (ii) is provable in the bankruptcy or winding up, as the case may be.

(3) A netting effected as provided in subsection (1) and any payment made by a participant as provided in subsection (2) shall not be voidable in the bankruptcy or winding up proceedings.