Section 338: Interpretation of Part V

338. Interpretation of Part V (1) In this Part— “account agreement”, in relation to a securities account, means the agreement with the relevant intermediary governing that securities account; “account holder” means a person in whose name an intermediary maintains a securities account; “branch or agency net payment entitlement”, with respect to a multibranch netting agreement, means the amount, if any, that would have been owed by the non-insolvent party to the foreign party after netting only those qualified financial contracts entered into by the non-insolvent party with the branch or agency of the foreign party in Mauritius under the multi-branch netting agreement; I14 – 181 [Issue 3] Insolvency Act “branch or agency net payment obligation” with respect to a multibranch netting agreement, means the amount, if any, that would have been owed by the foreign party to the non-insolvent party after netting only those qualified financial contracts entered into by the non-insolvent party with the branch or agency of the foreign party in Mauritius under the multi-branch netting agreement; “cash” means money credited to an account in any currency, or a similar claim for repayment of money, such as a money market deposit; “collateral” means— (a) cash in any currency; (b) securities of any kind, including (without limitation) debt and equity securities; (c) guarantees, letters of credit and obligations to reimburse; or (d) any asset commonly used as collateral in Mauritius; “collateral arrangement” means any margin, collateral or security arrangement or other credit enhancement related to a netting agreement or one or more qualified financial contracts entered into, including— (a) a pledge or any other form of security interest in collateral, whether possessory or non-possessory; (b) a title transfer collateral arrangement; and (c) any guarantee, letter of credit or reimbursement obligation by or to a party to one or more qualified financial contracts, in respect of those qualified financial contracts; “Convention” means the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary; “disposition” means— (a) any transfer of title whether outright or by way of security; and (b) any grant of a security interest, whether possessory or nonpossessory; “foreign party” means a party whose home country is not Mauritius; “global net payment entitlement” means the amount, if any, owed by the non-insolvent party, or that would be owed if the relevant multibranch netting agreement provided for payments to either party, upon termination of qualified financial contracts under the agreement, under any and all circumstances to the foreign party as a whole after giving effect to the netting provisions of a multi-branch netting agreement with respect to all qualified financial contracts subject to netting under the multibranch netting agreement; “global net payment obligation” means the amount, if any, owed by the foreign party as a whole to the non-insolvent party after giving effect to the netting provisions of a multi-branch netting agreement with respect to all qualified financial contracts subject to netting under the multibranch netting agreement; [Issue 3] I14 – 182 Revised Laws of Mauritius “home country” means the country where a party to a netting agreement is organised or incorporated; “multi-branch netting agreement” means a netting agreement between two parties under which at least one party enters into ty as a whole to the non-insolvent party after giving effect to the netting provisions of a multi-branch netting agreement with respect to all qualified financial contracts subject to netting under the multibranch netting agreement; [Issue 3] I14 – 182 Revised Laws of Mauritius “home country” means the country where a party to a netting agreement is organised or incorporated; “multi-branch netting agreement” means a netting agreement between two parties under which at least one party enters into qualified financial contracts in its home office and one or more of its branches or agencies located in countries other than its home country; “FSC” means the Financial Services Commission established under the Financial Services Act; “insolvency proceeding”— (a) means a collective judicial or administrative proceeding, including an interim proceeding, in which the assets and affairs of the debtor are subject to control or supervision by a Court or other competent authority for the purpose of reorganisation or winding up; and (b) includes a proceeding for the bankruptcy of an individual or the winding up of a company under this Act; “insolvency administrator”— (a) means a person authorised to administer a reorganisation or winding up, including one authorised on an interim basis; and (b) includes a debtor in possession if permitted by the applicable insolvency law; “insolvent party” means the party in relation to which an insolvency proceeding under this Act has been instituted; “liquidator” means the liquidator, receiver, trustee, conservator or other person or entity which administers the affairs of an insolvent party during an insolvency proceeding under this Act; “multi-branch netting agreement” means a netting agreement between 2 parties under which at least one party enters into qualified financial contracts in its home office and one or more of its branches or agencies located in countries other than its home country; “multi-unit State” means a State within which 2 or more territorial units of that State, or both the State and one or more of its territorial units, have their own rules of law in respect of any of the issues specified in article 8.1 of the Convention; “netting” means— (a) the termination, liquidation or acceleration of any payment or delivery obligations or entitlements under one or more qualified financial contracts entered into under a netting agreement; (b) the calculation or estimation of a close-out value, market value, liquidation value or replacement value in respect of each obligation or entitlement or group of obligations or entitlements terminated, liquidated or accelerated under paragraph (a); I14 – 183 [Issue 4] Insolvency Act (c) the conversion of any values calculated or estimated under paragraph (b) into a single currency; or (d) the determination of the net balance of the values calculated under paragraph (b), as converted under paragraph (c), whether by operation of set-off or otherwise; “netting agreement” means— (a) an agreement between 2 parties that provides for netting of present or future payment or delivery obligations or entitlements arising under or in connection with one or more qualified financial contracts entered into under the agreement by the parties to the agreement, and entered into; (b) an agreement between 2 parties that provides for netting of the amounts due under 2 or more agreements referred to in paragraph (a), and entered into; or (c) any collateral arrangement related to an agreeme ) an agreement between 2 parties that provides for netting of present or future payment or delivery obligations or entitlements arising under or in connection with one or more qualified financial contracts entered into under the agreement by the parties to the agreement, and entered into; (b) an agreement between 2 parties that provides for netting of the amounts due under 2 or more agreements referred to in paragraph (a), and entered into; or (c) any collateral arrangement related to an agreement under paragraph (a) or (b) entered into between the parties, after or before 15 December 2011; “non-insolvent party” means a party other than the insolvent party; “office”, in relation to an intermediary— (a) means a place of business at which any activity of the intermediary is carried on; but (b) does not include a place of business which is intended to be merely temporary or a place of business of any person other than the intermediary; “party” means a person constituting one of the parties to a netting agreement; “perfection” means completion of any steps necessary to render a disposition effective against persons who are not parties to that disposition; “qualified financial contract”— (a) means a financial agreement, contract or transaction, including any term or condition incorporated by reference in the agreement, contract or transaction, pursuant to which payment or delivery obligations are due to be performed at a certain time or within a certain period of time; and (b) includes— (i) a currency, cross-currency or interest rate swap; (ii) a basis swap; (iii) a spot, future, forward or other foreign exchange transaction; (iv) a cap, collar or floor transaction; (v) a commodity swap; (vi) a forward rate agreement; [Issue 4] I14 – 184 Revised Laws of Mauritius (vii) a currency or interest rate future; (viii) a currency or interest rate option; (ix) an equity derivative, such as an equity or equity index swap, equity forward, equity option or equity index option; (x) a derivative relating to bonds or other debt securities or to a bond or debt security index, such as a total return swap, index swap, forward, option or index option; (xi) a credit derivative, such as a credit default swap, credit default basket swap, total return swap or credit default option; (xii) an energy derivative, such as an electricity derivative, oil derivative, coal derivative or gas derivative; (xiii) a weather derivative, such as a weather swap or weather option; (xiv) a bandwidth derivative; (xv) a freight derivative; (xvi) an emissions derivative; (xvii) an inflation or other economic statistics derivative; (xviii) a spot, future, forward or other securities or commodities transaction; (xix) a securities contract, including a margin loan and an agreement to buy, sell, borrow or lend securities, such as a securities repurchase or reverse repurchase agreement, a securities lending agreement or a securities buy/sell-back agreement, including any such contract or agreement relating to mortgage loans, interest in mortgage loans or mortgage-related securities; (xx) a commodities contract, including an agreement to buy, sell, borrow or lend commodities, such as a commodities repurchase or reverse repurchase agreement, a commodities lending agreement or a commodities buy/sell-back agreement; (xxi) a collateral arrangement; (xxii) an agreement to clear or settle securities transactions or to act as a depository for securities; (xxiii) any other agreement, contract or tra lating to mortgage loans, interest in mortgage loans or mortgage-related securities; (xx) a commodities contract, including an agreement to buy, sell, borrow or lend commodities, such as a commodities repurchase or reverse repurchase agreement, a commodities lending agreement or a commodities buy/sell-back agreement; (xxi) a collateral arrangement; (xxii) an agreement to clear or settle securities transactions or to act as a depository for securities; (xxiii) any other agreement, contract or transaction similar to any agreement, contract or transaction referred to in subparagraphs (i) to (xxii) with respect to one or more reference items or indices relating to (without limitation) interest rates, currencies, commodities, energy products, electricity, equities, weather, bonds and other debt instruments, precious metals, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial or economic consequence, or economic or financial indices or measures of economic or financial risk or value; I14 – 185 [Issue 3] Insolvency Act (xxiv) any swap, forward, option, contract for differences or other derivative in respect of, or combination of, one or more agreements or contracts referred to in subparagraphs (i) to (xxiii); and (xxv) any agreement, contract or transaction designated as such by the FSC for the purpose of this Act by notice published in the Gazette; “relevant intermediary” means the intermediary that maintains a securities account for an account holder; “securities” means any shares, bonds or other financial instruments or financial assets (other than cash), or any interest in any of them; “securities account” means an account maintained by an intermediary to which securities may be credited or debited; “securities held with an intermediary” means the rights of an account holder resulting from a credit of securities to a securities account; “title transfer collateral arrangement” means a margin, collateral or security arrangement related to a netting agreement based on the transfer of title to collateral, whether by outright sale or by way of security, including a sale and repurchase agreement, securities lending agreement, securities buy/sell-back agreement or an irregular pledge; “writing” means a record of information, including information communicated by teletransmission, which is in tangible or other form and is capable of being reproduced in tangible form on a subsequent occasion. (2) A reference in this Part to a disposition of securities held with an intermediary includes— (a) a disposition of a securities account; (b) a disposition in favour of the account holder’s intermediary; or (c) a lien by operation of law in favour of the account holder’s intermediary in respect of any claim arising in connection with the maintenance and operation of a securities account. (3) (a) ”Intermediary”, for the purposes of this Part, means a person that in the course of a business or other regular activity maintains securities accounts for others or both for others and for its own account and is acting in that capacity. (b) A person shall not be considered an intermediary for the purposes of this Part merely because— (i) that person acts as registrar or transfer agent for an issuer of securities; or (ii) that person records in its own books details of securities credited to securities accounts maintained by an intermediary in the names of other persons for whom it acts as or other regular activity maintains securities accounts for others or both for others and for its own account and is acting in that capacity. (b) A person shall not be considered an intermediary for the purposes of this Part merely because— (i) that person acts as registrar or transfer agent for an issuer of securities; or (ii) that person records in its own books details of securities credited to securities accounts maintained by an intermediary in the names of other persons for whom it acts as manager or agent or otherwise in a purely administrative capacity. [Issue 3] I14 – 186 Revised Laws of Mauritius (c) Subject to paragraph (d), a person shall be regarded as an intermediary for the purposes of this Part in relation to securities which are credited to securities accounts which it maintains in the capacity of a central securities depository or which are otherwise transferable by book entry across securities accounts which it maintains. (d) In relation to securities which are credited to securities accounts maintained by a person in the capacity of operator of a system for the holding and transfer of such securities on records of the issuer or other records which constitute the primary record of entitlement to them as against the issuer, the FSC may, by notice issued under this paragraph and published in the Gazette, make an order that the person who operates that system shall not be an intermediary for the purposes of this Part. (4) (a) A reference in this Part to the text of the Convention is to the text of the Convention as approved by the member States of the Hague Conference on Private International Law by signature in December 2002, without regard to whether or not the Convention has entered into force. (b) A reference in this Part to a Contracting State of the Convention is to a State that has ratified, accepted, approved or acceded to the Convention in accordance with Chapter V of the Convention and the reference shall only apply once the Convention has entered into force. (5) A qualified financial contract shall not be and shall be deemed never to have been void or unenforceable by reason of the Gambling Regulatory Authority Act, the Code Civil Mauricien or any other enactment relating to games, gaming, gambling, wagering or lotteries. (6) The Financial Services Commission may, by notice issued under this section and published in the Gazette, designate as “qualified financial contracts” any agreement, contract or transaction, or type of agreement, contract or transaction, in addition to those listed in this Part. [S. 338 amended by s. 15 of Act 38 of 2011 w.e.f. 15 December 2011.] Sub-Part II – Netting Agreement