Payment and Settlement Systems (Finality and Netting) Act · s 2

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2.
Interpretation
(1) In this Act, unless the context otherwise requires —
“Authority” means the Brunei Darussalam Central Bank established by the Brunei Darussalam Central Bank Order, 2010
(S 103/2010);
[S 17/2021]
“book-entry securities” means any securities issued under any written law transferable by a book-entry on a register or otherwise;
“default arrangements” means the arrangements put in place by a designated system to limit systemic and other types of risk which arise in the event of a participant appearing to be unable, or likely to become unable, to meet its obligations in respect of a transfer order, including any arrangements for —
(a) netting; or
(b) the closing out of open positions;
“defaulter” means a person in respect of whom action has been taken by a designated system under its default arrangements;

Payment and Settlement Systems
(Finality and Netting)
6

“designated system” means a system that is designated by the
Authority under section 3 to be a designated system for the purposes of this Act;
“disposition of property” includes a payment made into or out of an account of a participant;
“Minister” means the Minister of Finance and Economy;
“netting” means the conversion into one net claim or one net obligation of claims and obligations resulting from transfer orders which a participant either issues to, or receives from, one or more other participants with the result that only a net claim can be demanded or a net obligation be owed;
“operator”, in relation to a designated system, means the person specified in the order referred to in section 3(1) as the operator of the designated system;
“participant” means a party to an arrangement that establishes a system;
“relevant office holder” means —
(a) the Official Receiver exercising his powers under the
Bankruptcy Act (Chapter 67);
(b) a person acting in relation to a company as its liquidator, receiver, receiver and manager, judicial manager or an equivalent officer; or
(c) a person acting in relation to an individual as his trustee in bankruptcy or interim receiver of his property or an equivalent officer;
“settlement institution”, in relation to a designated system, means a body corporate providing accounts for the participants of the designated system to hold funds and to settle transactions between participants in the designated system;
“system” means a system established for —
(a) the clearing or settlement of payment obligations; or
(b) the clearing, settlement or transfer of book-entry securities;

Payment and Settlement Systems
(Finality and Netting)

“transfer order” means —
(a) an instruction by a participant to place at the disposal of a recipient an amount of money by means of a book-entry on the accounts of a settlement institution for a designated system, or an instruction which, when settled, results in the assumption or discharge of a payment obligation as defined by the rules of a designated system; or
(b) an instruction by a participant either to settle an obligation for the transfer of book-entry securities, or for the transfer of such securities.
(2) A reference in this Act to the law of insolvency shall be construed as a reference to —
(a) the Bankruptcy Act (Chapter 67);
(b) Parts 4 and 5 of the Insolvency Act (Chapter 247); and
(c) any other written law or rule of law whether of Brunei
Darussalam or a place outside Brunei Darussalam which is concerned with or in any way related to the bankruptcy, winding up or insolvency of a person.

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s 2Interpretation

(1)

In this Act, unless the context otherwise requires —

“Authority” means the Brunei Darussalam Central Bank established by the Brunei Darussalam Central Bank Order, 2010

(S 103/2010);

[S 17/2021]

“book-entry securities” means any securities issued under any written law transferable by a book-entry on a register or otherwise;

“default arrangements” means the arrangements put in place by a designated system to limit systemic and other types of risk which arise in the event of a participant appearing to be unable, or likely to become unable, to meet its obligations in respect of a transfer order, including any arrangements for —

(a)

netting; or

(b)

the closing out of open positions;

“defaulter” means a person in respect of whom action has been taken by a designated system under its default arrangements;

Payment and Settlement Systems

(Finality and Netting)

“designated system” means a system that is designated by the

Authority under section 3 to be a designated system for the purposes of this Act;

“disposition of property” includes a payment made into or out of an account of a participant;

“Minister” means the Minister of Finance and Economy;

“netting” means the conversion into one net claim or one net obligation of claims and obligations resulting from transfer orders which a participant either issues to, or receives from, one or more other participants with the result that only a net claim can be demanded or a net obligation be owed;

“operator”, in relation to a designated system, means the person specified in the order referred to in section 3(1) as the operator of the designated system;

“participant” means a party to an arrangement that establishes a system;

“relevant office holder” means —

(a)

the Official Receiver exercising his powers under the

Bankruptcy Act (Chapter 67);

(b)

a person acting in relation to a company as its liquidator, receiver, receiver and manager, judicial manager or an equivalent officer; or

(c)

a person acting in relation to an individual as his trustee in bankruptcy or interim receiver of his property or an equivalent officer;

“settlement institution”, in relation to a designated system, means a body corporate providing accounts for the participants of the designated system to hold funds and to settle transactions between participants in the designated system;

“system” means a system established for —

(a)

the clearing or settlement of payment obligations; or

(b)

the clearing, settlement or transfer of book-entry securities;

Payment and Settlement Systems

(Finality and Netting)

“transfer order” means —

(a)

an instruction by a participant to place at the disposal of a recipient an amount of money by means of a book-entry on the accounts of a settlement institution for a designated system, or an instruction which, when settled, results in the assumption or discharge of a payment obligation as defined by the rules of a designated system; or

(b)

an instruction by a participant either to settle an obligation for the transfer of book-entry securities, or for the transfer of such securities.

(2)

A reference in this Act to the law of insolvency shall be construed as a reference to —

(a)

the Bankruptcy Act (Chapter 67);

(b)

Parts 4 and 5 of the Insolvency Act (Chapter 247); and

(c)

any other written law or rule of law whether of Brunei

Darussalam or a place outside Brunei Darussalam which is concerned with or in any way related to the bankruptcy, winding up or insolvency of a person.