Insolvency Amendment Act

1. The following sections are hereby inserted in the Insolvency Act, 1936 (hereinafter: referred to as the principal Act), after section 35: 5 "Transactions on an exchange 35A. 1 In this section- 'exchange' means a licensed stock exchange as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), or a financial exchange or clearing house as defined in section 1 of the 10 Financial Markets Control Act, 1989 (Act No. 55 of 1989); 'market participant' means a stockbroker as defined in section 1 of the Stock Exchanges Control Act, 1985, or a financial instrument principal or a financial instrument trader as defined in section 1 of the Financial Markets Control Act, 1989, or a client of such a stockbroker 15 or financial instrument trader or any other party to a transaction; . 'rules of an e'.'change' meansrulc;:smade pursu!lnt to either section 12 of the Stock Exchanges Control Act, 1985, or section 17 of the Financial Markets Control Act, 1989; 'transaction' means any transaction to which the rules of an exchange 20 . apply. (2) If upon the sequestration of the estate of a market participant the obligations of such market participant in respect of any transaction entered into :Prior to sequestration have not been fulfilled, the exchange in question in respect 'of any obligation owed to it, o"r any 25 other market participant in respect of obligations owed to such market participant, shall in accordance with the rules of that exchange applicable to any such transaction be entitled to terminate all such transactions and the trustee of the insolvent estate of the market participant shall be bound by such termination. 30 4 No. 16556 Act No. 32, 1995 GOVERNMENT GAZETIE, 21 JULY 1995 INSOLVENCY AMENDMENT ACf, 1995 (3) No claim as a result of the terrriinatiori of any transaction as .contemplated in subsection (2) shall exceed the amount due upon termination in terms of the rules of the exch_ange in question. (4) Any rules of an exchange and the practices thereunder which provide for the netting of a market participant's position or for set-off 5 in respect of transactions concluded by the market participant or for the opening or closing of a market participant's position shall upon sequestration of the estate of the market participant be binding on the trustee in respect of any transaction or contract concluded by the market participant prior to such sequestration, but which is, in terms 10 of such rules and practices, to be settled on a date occurring after the sequestration, or settlement of which was overdue on the date of sequestration. · · · . . (5) Section341(2) ofthe Companies Act, 1973 (Act No. 61 of1973), and sections 26, 29 and 30 of this Act shall not apply to property 15 disposed of in accordancewith the rules of an exchange. Agreements on informal markets 35B. 1 In this section 'a reement' means an a reement, other than a transaction as defined in section 35A, providing primarily for delivery, exchange, settlement or payment, as the case may be, on a 20 future date, of, or in connection with, or based on, or based on the price of, currency of a country other than the Republic, interest rates, exchange rates, indices, gold, precious or base metals, financial instruments as defined in section 1 of the Financial Markets Control Act, 1989 (Act No. 55 of1989), whether or not it is a standardised 25 contract as defined therein, securities as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), or such other commodity or corporeal or incorporeal thing or agreement as may be specified by the Minister, after consultation with the Minister of ·Finance, by notice in the Gazette, or any combination of, or option on, 30 any of the afore going agreements. · (2) If upon sequestration of the estate of a party to an agreement, any obligation, whether then immediately claimable or not, arising out of such agreement has not been fulfilled, the right of a party to claim specific performance in terms of such agreement shall be 35 replaced by a claim for payment of damages as at the date of sequestration, which damages shall be deemed to constitute a liquidated claim for purposes of netting or set-off. (3) Any provision in an agreement for the netting or set-off of the parties' claims under one or more agreements shall, upon sequestra- 40 tion of the estate of any party, be binding on the trustee in respect of any agreement concluded prior to such sequestration but which is, in terms of such agreement, to be settled on a date occurring after the sequestration, or settlement of which was overdue·on the date of sequestration. · (4) Section341(2) of the Companies Act, 1973 (Act No. 61 of1973), and sections 26, 29 and 30 of this Act shall not apply to property disposed of in terms of an agreement.''. 45 · 6 No. 16556 Act No. 32, 1995 GOVERNMENT GAZETfE, 21 JULY 1995 INSOLVENCY AMENDMENT ACf, 1995 Amendment of section 46 of Act 24 of 1936

2. Section 46 of the principal Act is hereby amended by the addition of the following proviso: "Provided that an set-off shall be effective and bindin on the trustee of the insolvent estate if it takes place between an exchange or a market participant 5 as defined in section 35A and any other party in accordance with the rules of such an exchange, or if it takes place under an agreement defined in ' section 35B. ". Amendment of laws of former TBVC states

3. The amendments of the principal Act contained in sections 1 and 2 of this Act 10 shall be deemed also to have been effected to the Insolvency Act, 1936 (Act No. 24 of 1936), as it is in force in the areas of the former Republics of Transkei, Bophuthatswana, Venda and Ciskei. Short title

4. This Act shall be called the Insolvency Amendment Act, 1995. 15