| (1) |
If the Reserve Bank determines that it is necessary to do so for the orderly resolution of a designated institution in resolution, the Reserve Bank may do any of the following: |
| (a) |
Subject to subsection (3), by notice to the other parties to an agreement to which the designated institution is a party, being an agreement that came into effect before the designated institution was put in resolution, cancel the agreement with effect from the date stated in the notice, which date must be after the date of the notice; |
| (b) |
subject to subsection (4), by written notice to the parties and lodging notice to that effect with the court or arbitrator, suspend specified legal proceedings or arbitration proceedings to which the designated institution is a party; |
| (c) |
despite subsection (3), and subject to subsection (4), by written notice to the parties, suspend the institution of any claim for damages in respect of loss sustained by a person resulting from a cancellation of an agreement in terms paragraph (a); |
| (d) |
subject to subsection (4), by written notice to the parties to an agreement to which a designated institution is a party, suspend an obligation of a party to the agreement; or |
| (e) |
subject to subsection (5), by notice published in the Register, prohibit the commencement of specified legal proceedings or arbitration proceedings against the designated institution. |
| (2) |
The Reserve Bank may exercise the power in terms of subsection (1)(a) only— |
| (a) |
if the agreement prefers one creditor of the designated institution over another creditor of the same class; |
| (b) |
if the agreement is unreasonably onerous on the designated institution; |
| (c) |
if the agreement is a lease of movable or immovable property entered into before the designated institution was placed in resolution; or |
| (d) |
to the extent that the agreement is a guarantee issued by the designated institution before the designated institution was placed in resolution, excluding a guarantee that the designated institution is required to make good within 30 days after the designated institution was placed in resolution. |
| (3) |
Cancellation of an agreement in terms of subsection (1)(a) does not affect the rights of the parties to the agreement, which rights accrued before the date the cancellation takes effect. |
| (4) |
A notice in terms of subsection (1)(b), (c) or (d) must specify the period of the suspension, which must be a reasonable period. |
| (5) |
A notice in terms of subsection (1)(e) must specify the period of the prohibition, which must be a reasonable period. |
| (6) |
A notice in terms of subsection (1)(b), (c), (d) or (e) further suspends the operation of any time barring terms, whether in an agreement or a law, and includes the suspension of the running of prescription in terms of the Prescription Act, 1969 (Act No. 68 of 1969), for the specified period. |
[Section 166R inserted by section 51 of the Financial Sector Laws Amendment Act, 2021 (Act No. 23 of 2021), Notice No. 789, GG45825, dated 28 January 2022- effective 1 June 2023 per (b)(ii) of Commencement Notice No. 3202, GG48294, dated 24 March 2023]
Gold Membership
