Gold Membership
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Financial Sector Regulation Act, 2017 (Act No. 9 of 2017)Chapter 12A : Resolution of Designated InstitutionsPart 3 : Resolution measures166W. Ranking of claims |
| (1) | Subject to the provisions of this Act, claims against a designated institution in resolution will rank in the order provided in the Insolvency Act, regardless of whether the claim arose before or during the resolution. |
| (2) | Notwithstanding the provisions of any law, if a designated institution is placed in liquidation, the trustee or liquidator must— |
| (a) | after payment of any preferred creditors provided for in the Insolvency Act, and before the payment of any unsecured creditors, apply the balance of the free residue in liquidation in the payment of any claims proved against the estate in question which were covered as a covered deposit in terms of this Act with interest thereon calculated as provided for in section 103(2) of the Insolvency Act; |
| (b) | after payment of any unsecured creditors, apply the balance of the free residue in liquidation in the payment of any claims proved against the estate in question arising in connection with flac instruments as defined in this Act; and |
| (c) | after the payment of flac instruments or, if no claims in connection with flac instruments have been made, then after the payment of unsecured creditors, apply the balance of the free residue in liquidation in the payment of any claims proved against the estate in question arising in connection with the amounts in terms of debt instruments designated as regulatory capital in terms of a financial sector law in the order prescribed in the financial sector law. |
| (3) | Any payments made by the trustee or liquidator in terms of subsection (2)(c) must be paid in the order prescribed in the financial sector law or, if the financial sector law does not prescribe the order, they must rank equally and abate in equal proportion, if necessary. |
| (4) | Notwithstanding the provisions of any law, the Reserve Bank must apply any money of the designated institution in resolution that becomes available to the resolution authority in paying the cost of the resolution and, subject to the provisions of this Act, in the payment of the claims of creditors which arose before the date of resolution. |
[Section 166W 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]
