An analysis of settlement finality, clearing-corporation rights and the insolvency moratorium, examining whether close-out netting, collateral appropriation and completed securities settlements can survive the Section 14 IBC moratorium and how the proposed Securities Markets Code should be reconciled with Section 238 of the IBC.
The question nobody has had to answer
The insolvency of an ordinary trading company and the insolvency of a stock-broker who clears trades for the public are not the same event. First threatens the debtor’s own creditors. Second threatens strangers: the counterparties to trades already struck, the clearing corporation that has guaranteed those trades and, behind them, the settlement system on which every…