Law On Financial Collateral

Original Language Title: Lov om finansiell sikkerhetsstillelse

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Read the untranslated law here: https://lovdata.no/dokument/NL/lov/2004-03-26-17

Law on Financial Collateral.


Date LOV-2004-03-26-17


Affairs Ministry

Edited

LOV-2011-11-18-42 from 01/01/2012


Published in 2004 Booklet 5


Commencement 01.07.2004

Changes


Promulgated
26.03.2004

Short Title
Law on Financial Collateral.

Ref. EEA Agreement Annex XII no. 4 (dir 2002/47).

§ 1. Scope and Purpose The purpose is to strengthen the financial market and safeguarding financial stability by contributing to the safe, orderly and efficient financial collateral.
The law applies to agreements relating to financial collateral.
Act applies when both collateral and security holder belongs to one of the following categories:

A)
public authorities, including the authorities responsible for or complicit in the management of public debt or leads accounts for customers

B)
central banks, the European Central Bank, the International Payment Bank, the International Currency Fund, the European Investment Bank, International Bank for Reconstruction and Development, the International Finance Corporation, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, Council of Europe's settlement fund, the Nordic investment bank, the Caribbean development bank, the European bank for reconstruction and development, the European investment fund and the inter-American investment company,

C)
financial institutions, pension funds, investment firms, mutual funds and fund management companies,

D)
clearing houses and central counterparties, clearing houses and similar institutions regulated dealing with financial instruments as mentioned in the Securities Trading Act § 2-2 first paragraph no. 4, or legal persons acting in the capacity of trustee or authorized by one or more persons, such as representatives of bondholders in the bond or special purpose vehicles created in connection with securitization.

Act shall also apply to agreements on financial collateral concluded between any legal person and an institution as mentioned in the third paragraph.
The King may decide that the Act shall wholly or partly apply to Svalbard and Jan Mayen.

§ 2. Definitions etc. In this Act apply:

A)
agreement on financial collateral: agreement on the transfer of ownership of financial security, including the repurchase agreement and an agreement on pledging of financial security, with the aim of ensuring the fulfillment of financial obligations,

B)
financial liability: liability covered by the agreement on financial collateral and entitling to cash settlement or delivery of financial instruments,

C)
financial security: cash deposits, financial instruments and debt-

D)
cash deposits: deposits in credit institutions and similar cash deposits in any currency, including money market deposit,

E)
collateral: the party who transfers or pledge financial collateral as security for financial liabilities

F)
security holder: the person who acquires title to or liens in financial collateral as security for financial liabilities.

G)
indebtedness, monetary claims arising out of a credit institution grants credit in the form of a loan to a debtor who is not a consumer.

In this Act deemed security not as tuned before legal protection is established.

§ 3. Transfer of ownership is empowered to deal financial collateral in the form of transfer of ownership of financial security.

§ 4. The right to use the pledged financial security can be agreed that the security holder shall have the right to use set of financial security, but such usufruct can not be agreed to debt claims. The agreement may entitle the loans, mortgaging, sale or other reuse of security.
By exercising usufruct receive security holder an obligation to transfer equivalent collateral to the collateral at the latest on the due date for pledging financial obligations. It may be agreed that the obligation to transfer equivalent safety can be met by other means, including by the value of the corresponding security in the financial liabilities are offset. Security Haver preserves the original legal protection in relation to the corresponding security has been transferred in accordance with the first sentence.
The corresponding security means:

A)
when security consisting of cash deposits, payment of the same amount in the same currency, and

B)

When security is comprised of financial instruments: financial instruments that are part of the same issue or class, issued at the same nominal amounts and in the same currency and the rest of the same nature as security, or other asset if the arrangement entitles to transfer such by an event affecting the financial instruments.

§ 5. The public debt prosecution Agreement on financial collateral may be contracted, financial security can be set, and financial liability may arise until the time of opening of public debt proceedings against security controller. Is a contract, collateral pledged or financial liability occurred on the day of, but after the date of opening of public debt prosecution, standing agreement, collateral or requirement in relation to fellesforfølgningen if sikkerhetshaveren was in good faith with respect to the public prosecution was opened.
A collateral can be rescinded alone on the ground that it is set for a financial liability that has already been incurred.
With public debt proceedings meant debt negotiation under the Bankruptcy Act, bankruptcy and insolvency proceedings.

§ 6. Final Settlement Financial liabilities covered by an agreement on financial collateral may finally settled on the terms set forth in a written agreement between the parties. Agreement on final settlement may be enforced notwithstanding the Recovery Act §§ 7-3 and 8-1 or debentures Act § 26.
The final settlement means that the obligations of the accession of a predetermined situation is determined to pay claims according to agreed criteria, and by set-off. The party owes the largest amount obligated to pay a net sum equal to the difference between the parties' obligations to the other party.

§ 7. Enforcement of claims Faced financial security can be realized in the manner and on the terms required by written agreement between the parties.
When there is no written agreement regarding the realization, the provisions of the Enforcement Act, Bankruptcy Act and the Mortgage Act.

§ 8. Commercially reasonable terms Realisation, valuation of financial collateral and the calculation of financial commitments shall be made on commercially reasonable terms.

§ 9. Applicable Law For financial security in the form of registered financial instruments regulated any questions about the collateral legal nature and the effects that can be derived thereof, relationships with third parties, including security set's bankruptcy and realization of security, by the court in the State where the relevant account statement. It should not be given to choice of law rules of refutation or further reference.

§ 10. Commencement This Act applies when the King bestemmer.1
King may issue transitional provisions.

§ 11. Amendments to other Acts From the time the law comes into force, the following amendments to other Acts - - -