Witness Protection Act, 1998
R 385
Financial Sector Regulation Act, 2017 (Act No. 9 of 2017)Chapter 12A : Resolution of Designated InstitutionsPart 3 : Resolution measures166U. Creditor hierarchy and equality of claims |
| (1) | The Reserve Bank must not take a resolution action, and must ensure that a designated institution in resolution does not take a resolution action, if it appears to the Reserve Bank that the result of the action would be that the value of a claim of a creditor of the designated institution would be reduced. |
| (2) | Subsection (1) does not apply— |
| (a) | to the claims of shareholders; or |
| (b) | if the claims of creditors and shareholders of the designated institution that rank lower in the creditor hierarchy have been reduced to zero. |
| (3) | Failure to comply with subsection (1) does not invalidate the action taken. |
(4)
| (a) | In taking resolution action in relation to a designated institution in resolution, the Reserve Bank must treat claims of creditors and shareholders of the designated institution that would have the same ranking in insolvency equally. |
| (b) | The Reserve Bank must ensure that, when a designated institution in resolution takes resolution action, claims of creditors and shareholders of the designated institution that would have the same ranking in insolvency are treated equally. |
| (c) | Paragraphs (a) and (b) do not apply if the Reserve Bank determines that it is necessary to treat the claims differently to effect the orderly resolution of the designated institution. |
[Section 166U 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]
