Statistics Act, 1999
R 385
Financial Sector Regulation Act, 2017 (Act No. 9 of 2017)Chapter 12A : Resolution of Designated InstitutionsPart 3 : Resolution measures166V. 'No creditor worse off' rule |
| (1) | The Reserve Bank must not take resolution action in relation to a designated institution in resolution that would result in a creditor or shareholder of the designated institution receiving less than the creditor or shareholder would have received if the designated institution had been wound up. |
| (2) | The value of assets to which the creditor or shareholder becomes entitled in relation to the action must be taken into account in applying subsection (1). |
| (3) | Failure to comply with subsection (1) does not invalidate an acquisition of property by a bona fide purchaser for value who is not aware of the failure to comply (but may give rise to a right to compensation in the creditor or shareholder). |
| (4) | As soon as practicable after the Reserve Bank receives a valuation in terms of section 166Q(2) in respect of a designated institution in resolution, the Reserve Bank must— |
| (a) | consider, having regard to the valuation, whether a creditor or shareholder of the designated institution received, in respect of resolution action, less than it would have received if the designated institution had been wound up; and |
| (b) | if it considers that such a creditor or shareholder received less than it would have received if the designated institution had been wound up, determine the amount of the shortfall. |
| (5) | If the Reserve Bank makes a determination in terms of subsection (4)(b), the creditor or shareholder is entitled to recover from the designated institution the amount of the shortfall. |
| (6) | Subsection (5) does not limit any claim that the creditor or shareholder may have for any additional amount. |
[Section 166V 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]
