163. Application to determine whether Default Proceedings to be taken

(1) This section applies where a Relevant Insolvency Event has occurred in the case of —
(a) a Recognised Investment Exchange or a member or Designated Non-Member of a Recognised Investment Exchange;
(b) a Recognised Clearing House or a member of a Recognised Clearing House; or
(c) a Client which is providing Indirect Clearing Services to an Indirect Client.
The Recognised Investment Exchange, member, Designated Non-Member, Recognised Clearing House or Client in whose case a Relevant Insolvency Event has occurred is referred to below as the "Person in Default".
(2) For the purposes of this section a "Relevant Insolvency Event" occurs where —
(a) a Winding-Up order is made;
(b) an administration order is made;
(c) an Administrator is appointed under section 21 of the Insolvency Regulations 2015 (Power to appoint) or under section 29 of the Insolvency Regulations 2015 (Power to appoint);
(d) a resolution for voluntary Winding-Up is passed; or
(e) an order appointing a provisional liquidator is made.
(3) Where in relation to a person in default a Recognised Body (the "Responsible Recognised Body") —
(a) has power under its Default Rules to take action in consequence of the Relevant Insolvency Event or the matters giving rise to it; but
(b) has not done so;
a Relevant Office-Holder appointed in connection with or in consequence of the Relevant Insolvency Event may apply to the Regulator.
(4) The application shall specify the Responsible Recognised Body and the grounds on which it is made.
(5) On receipt of the application the Regulator shall notify the Responsible Recognised Body, and unless within three Business Days after the day on which the notice is received the Responsible Recognised Body —
(a) takes action under its Default Rules; or
(b) notifies the Regulator that it proposes to do so forthwith;
then, subject as follows, the provisions of sections 154 to 161 do not apply in relation to Market Contracts to which the Person in Default is a party or to anything done by the Responsible Recognised Body for the purposes of, or in connection with, the Settlement of any such contract.
(6) The provisions of sections 154 to 161 are not disapplied if before the end of the period mentioned in subsection (5) the Regulator gives the Responsible Recognised Body a Direction under section 162(2)(a). No such Direction may be given after the end of that period.
(7) If the Responsible Recognised Body notifies the Regulator that it proposes to take action under its Default Rules forthwith, it shall do so, and that duty is enforceable, on the application of the Regulator, by injunction.