4 Financial markets

Special treatment is afforded to insolvencies in the financial markets. Such insolvencies are dealt with under the default rules of the relevant market through a clearing house system that protects inter-market traders with financial market debts and obligations from the pari passu principle, which otherwise applies to all insolvencies. Debts and obligations incurred outside financial market transactions continue to be governed by the normal rules of insolvency. The Companies Act 1989 Part VII disapplies the general law of insolvency from the operation of the default rules of recognised investment exchanges and their clearing systems, and the

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