Companies Act 2014 section 421

Netting of Financial Contracts Act 1995 not to affect registration requirements

Section 421 clarifies that the Netting of Financial Contracts Act 1995 does not override or remove the obligation to register charges under Part 7 of the Companies Act 2014.

• The Netting of Financial Contracts Act 1995 was introduced to facilitate swap instruments and similar financial contracts, particularly to address concerns around examinership blocking enforcement of such contracts.
• However, the broad wording of the Netting Act created a risk that charges securing financial contracts might not need to be registered with the CRO, potentially giving a misleading picture of a company's obligations to anyone inspecting its file.
• Section 421 closes this gap by confirming that charges which fall within the definition of registrable charges under Part 7 must still be registered, regardless of any provision in the Netting Act.
• Charges over assets such as cash, bank accounts, shares, bonds, and debt instruments securing financial contracts would typically not require registration as they do not fall within the category of registrable charges, but charges over assets such as land or equipment must be registered.