Competent Authority

The concept of a “Competent Authority” is relevant in two circumstances:

1. The definition of “Act of Insolvency”.  An “Act of Insolvency” includes the ‘commencement of any bankruptcy/winding-up/insolvency proceeding by any “Competent Authority” ’.  In turn, the “Act of Insolvency” definition feeds into the Event of Default found within Paragraph 10(a)(vi) of the GMRA; and
2. The Event of Default within Paragraph 10(a)(ix) of the GMRA.  Under this paragraph, an Event of Default arises, inter alia, if either the Seller or the Buyer is suspended or prohibited from dealing in securities by a “Competent Authority”.

A “Competent Authority” is defined as being “a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over a party in the jurisdiction of its incorporation or establishment or the jurisdiction of its head office”.

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