(1) On the occurrence of an enforcement event relating to a security financial collateral arrangement, the collateral taker under the arrangement has a right to realise financial collateral provided under the arrangement -

(a) in the case of financial collateral in the form of a financial instrument, by sale or (subject to paragraph (2)) by appropriation and by setting off the instrument's value against, or applying that value in discharge of, the relevant financial obligations,

(b) in the case of financial collateral in the form of cash, by setting off the amount of cash against, or applying it, in discharge of the relevant financial obligations, and

(c) in the case of financial collateral in the form of credit claims, by sale or (subject to paragraph (2)) by appropriation and by setting off their value against, or applying their value in discharge of, the relevant financial obligations.

(2) For the purpose of this Regulation, a collateral taker may appropriate a financial instrument or credit claim only if the relevant security financial collateral arrangement -

(a) allows appropriation, and