THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.10 - THE NATIONAL GUARANTEE FUND

Division 6 - Contract guarantees

SECTION 950   CLAIM BY BUYING DEALER IN RESPECT OF DEFAULT BY SELLING DEALER  

950(1)  [Claim by buying dealer]  

Where, as at the end of the completion period in relation to a reportable transaction that is a purchase by a dealer from another dealer:

(a)  the first-mentioned dealer has supplied, or is ready, willing and able to supply, to the other dealer, under the agreement for the purchase, the consideration for the purchase; and

(b)  the other dealer:

(i) if a transfer of the securities concerned pursuant to the purchase would be an SCH-regulated transfer - has not done all things that that dealer is required to do under the SCH business rules to effect a transfer of the securities pursuant to the purchase; or

(ii) in any other case - has not supplied to the first-mentioned dealer, under that agreement, settlement documents in relation to the purchase;

the first-mentioned dealer may make a claim in respect of the purchase.

950(1A)  [Dealer may make single claim]  

A dealer may make a single claim under this section in respect of 2 or more purchases.

950(1B)  [Components of single claim treated separately]  

A claim made under subsection (1A) is to be treated for the purposes of subsection (2) as if it consisted of a separate claim in respect of each of the purchases to which it relates.

950(2)  [Board to be satisfied]  

Where a dealer makes a claim in respect of a purchase of securities by the claimant from another dealer and the Board is satisfied that:

(a)  subsection (1) entitles the claimant to make the claim; and

(b)  the claimant has:

(i) for the purposes of the claim, paid to SEGC; or

(ii) under the agreement for the purchase, paid to the other dealer;

the amount of the consideration for the purchase; and

(ba)  if a transfer of the securities pursuant to the purchase would be an SCH-regulated transfer - the other dealer has not done all things that that dealer is required to do under the SCH business rules to effect a transfer of the securities pursuant to the purchase; and

(c)  if paragraph (ba) does not apply - settlement documents in relation to the purchase have not been supplied to the claimant under the agreement for the purchase; and

(d)  the agreement has not been discharged or otherwise terminated;

SEGC shall allow the claim.

950(3)  [SCH-regulated transfers]  

If:

(a)  SEGC allows under subsection (2) a claim in respect of a purchase of securities; and

(b)  a transfer of the securities pursuant to the purchase would be an SCH-regulated transfer;

SEGC must, subject to section 952A, transfer to the claimant securities of the same kind and number as the first-mentioned securities.

950(4)  [Non-SCH-regulated transfers]  

If:

(a)  SEGC allows under subsection (2) a claim in respect of a purchase of securities; and

(b)  subsection (3) does not apply;

SEGC must, subject to section 953, supply to the claimant settlement documents in relation to the purchase.