THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.10 - THE NATIONAL GUARANTEE FUND

Division 6A - Securities loans guarantees

SECTION 954E   EFFECT OF NOVATION, UNDER BUSINESS RULES, OF GUARANTEED SECURITIES LOAN  

954E(1)  [May make claim under sec 954D]  

Where:

(a)  an agreement is novated; and

(b)  before the novation, the agreement was a guaranteed securities loan;

this section has effect for the purposes of:

(c)  making a claim under section 954D in respect of the loan; and

(d)  the application of this Part (other than section 980) in relation to such a claim.

954E(2)  [Novation disregarded]  

Subject to subsections (3) and (4), the novation is to be disregarded.

954E(3)  [Discharge of obligation to pay under replacement agreement]  

If:

(a)  an obligation under the loan to pay an amount is replaced by an obligation under a replacement agreement to pay an amount; and

(b)  that obligation under the replacement agreement has been, or is to be, taken into account for the purposes of provisions of the business rules of a settlement authority that are of the kind referred to in subsection 954N(1);

the obligation to pay that amount under the loan is taken to be discharged.

954E(4)  [Effect of discharge of replacement agreement on loan agreement]  

If the replacement agreement or agreements is or are discharged or otherwise terminated, the loan agreement is taken to be discharged or otherwise terminated.