THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.10 - THE NATIONAL GUARANTEE FUND

Division 6 - Contract guarantees

SECTION 950A   EFFECT OF NOVATION, UNDER BUSINESS RULES, OF AGREEMENT FOR PURCHASE  

950A(1)  [Claim by buying dealer]  

Where:

(a)  a dealer (in this section called the ``buyer'' ) agrees to buy securities from another dealer (in this section called the ``seller'' ); and

(b)  the purchase is a reportable transaction; and

(c)  the agreement for the purchase is novated; and

(d)  under a replacement agreement, the seller becomes obliged to transfer securities to the buyer;

this section has effect for the purposes of:

(e)  making a claim under section 950 in respect of the purchase; and

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

950A(2)  [Novation disregarded]  

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

950A(3)  [Buyer supplying consideration]  

If:

(a)  the buyer's obligation to supply to the seller, under the agreement for the purchase, the consideration for the purchase 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 buyer is taken to have so supplied the consideration for the purchase.

950A(4)  [Replacement agreements discharged]  

If the replacement agreement or arrangements is or are discharged or otherwise terminated, the agreement for the purchase is taken to be discharged or otherwise terminated.