THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.10 - THE NATIONAL GUARANTEE FUND

Division 6A - Securities loans guarantees

SECTION 954G   HOW CLAIM IN RESPECT OF SECURITIES OR NON-MONEY SECURITY BENEFITS IS TO BE SATISFIED  

954G(1)  [Board to be satisfied]  

Subject to section 954K, SEGC must allow a claim in respect of an obligation under a guaranteed securities loan to transfer securities or security benefits (other than money) if the Board is satisfied that:

(a)  the claimant is entitled to make the claim; and

(b)  the obligation is still undischarged to the extent of a particular number of securities or security benefits of a particular kind (in this section called the ``outstanding items'' ).

954G(2)  [How claim to be satisfied]  

Subject to subsection (3), if:

(a)  SEGC allows the claim; and

(b)  the claimant has:

(i) under the guaranteed securities loan, paid as directed by the borrower; or

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

each amount (if any) required to be paid under the loan by the claimant upon the discharge of the obligation;

SEGC must transfer to, or as directed by, the claimant, securities or security benefits of the same kind and number as the outstanding items.

954G(3)  [Satisfying claim where para (2)(b) unsatisfied]  

If:

(a)  SEGC allows the claim; and

(b)  either:

(i) paragraph (2)(b) is not satisfied; or

(ii) paragraph (2)(b) is satisfied but the Board is satisfied that it is not reasonably practicable for SEGC to obtain securities or security benefits of the same kind and number as the outstanding items within the pre-cash settlement period;

SEGC must satisfy the claim by paying to the claimant the amount that, as at the time when the Board decides it is so satisfied, is the actual pecuniary loss suffered by the claimant in respect of the failure to discharge the obligation.

954G(4)  [Calculating pecuniary loss]  

In working out the amount of the actual pecuniary loss suffered in respect of the failure to discharge the obligation, regard may be had to the cost to the claimant of any securities or security benefits of the same kind as the outstanding items that the claimant obtained because the obligation was not discharged.

954G(5)  [``pre-cash settlement period'']  

In this section:

``pre-cash settlement period'' means:

(a)  if the business rules of the claimant, as in force when the Board allows the claim, prescribe a period, for the purposes of this section, in relation to a class of claims that includes the claim - that period; or

(b)  otherwise - such period as the Board, having regard to all the circumstances of the claim, considers reasonable.