Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.3B - CRISIS RESOLUTION FOR CS FACILITY LICENSEES  

Division 4 - Compulsory transfer of business or shares  

Subdivision C - Other matters  

SECTION 839A   PARTIAL TRANSFER OF NETTING CONTRACTS VOID  

839A(1)    
This section applies if:

(a)    a certificate issued under section 838A for a partial transfer of business comes into force; and

(b)    just before the partial transfer, the target body is a party to:

(i) a close-out netting contract (within the meaning of the Payment Systems and Netting Act 1998 ); or

(ii) a security given over financial property (within the meaning of that Act), in respect of an obligation of the target body under a close-out netting contract; or

(iii) a market netting contract (within the meaning of that Act); or

(iv) a security given over property, in respect of an obligation of the target body under a market netting contract; or

(v) an approved netting arrangement (within the meaning of that Act); and

(c)    the partial transfer covers some (but not all) of the following assets and liabilities:

(i) the assets and liabilities the body has, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to another party to the contract or arrangement (the counterparty );

(ii) those assets that are property over which security is given in respect of an obligation of the target body under the close-out netting contract or the market netting contract.

Note: The Payment Systems and Netting Act 1998 affects what the assets and liabilities of a party to a close-out netting contract, market netting contract or approved netting arrangement are taken to include.

839A(2)    
The partial transfer is void:

(a)    to the extent of the assets or liabilities the target body has, just before the partial transfer, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to the counterparty; and

(b)    if security is given over financial property (within the meaning of the Payment Systems and Netting Act 1998 ) in respect of an obligation of the target body under a close-out netting contract - to the extent that the assets are financial property in the possession or control of one of the following persons just before the partial transfer:

(i) the counterparty;

(ii) another person (who is not the target body) on behalf of the counterparty, under the terms of an arrangement evidenced in writing; and

(c)    if security is given over property in respect of an obligation of the target body under a market netting contract - to the extent that the assets are that property.