Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - REG 7.5.24

Claim by selling client in respect of default by selling dealer: ASTC-regulated transfer

             (1)  This regulation applies to a person (the selling client ) if:

                     (a)  a dealer enters into a reportable transaction on behalf of the selling client; and

                     (b)  the reportable transaction is a sale of securities; and

                     (c)  a transfer of the securities concerned pursuant to the sale would be an ASTC-regulated transfer; and

                     (d)  at the end of the prescribed period for the transaction:

                              (i)  if subparagraph (ii) does not apply--the selling client has done all things necessary to enable the dealer to do all things that the dealer is required to do under the operating rules of a participating market licensee or ACH to effect a transfer of the securities pursuant to the sale; and

                             (ii)  the dealer has been suspended by the participating market licensee concerned or ACH, that suspension has not been removed and the selling client has done, or is ready, willing and able to do, all things necessary to enable the dealer to do all things that the dealer is required to do under the operating rules of the participating market licensee or ACH to effect a transfer of the securities pursuant to the sale; and

                            (iii)  the dealer's obligations to the selling client in respect of the sale, in so far as they relate to the consideration for the sale, have not been discharged.

             (2)  The selling client may make a claim in respect of the sale.

             (3)  The selling client may make a single claim under this regulation in respect of 2 or more sales.

             (4)  A claim made under subregulation (3) is to be treated for subregulation (5) as if it consisted of a separate claim in respect of each of the sales to which it relates.

             (5)  The SEGC must allow the claim if the SEGC is satisfied that:

                     (a)  subregulation (1) entitles the selling client to make the claim; and

                     (b)  the selling client:

                              (i)  has done all things necessary to enable the dealer to do all things that the dealer is required to do under the operating rules of ACH to effect a transfer of the securities pursuant to the sale; or

                             (ii)  has, for the purposes of the claim, in accordance with the operating rules of ACH, transferred to the SEGC or to an Exchange body securities of the same kind and number as the first-mentioned securities; and

                     (c)  the dealer's obligations to the selling client in respect of the sale, in so far as they relate to the consideration for the sale, have not been discharged.

             (6)  If the SEGC allows a claim, the SEGC must pay to the selling client the amount of the consideration less so much (if any) of the total of any brokerage fees and other charges, and any stamp duty and other duties and taxes, payable by the selling client in connection with the sale as has not already been paid by the selling client.

             (7)  If a selling client transfers securities to an Exchange body as mentioned in subparagraph (5)(b)(ii), the Exchange body must account to the SEGC for those securities in accordance with the operating rules of ACH.



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