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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 950A

Effect of novation, under business rules, of agreement for purchase

(1) Where:

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

the purchase is a reportable transaction; and

the agreement for the purchase is novated; and

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

this section has effect for the purposes of:

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

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

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

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

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.

(4) If the replacement agreement or agreements is or are discharged or otherwise terminated, the agreement for the purchase is taken to be discharged or otherwise terminated.

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