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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 954E

Effect of novation, under business rules, of guaranteed securities loan

(1) Where:

an agreement is novated; and

before the novation, the agreement was a guaranteed securities loan;

this section has effect for the purposes of:

making a claim under section 954D in respect of the loan; 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:

an obligation under the loan to pay an amount 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 obligation to pay that amount under the loan is taken to be discharged.

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

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