Commonwealth Consolidated Acts Commonwealth Consolidated ActsMain rule
(1) A person has control of an intermediated security that is credited to or recorded in a securities account if, and only if, this section so provides.
Control by agreement
(2) A secured party has control of an intermediated security if:
(a) one of the following conditions is satisfied:
(i) there is an agreement in force between the grantor, the secured party and the intermediary who maintains the securities account;
(ii) there is an agreement in force between the grantor and the intermediary;
(iii) there is an agreement in force between the grantor and the secured party, and notice of the agreement is given to the intermediary; and
(b) the agreement has the effect that:
(i) the intermediary must not comply with instructions given by the grantor in relation to the intermediated security without seeking the consent of the secured party (or a person who has agreed to act on the instructions of the secured party); or
(ii) the intermediary must comply, or must comply in one or more specified circumstances, with instructions (including instructions to debit the account) given by the secured party in relation to the intermediated security without seeking the consent of the grantor (or any person who has agreed to act on the instructions of the grantor).
(3) If the intermediary who maintains the securities account is an intermediary because of paragraph 15(2)(b), a reference to the intermediary in subparagraphs (2)(a)(i) to (iii) of this section includes a reference to a person prescribed by regulations made for the purposes of this subsection.
Note 1: Under paragraph 15(2)(b), a person is an intermediary if the person operates a clearing and settlement facility under an Australian CS facilities licence (within the meaning of the Corporations Act 2001 ), other than such a person prescribed by regulations made for the purposes of that paragraph.
Note 2: The regulations may prescribe a person by reference to a class or classes of persons (see subsection 33(3A) of the Acts Interpretation Act 1901 ).
(3A) A secured party has control of an intermediated security if there is an agreement in force under which the secured party (or a person who has agreed to act on the instructions of the secured party) is able to initiate or control the sending of some or all electronic messages or other electronic communications by which the intermediated security could be transferred or otherwise dealt with.
Control by secured party in whose name securities account is maintained
(4) A secured party has control of an intermediated security if:
(a) the securities account is maintained in the secured party's name; or
(b) the securities account is maintained in the name of another person (who is not the grantor or debtor), and that person acknowledges in writing that he, she or it holds the intermediated security on behalf of the secured party.