(1) This section applies if:

(a)

a person or partnership (in this Division called the transferor ) is obliged to transfer securities of a particular kind to, or as directed by, another person or partnership (in this Division called the transferee ); and

(b)

the obligation is a claimable obligation; and

(c)

for the purpose of discharging the obligation, the transferor:

(i)

elects, in accordance with the transfer delivery service provisions of a settlement authority, to bring about a transfer of a particular number of securities of that kind to, or as directed by, the transferee by the means provided for in those provisions; and

(ii)

for the purpose of so bringing about the transfer, transfers that number of securities of that kind to the TDS nominee; and

(d)

for the purpose of bringing about the transfer of securities referred to in subparagraph (c)(i) by the means provided for in those provisions, the TDS nominee later purports to transfer that number of securities of that kind to, or as directed by, the transferee; and

(e)

the TDS nominee is in default under the transfer delivery service provisions because the transfer documents in relation to the purported transfer, so far as they relate to a particular number of securities of that kind (in this Division called the default securities ), are not sufficient for the purpose referred to in subsection 924(2); and

(f)

if the obligation is a purchase obligation—the transferee has paid, or is ready, willing and able to pay, to the transferor, under the agreement for the purchase, the consideration for the purchase.

(2) If the settlement authority has not taken action as mentioned in paragraph (3)(a) or (b), the transferee (even if it is the settlement authority) may make a claim in respect of the TDS nominee's default. (3) If the settlement authority has, for the purpose of remedying the TDS nominee's default:

(a)

where the settlement authority is also the transferee—obtained marketable securities of the same kind and number as the default securities; or

(b)

otherwise—transferred securities of the same kind and number as the default securities to, or as directed by, the transferee;