Commonwealth Repealed Acts

This legislation has been repealed.

CORPORATIONS LAW- SECT 1214

(1)

Where a futures broker receives for safe custody property:

(a)

that is the property of another person (in this section called the client);

(b)

that is, or is to be, delivered in accordance with a futures contract; and

(c)

for which the broker or a nominee of the broker is accountable;

the broker shall forthwith:

(d)

if the client requests that the property be deposited in safe custody with the broker's bankers—cause it to be so deposited or notify the client of any failure to comply with the request, whether or not caused by a refusal by the bankers to comply with the request; or

(e)

if the client does not make, or the bankers refuse to comply with, such a request and the business rules of the futures exchange that maintained or provided the futures market on which the contract was made enable the property to be deposited in safe custody—cause the property to be so deposited in accordance with those rules.

(2)

A futures broker shall not deposit as security for a loan or advance made to the broker property of a kind referred to in subsection (1) unless an amount is owed to the broker by the client in connection with a transaction entered into on the instructions of the client and the broker:

(a)

gives a written notice to the client identifying the property and stating that the broker intends to deposit the property as security for a loan or advance to the broker; and

(b)

deposits the property as security for a loan or advance to the broker, being a loan or advance of an amount that does not exceed the amount owed to the broker by the client on the day of the receipt by the broker of the property.

(3)

Where:

(a)

a futures broker has given a notice to a person as mentioned in subsection

(2)

and has deposited the property referred to in the notice as security for a loan or advance; and

(b)

the person:

(i)

has paid to the broker the amount owed by the person to the broker at the time the property was so deposited; and

(ii)

requests the broker to withdraw the property from deposit;

the broker shall, as soon as practicable after the request, withdraw the property from deposit, but nothing in this subsection prevents the broker from redepositing the property, as permitted by subsection (2), as a security for a loan or advance.

(4)

Where a futures broker deposits as security for a loan or advance made to the broker property of a kind referred to in subsection (1), the broker shall, at the end of the period of 3 months after the day on which the property is deposited, and at the end of each subsequent period of 3 months if the property is still on deposit, send to the person whose property it is written notice to that effect.