Claim by buying client in respect of default by buying dealer: transaction other than ASTC‑regulated transfer
7.5.27 Claim by buying client in respect of default by buying dealer: transaction other than ASTC‑regulated transfer
This regulation applies to a person (the buying client) if:
a dealer enters into a reportable transaction on behalf of the buying client; and
the reportable transaction is a purchase of securities; and
a transfer of the securities concerned pursuant to the purchase would not be an ASTC‑regulated transfer; and
at the end of the prescribed period for the transaction:
if subparagraph (ii) does not apply, the buying client has paid to the dealer the purchase price in relation to the purchase; and
the dealer has been suspended by the participating market licensee concerned or ACH, that suspension has not been removed and the buying client has paid, or is ready, willing and able to pay, to the dealer the purchase price in relation to the purchase; and
the dealer’s obligations to the buying client in respect of the purchase, in so far as they relate to settlement documents in relation to the purchase, have not been discharged.
The buying client may make a claim in respect of the purchase.
The buying client may make a single claim under this regulation in respect of 2 or more purchases.
A claim made under subregulation (3) is to be treated for subregulation (5) as if it consisted of a separate claim in respect of each of the purchases to which it relates.
The SEGC must allow the claim if the SEGC is satisfied that:
subregulation (1) entitles the buying client to make the claim; and
either:
the buying client has paid to the dealer the amount of the consideration for the purchase under the agreement for the purchase; or
the buying client has paid to the SEGC the amount of the consideration for the purchase for the purposes of the claim; and
the dealer’s obligations to the buying client in respect of the purchase, in so far as they relate to settlement documents in relation to the purchase, have not been discharged.
If the SEGC allows a claim in respect of a purchase of securities, the SEGC must, subject to regulation 7.5.29, supply to the buying client settlement documents in relation to the purchase.
This Act’s bill:Explanatory statement
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