Securities and Futures Act 2001 · 2020 Revised Edition · Part 3 · Clearing Facilities
81J. Application of market collateral not affected by certain other interest, etc.
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This section has effect with respect to the application by an approved clearing house, or a recognised clearing house, of property provided as market collateral (called in this section the property).
approved clearing house
“approved clearing house” means a corporation that is approved by the Authority under section 51(1)(a) as an approved clearing house;
The property may be applied in accordance with the business rules or default rules of the approved clearing house or recognised clearing house, so far as it is necessary for it to be so applied, despite —
property
“property” includes property, right and power of every description;
any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the approved clearing house or recognised clearing house had actual notice of the interest, right or breach of duty (other than any interest or right arising from the situation referred to in paragraph (b)) (as the case may be) at the time the property was provided as market collateral; or
that the property is deposited by the approved clearing house or recognised clearing house in a trust account held for the benefit of a participant.
No right or remedy arising subsequent to the provision of the property as market collateral may be enforced to prevent, or interfere with, the application of the property by the approved clearing house or recognised clearing house in accordance with its business rules or default rules.
market collateral
“market collateral” means any property held by or deposited with an approved clearing house or a recognised clearing house, for the purpose of securing any liability arising directly in connection with the ensuring of the performance of market contracts by the approved clearing house or recognised clearing house;
Where an approved clearing house, or a recognised clearing house, has power under this section to apply the property despite an interest, a right or a remedy, a person to whom the approved clearing house or recognised clearing house disposes of the property in accordance with its business rules or default rules takes free from that interest, right or remedy.
recognised clearing house
“recognised clearing house” means a corporation that is recognised by the Authority under section 51(1)(b) or (2) as a recognised clearing house;