The Practical Law Banking and Finance module has been expanded to include two new key resources:
- a CHESS Sponsor Tripartite Deed; and
- a Priority Deed.
The CHESS Sponsor Tripartite Deed complements the existing set of security documents in the Banking and Finance module. It is used where a security interest is taken over Australian Securities Exchange (ASX) listed securities that are held through the Clearing House Electronic Subregister System (CHESS). The deed allows a secured party to:
- perfect its security interest over CHESS securities by "control" for the purposes of the Personal Property Securities Act 2009 (Cth) (the PPSA);
- prevent the grantor and the CHESS sponsor from exercising certain rights with respect to the CHESS securities that would prejudice the security interest held by the secured party; and
- require the grantor and the CHESS sponsor to provide information about the CHESS securities to the secured party.
The Priority Deed has been added to the Subordination, Priority and Intercreditor topic in the Banking and Finance module. The Priority Deed:
- regulates the ranking of security interests granted by a debtor to two (or more) of its creditors, where those security interests secured the same collateral;
- allows the author to select which of the creditors has the higher priority or entitlement to the proceeds of enforcement of those security interests;
- sets out which creditor has the right and power to determine the timing and enforcement of those security interests; and
- determines the manner in which the priority rules applicable under the PPSA, and the order of priority usually applicable to registered security interests granted over land, will be regulated between creditors.
Subscribers can access the CHESS Sponsor Tripartite Deed here and the Priority Deed here.
For more information on these documents or the Practical Law Australia Banking and Finance module, please contact head writer Alex Chernishev.