Section 839A — Corporations Act 2001: Partial transfer of netting contracts void

(1) This section applies if: (a) a certificate issued under section 838A for a partial transfer of business comes into force; and (b) just before the partial transfer, the target body is a party to: (i) a close-out netting contract (within the meaning of the Payment Systems and Netting Act 1998); or (ii) a security given over financial property (within the meaning of that Act), in respect of an obligation of the target body under a close-out netting contract; or (iii) a market netting contract (within the meaning of that Act); or (iv) a security given over property, in respect of an obligation of the target body under a market netting contract; or (v) an approved netting arrangement (within the meaning of that Act); and (c) the partial transfer covers some (but not all) of the following assets and liabilities: (i) the assets and liabilities the body has, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to another party to the contract or arrangement (the counterparty); (ii) those assets that are property over which security is given in respect of an obligation of the target body under the close-out netting contract or the market netting contract. Note: The Payment Systems and Netting Act 1998 affects what the assets and liabilities of a party to a close-out netting contract, market netting contract or approved netting arrangement are taken to include. (2) The partial transfer is void: (a) to the extent of the assets or liabilities the target body has, just before the partial transfer, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to the counterparty; and (b) if security is given over financial property (within the meaning of the Payment Systems and Netting Act 1998) in respect of an obligation of the target body under a close-out netting contract—to the extent that the assets are financial property in the possession or control of one of the following persons just before the partial transfer: (i) the counterparty; (ii) another person (who is not the target body) on behalf of the counterparty, under the terms of an arrangement evidenced in writing; and (c) if security is given over property in respect of an obligation of the target body under a market netting contract—to the extent that the assets are that property.