BANKRUPTCY
& LIQUIDATION
Securities
on the CHESS Subregister
These notes are to be read
in conjunction with the CHESS Procedure Guidelines - Participants.
Similar to deceased estates there are other situations and circumstances
where a holding passes by direction of the law to the control of another
party and certain requirements should be met.
The most common occurrence
of these include:-
a) Company in Liquidation
Company in Receivership
Company Receiver Manager appointed
Company Administrator appointed
Bankruptcy of an individual or partnership.
(All the above are defined in the SCH Business Rules under "Bankruptcy")
b) Protected Persons
Upon notification of any
of the above, no action should be taken until the bona-fides of the
legal representative are established, not only to protect the interests
of the securityholder, but also to protect the company and their registry
administrators, be it the company registry or participants.
In order to prevent unauthorised
dealings in the securities, it may be prudent to apply a holding lock
where such notification is received, in the case of bankruptcy, from
The Insolvency and Trustee Service Australia "ITSA", or in
another case from a recognisable and known trustee or liquidator.
The requirements that should
be met before any changes are made to the registers may vary depending
on the circumstances however, the following documentation should be
sighted before permitting dealings in the securities.
All forms of company bankruptcy
a) Court order or an NP11
Certificate issued by ITSA
b) Statement from the representative stating that they are the persons
named in the ITSA certificate
Individual and Partnership
Bankruptcy
a) An NP11 certificate
issued by ITSA
b) A statement from the trustee, if other than ITSA, stating that
they are the persons named in the NP11 certificate.
Protected Persons
a) Court or other order.
b) Copy of the government Gazette notice
c) Statement from the trustee stating that they are the person named
in the Gazette notice.
When all requirements have
been met no further dealings in the securities may be made by the original
securityholder, or in the case of a company, by the director/s.
Apart from amending the address
to C/- trustee, liquidators etc all movement of the securities must
be made by way of transfer executed by the now legal representative
except in the case of bankruptcy where the securities may be transmitted
to the trustee.
Securities
on the CHESS Subregister
Similar to deceased estates,
the original sponsorship agreement continues for a period of 3 months
following the removal of a holder record lock (receipt of requirements
enabling the trustee, liquidator etc to deal with the securities) or
until such time as the securities are either transferred, distributed
or converted to the issuer sponsored subregister.
Where the notification is
forwarded directly to the company in error, the notification should
be on-forwarded to the controlling participant under cover of a letter
or returned to the sender for forwarding to the controlling participant.
Where the notification is on-forwarded to the controlling participant,
a copy of the covering letter should be forwarded to the sender for
information.
Refer: Form 14 "DOCUMENT FORWARDING"
The controlling participant
(unless required to convert the securities to the issuer sponsored subregister)
will, when satisfied they have received a bona fide notification, place
a holding lock on the holding and change the address to care of the
trustee, liquidator etc. until such time as further documents are received
enabling dealings in the securities.
The trustee, liquidator,
etc alternatively may request that the securities be converted to the
Issuer Sponsored Subregister.
Upon receipt of a written
request, the controlling participant should remove the holding from
the CHESS subregister, cancel the sponsorship agreement, and forward
the relevant notification to the issuer.
This notice should be in
the standard format and include copies of all correspondence etc. received
by the controlling participant.
