Securities Account Control Agreement Template for Australia

A Securities Account Control Agreement is a specialized legal document that establishes control mechanisms over securities accounts in Australian secured financing transactions. This agreement is required when you need to use securities accounts as collateral for loans or other financial obligations, ensuring compliance with the Personal Property Securities Act 2009 (Cth) and related Australian financial regulations.

When do you need this document?

You need a Securities Account Control Agreement when entering into secured financing arrangements where securities accounts serve as collateral. This typically occurs in commercial lending transactions, asset-based financing, and investment banking arrangements. The agreement is essential when a borrower pledges their securities account to secure a loan, allowing the lender to take control of the account if specific events occur, such as default or breach of loan terms. Investment funds, corporate borrowers, and high-net-worth individuals commonly use this document when their securities portfolios serve as security for credit facilities or margin lending arrangements.

Key legal considerations

The agreement must clearly define the roles and responsibilities of all parties, including the account holder, secured party, and securities intermediary. Critical clauses include control mechanisms that specify when and how the secured party can exercise control over the account, notification procedures for account changes, and the securities intermediary's obligations to comply with control instructions. The document should address voting rights on securities, dividend and interest payments, and procedures for disposing of securities upon enforcement. Risk allocation provisions are essential, particularly regarding the securities intermediary's liability limitations and the secured party's rights to substitute or release securities. The agreement must also establish clear priority rules and coordination mechanisms if multiple security interests exist over the same account.

Legal requirements in Australia

Under Australian law, Securities Account Control Agreements must comply with the Personal Property Securities Act 2009 (Cth), which governs the creation and perfection of security interests in personal property, including securities accounts. The agreement must satisfy the PPSA's requirements for attachment and perfection of security interests, including proper registration on the Personal Property Securities Register where required. The Corporations Act 2001 (Cth) imposes additional obligations regarding financial products and services, requiring compliance with licensing and disclosure requirements for securities intermediaries. The Banking Act 1959 (Cth) applies when account banks are involved, establishing prudential requirements and operational standards. Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) obligations must be considered, particularly regarding customer identification and reporting requirements. The agreement should also comply with Australian Financial Services Licence conditions and market integrity rules where applicable.