Security Account Control Agreement for Australia

Security Account Control Agreement Template for Australia

A Security Account Control Agreement is a critical document used in Australian secured financing transactions that establishes control over deposit accounts as collateral. The agreement creates a three-way relationship between an account holder (debtor), a secured party (typically a lender), and a deposit bank, governed by Australian law, particularly the Personal Property Securities Act 2009 (Cth). It sets out the mechanisms for control over the specified accounts, the rights and obligations of each party, and the circumstances under which the secured party can take exclusive control of the accounts, while providing the deposit bank with clear operational instructions and protections.

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What is a Security Account Control Agreement?

The Security Account Control Agreement is a crucial document in Australian secured lending transactions where deposit accounts form part of the collateral package. This agreement is typically used when a lender requires control over a borrower's bank accounts as security for a loan or other financial accommodation. The document complies with the Personal Property Securities Act 2009 (Cth) and other relevant Australian banking and securities legislation, ensuring the secured party obtains and maintains a perfected security interest in the deposit accounts. It establishes the operational framework for account control, including the mechanism for transitioning from the account holder's control to the secured party's control upon specified trigger events, while protecting the deposit bank's position. The agreement is particularly important in project finance, corporate lending, and structured finance transactions where cash control is a key element of the security package.

What sections should be included in a Security Account Control Agreement?

1. Parties: Identifies the three main parties: Account Holder, Secured Party, and Deposit Bank

2. Background: Explains the context of the agreement, including reference to the underlying credit facility and security arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation principles

4. Account Control and Security: Establishes the security interest and control rights over the specified accounts

5. Bank's Rights and Obligations: Details the deposit bank's responsibilities, including handling of instructions and maintaining the accounts

6. Control and Instructions: Specifies who can give instructions regarding the accounts and when, including the transition from account holder to secured party control

7. Account Holder Obligations: Sets out the account holder's continuing obligations and restrictions regarding the accounts

8. Representations and Warranties: Contains standard and specific representations and warranties from all parties

9. Security Interest and Priority: Addresses the creation and perfection of security interests and priority arrangements

10. Fees and Expenses: Details the fee structure and responsibility for expenses

11. Indemnification: Contains indemnification obligations of the parties, particularly the account holder

12. Term and Termination: Specifies the duration of the agreement and termination circumstances

13. Notices: Sets out how formal notices must be given between parties

14. General Provisions: Contains standard boilerplate provisions including governing law, jurisdiction, amendments, etc.

What sections are optional to include in a Security Account Control Agreement?

1. Multi-Currency Provisions: Include when accounts may hold multiple currencies, specifying conversion and treatment of different currencies

2. Electronic Banking Arrangements: Include when parties will use electronic banking systems for account access and instructions

3. Intermediary Bank Provisions: Include when intermediary banks are involved in the account structure

4. Special Instructions Protocol: Include when there are complex or unique instruction arrangements requiring detailed procedures

5. Securities Account Provisions: Include when the agreement covers securities accounts in addition to deposit accounts

6. Force Majeure: Include when specifically requested or when operating in jurisdictions where force majeure is not implied by law

7. Tax Provisions: Include when there are specific tax implications that need to be addressed

8. Regulatory Compliance: Include when specific regulatory requirements need detailed treatment beyond standard provisions

What schedules should be included in a Security Account Control Agreement?

1. Schedule 1 - Controlled Accounts: Lists all accounts covered by the agreement, including account numbers and types

2. Schedule 2 - Authorized Signatories: Lists individuals authorized to give instructions for each party

3. Schedule 3 - Fee Schedule: Details all fees payable under the agreement

4. Schedule 4 - Form of Notice of Exclusive Control: Template for secured party to exercise exclusive control

5. Schedule 5 - Operating Procedures: Detailed procedures for account operation and instruction processing

6. Appendix A - Form of Account Holder Instructions: Standard template for account holder instructions

7. Appendix B - Form of Secured Party Instructions: Standard template for secured party instructions

8. Appendix C - Notice Details: Detailed contact information for all parties for various types of notices

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Security Agreement

Sector

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Corporate Lending

Investment Banking

Asset Management

Private Equity

Infrastructure

Real Estate

Mining and Resources

Project Finance

Commercial Property

Manufacturing

Retail

Relevant Teams

Legal

Finance

Treasury

Credit

Risk Management

Compliance

Corporate Banking

Transaction Banking

Documentation

Operations

Project Finance

Relationship Management

Relevant Roles

Finance Director

Chief Financial Officer

Treasury Manager

Corporate Lawyer

Banking Lawyer

Finance Lawyer

Relationship Manager

Credit Manager

Security Trustee

Facility Agent

Account Manager

Treasury Operations Manager

Risk Manager

Compliance Officer

Transaction Manager

Project Finance Manager

Corporate Banking Manager

Legal Counsel

Company Secretary

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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