Explains why the ASX wants blockchains asap.   Also explains why...

Explains why the ASX wants blockchains asap.   Also explains why no one really knows what the hell is happening at any point in time. 

RG 222.27 A securities lending transaction on standard terms will usually result in both parties having a relevant interest in the securities under s608 for the following reasons:

(a) the borrower will have a relevant interest in the securities under s608(1) when it has a legally binding commitment to borrow particular securities; and

(b) the lender will continue to have a relevant interest in the securities through its right to recall the securities from the borrower, which, when accelerated by s608(8), amounts to a right to control disposal of the securities.

Note: Mere entry into the AMSLA will generally not result in the borrower acquiring a relevant interest in securities, but a relevant interest will arise when the borrower secures a firm (i.e. legally binding) commitment to borrow the securities. The situation is generally different for prime broking agreements: see RG 222.52.

RG 222.28 The lender is also likely to acquire a relevant interest in any securities delivered by the borrower as collateral for the loan of securities. The borrower will continue to have a relevant interest in the collateral securities where it has a right to recall them, even if the right of recall is conditional on the provision of substitute collateral.

RG 222.29 When a borrower on-lends the securities to a third party, provided the borrower retains a relevant interest in the securities, the lender will continue to have a relevant interest in the securities under s608(8). In this way, a number of securities lending transactions will result in a chain of people having a relevant interest in the same securities, meaning that each party in the chain must calculate their own holdings to determine if they have a substantial holding.

RG 222.30 This chain requires that a subsequent borrower retain a relevant interest. The borrower will lose its relevant interest in the lent securities if it disposes of them in circumstances where it does not retain any rights (e.g. where the borrower sells on market). The lender will also lose its relevant interest in the securities in these circumstances, even though the lender has the right to require the borrower to deliver equivalent securities under its securities lending agreement. This is because the lender’s relevant interest arises under s608(8) and that provision depends on the counterparty having a relevant interest in the securities.