| (1) |
Notwithstanding any rule of the common law to the contrary, all unperformed obligations arising out of one or more master agreements between the parties, or obligations arising from such agreement or agreements in respect of assets in which ownership has been transferred as collateral security, shall, upon the sequestration of the estate of a party to such master agreement, terminate automatically at the date of sequestration, the values of those obligations shall be calculated at market value as at that date, the values so calculated shall be netted and the net amount shall be payable. |
| (2) |
For purposes of this section "master agreement" means— |
| (a) |
an agreement in accordance with standard terms published by the International Swaps and Derivatives Association, the International Securities Lenders Association, the Bond Market Association or the International Securities Market Association, or any similar agreement, which provides that, upon the sequestration of one of the parties— |
| (i) |
all unperformed obligations of the parties in terms of the agreement— |
| (aa) |
terminate or may be terminated; or |
| (bb) |
become or may become due immediately; and |
| (ii) |
the values of the unperformed obligations are determined or may be determined; and |
| (iii) |
the values are netted or may be netted, so that only a net amount (whether in the currency of the Republic or any other currency) is payable to or by a party, |
and which may further provide that the values of assets which have been transferred as collateral security for obligations under that agreement shall be included in the calculation of the net amount payable upon sequestration; or
| (b) |
any agreement declared by the Minister, after consultation with the Minister of Finance, by notice in the Gazette to be a master agreement for the purposes of this section. |
| (3) |
The provisions of this section shall not apply to— |
| (b) |
a netting arrangement contemplated in the National Payment System Act, 1998 (Act No. 78 of 1998). |
| (4) |
Section 341(2) of the Companies Act, 1973 (Act No. 61 of 1973), and sections 26, 29 and 30 of this Act shall not apply to dispositions in terms of a master agreement. |
Protection of Businesses Act, 1978
