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(1) Where a security deposited with a depository is charged by a depositor referred to as "the charger" in favour of a person referred to as "the chargee" the chargee or the nominee of the chargee shall create a security interest in the security which is the subject of the charge

(2) A security interest in deposited securities to secure the payment of a debt or liability may be created in favour of a chargee upon the request of the chargee by an instrument of charge in the form prescribed under the central securities depository rules executed by the charger.

(3) Subject to this Act or to rules made by the Commission, a security interest shall not be created in deposited securities.

(4) An instrument of charge that creates a security interest in a deposited security in favour of another person shall be deposited with the central securities depository where the securities charged are held, for registration.

(5) The central securities depository agent shall on receipt of the instrument of charge deposited register the instrument in a register of charges maintained by the central security depository.

(6) If a charge over a deposited security is being discharged or released, the central securities depository or its agent, shall on receipt of a notice of the charge confirm the discharge or release and transfer the deposited security into the securities account of the charger.

(7) This section shall not

(a) apply to floating charges,

(b) affect the validity and operation of floating charges in respect of deposited securities created under any law, and

(c) be construed to require the central securities depository to monitor, protect or give effect to an agreement or memorandum made between the charger and the chargee in respect of a charge; but the central securities depository or its agent, may require the charger or chargee to provide a supporting document of the charger on the creation of the security interest by way of the charge.