The security cession of the rights under life policies marries two separate areas of the law: The Law of cession and the Law of Insurance. This makes for a complex union since varying common law and statutory principles 􀏐ind application, and in reality trade practices also play a role. In theory a cession in securitatem debiti may take one of two possible constructions, namely a pledge or a fiduciary security cession, and each has its own advantages and disadvantages. Disparity arose when judicial preference was given to the pledge construction while academics preferred the other. The problem, however, was larger than a disagreement as to the better construction. The underlying problem was that there was a lack regarding clarity as to the practical operation of security cession of life policies, in addition to the problems surrounding the construction thereof. As a solution to this problem some academics have suggested legislative intervention. The South African Law Reform Commission, nevertheless, advised against it in 1991 and was of the opinion that the issue was one which our courts would eventually solve. In the 22 years since then, our courts have merely confirmed its preference for the pledge construction. The intricacies of security cessions of life policies have seen no further judicial development. It is probable that the courts do not have enough practical information at hand to advance this area of the law. An investigation into the operation of such cessions in practice was thus necessary. The outcome of the practical investigation reveals that legislative intervention is indeed a viable solution especially since the issues are too complex for the courts to solve. As part of this work, legislation has been drafted and it is recommended that this is inserted into the Security by Means of Movable Property Act . / Die sessie ter sekerheidstelling van regte voortspruitend uit 'n lewensversekeringspolis betrek twee aparte onderafdelings van die rege naamlik die reg insake sessie en die versekeringsreg. Die gevolg van hierdie dualisme is dat 'n magdom gemeenregtelike en statutêre regsbeginsels van toepassing is wat sessies van hierdie aard kompliseer. Daarbenewens speel handelspraktyke ook ‘n rol. Teoreties kan 'n sessie in securitatem debiti een van twee moontlike konstruksies aanneem, naamlik sessie van pandgewing en fidusiêre sekerheids sessie, en elk het sy eie voor- en nadele. Onenigheid was aan die orde van die dag nadat die howe aan die pandgewings konstruksie voorkeur verleen het, terwyl akademiese skrywers die alternatiewe konstruksie verkies het. Die probleem was egter veel eerder weens ‘n gebrek aangaande duidelikheid oor die praktiese toepassing van die sessies ter sekerheidstelling van lewenspolisse, as die onenigheid oor welke van die twee konstruksies teoreties die beter een sou wees . Om die probleem te oorkom, het sommige akademiese skrywers voorgestel dat die wetgewer moes ingryp. Die Suid-Afrikaanse Regskommissie het egter in 1991 daarteen besluit en die mening gehuldig dat die probleem uiteindelik deur die howe opgelos sou moes word. Sedertdien het die howe egter telkens hul voorkeur ten opsigte van die pandkonstruksie uitgespreek, en derhalwe het daar geen verdere deurslaggewende juridiese ontwikkeling rondom die kwelpunte van sessies ter sekerheidstelling plaasgevind nie. Dit is waarskynlik daaraan te wyte dat die howe oor ontoereikende praktiese inligting beskik het om hierdie gebied van die reg noemenswaardig uit te bou. Dit was gevolglik nodig om 'n ondersoek aangaande die toepassing in die praktyk van hierdie tipe sessies te loods. Die resultaat van dié ondersoek toon dat 'n statutêre ingreep inderdaad 'n lewensvatbare oplossing kan bied, aangesien die kwessies te ingewikkeld is vir die howe om te oorkom. Deel van hierdie studie bevat voorgestelde wetgewing met die aanbeveling dat dit in die Wet op Sekerheidstelling deur middel van Roerende Goed 57 van 1993 opgeneem word. / Thesis (LLD)--University of Pretoria, 2013. / Mercantile Law / LLD / Unrestricted

This thesis considers the typical structure and requirements of a traditional securitisation scheme in South Africa. The models used in other jurisdictions cannot be applied unchanged in South Africa. South African securitisation structures make use of a security special purpose vehicle (SPV), because of uncertainties about the provisions of the Companies Act 61 of 1973 relating to the trustee for debenture-holders. An evaluation of the functioning of a security SPV leads to the conclusion that a trustee for debenture-holders should still be appointed within the security SPV structure to represent the interests of the investors. The trust for debenture-holders can be a true trust. The use of general notarial bonds over claims, pledges of claims and fiduciary security cession is examined to determine the effectiveness of each one during securitisation. Aspects of several Acts, Notices and other regulatory measures are considered where they are relevant to securitisation. Of specific importance is the Exemption Notice Relating to Securitisation Schemes, 2008. The Notice requires that both rights and obligations of the originator must be transferred to the SPV. The requirement that the obligations of the originator must be transferred leads to the conclusion that the Notice requires a transfer of claims by means of cession and a transfer of duties by means of delegation. For several reasons, delegation is not a suitable method of transfer during securitisation. Foremost among these reasons is that delegation is a form of novation, which means that the claims cease to exist and are replaced with new claims between the debtors and the SPV. Security rights that were accessory to these claims will then also cease to exist. The amendment to the Notice is recommended so that transfer of claims by means of cession will suffice for compliance with the Notice. The South African courts‘ approach to simulated transactions is evaluated to determine the possibility that the sale of the assets to the SPV may be viewed as a simulated transaction. This thesis evaluates the provisions in insolvency law that could be raised to impeach the sale of the assets in the event of the originator‘s insolvency. The risk of avoidance of the transaction on either ground is small. / Mercentile Law / L.L.D. (Mercentile Law)

This thesis considers the typical structure and requirements of a traditional securitisation scheme in South Africa. The models used in other jurisdictions cannot be applied unchanged in South Africa. South African securitisation structures make use of a security special purpose vehicle (SPV), because of uncertainties about the provisions of the Companies Act 61 of 1973 relating to the trustee for debenture-holders. An evaluation of the functioning of a security SPV leads to the conclusion that a trustee for debenture-holders should still be appointed within the security SPV structure to represent the interests of the investors. The trust for debenture-holders can be a true trust. The use of general notarial bonds over claims, pledges of claims and fiduciary security cession is examined to determine the effectiveness of each one during securitisation. Aspects of several Acts, Notices and other regulatory measures are considered where they are relevant to securitisation. Of specific importance is the Exemption Notice Relating to Securitisation Schemes, 2008. The Notice requires that both rights and obligations of the originator must be transferred to the SPV. The requirement that the obligations of the originator must be transferred leads to the conclusion that the Notice requires a transfer of claims by means of cession and a transfer of duties by means of delegation. For several reasons, delegation is not a suitable method of transfer during securitisation. Foremost among these reasons is that delegation is a form of novation, which means that the claims cease to exist and are replaced with new claims between the debtors and the SPV. Security rights that were accessory to these claims will then also cease to exist. The amendment to the Notice is recommended so that transfer of claims by means of cession will suffice for compliance with the Notice. The South African courts‘ approach to simulated transactions is evaluated to determine the possibility that the sale of the assets to the SPV may be viewed as a simulated transaction. This thesis evaluates the provisions in insolvency law that could be raised to impeach the sale of the assets in the event of the originator‘s insolvency. The risk of avoidance of the transaction on either ground is small. / Mercentile Law / L.L.D. (Mercentile Law)