MercLaw – Unit 5
Contents
MercLaw – Unit 5 .....................................................................................................................................1
Contents...................................................................................................................................................1
1. Part 1- Security.................................................................................................................................3
Learning outcomes: .............................................................................................................................3
1. Introduction .................................................................................................................................3
1. Real security:............................................................................................................................3
2. Personal Security .....................................................................................................................3
2. Real Security ................................................................................................................................4
a) Mortgage bond over immovable property ..............................................................................4
b) Real security over movable property ......................................................................................6
c) Security by operation of law: ...................................................................................................7
3. Personal Security .........................................................................................................................8
2. Part 2 – Electronic Methods of Payment .......................................................................................10
Learning outcomes: ...........................................................................................................................10
1. Introduction: ..............................................................................................................................10
2. Traditional Methods and instruments of Payment: ..................................................................11
3. Modern Methods of payment: ..................................................................................................11
1. Credit Cards: ..........................................................................................................................12
2. Electronic Funds transfers(“EFT” transactions) .....................................................................13
3. Electronic/ E-money ..............................................................................................................15
4. Mobile/M-Money ..................................................................................................................16
3. Part 3- Crypto Currency .................................................................................................................18
Learning outcomes: ...........................................................................................................................18
a) Currency definitions...................................................................................................................18
b) Virtual Currences (VC’s) .............................................................................................................18
c) Latest developments: ................................................................................................................20
4. Part 4 – Money Laundering ...........................................................................................................23
Learning Outcomes: ...........................................................................................................................23
a) What is Money Laundering ........................................................................................................23
b) Legal regulation; ........................................................................................................................24
1. POCA ......................................................................................................................................24
2. FICA ........................................................................................................................................25
, 1. intermediaries in the financial system must know with whom they are doing business; ....25
2. the paper trail of transactions through the financial system must be preserved; ...............25
3. possible money laundering transactions must be brought to the attention of the Financial
Intelligence Centre (FIC) and the investigating authorities ...........................................................25
Unit 6 :....................................................................................................................................................28
1. Part 1- Access to information ........................................................................................................28
Learning outcomes: ...........................................................................................................................28
a) General background to personal information ...........................................................................28
b) Introduction to PAIA ..................................................................................................................29
c) The right to access information and limitations thereto...........................................................29
d) Duties of public and private bodies ...........................................................................................30
2. Part 2 – Protection of personal information .................................................................................31
Learning outcomes: ...........................................................................................................................31
a) Introduction ...............................................................................................................................31
b) Terminology and definitions, limitations nd exemptions..........................................................32
c) Rights of data subject: ...............................................................................................................33
d) Conditions for processing: .........................................................................................................34
e) Direct marketing ........................................................................................................................36
f) Fully automated decision-making..............................................................................................36
, 1. Part 1- Security
Learning outcomes:
• Main differences between real security and personal security?
• Purpose of provision of security?
• Rights involved in each form of security?
• When will these rights apply?
• Requirements to be met for form of security to be valid?
• Applicable legislation regulating form of security?
• Examples of different forms of security?
• Who will carry risk for payment of debt when it becomes due?
1. Introduction
Purpose of provision of security: To ensure that debtors fulfil their obligations, and then
creditors can demand some form of security:
• Guarantees money is paid back by the debtor
• Creditor will not risk suffering
Two forms of security:
• Real security and
• Personal security
1. Real security:
• Property of the debtor serves as security for payment of his debt
• E.g. a mortgage is registered on the debtor’s house
• Once debt is secured by real security, the creditor obtains a limited real right
• If the debtor fails to make a payment, the creditor can have the house
attached, and sold in execution (after judgement has been obtained from
court for outstanding amount), and debt will be settled with proceeds.
• In event of insolvency; mortgage will provide creditor with a preferent and
secured claim
• Real security is thus best form of security
2. Personal Security
• Third party undertakes to fulfil the debtor’s obligation if the main debtor
fails to do so
• E.g. a surety who stands in fir payment of debt should debtor fail to fulfil
obligation
, • Creditor only obtains personal right against person who undertook to provide
security
• Personal security; weaker form of security compared to real security
• Both real and personal security, the right of security is an accessory right
• Accessory right: the right is dependant on validity of principal debt(obligation) which
it secures
• Once the principal debt is paid, the security is terminated
• If principal debt = void; right of security -> insolvent
• If right of security = void/ later cancelled without principal obligation being satisfied;
principal obligation will continue to exist, but as an unsecured obligation
• Same would happen; object of real security is destroyed
• National Credit Act 34 of 2005 regulates security as it regulates all aspects of credit
provision
• Provisions of this statue should also be taken into consideration in addition to
common law principles set out there
1. Real Security
3 Forms of Real security:
a) Mortgage bond over immovable property
b) Real security over movable property
c) Security obtained by operation of law
a) Mortgage bond over immovable property
Mortgage bond:
• Can only be registered over immovable property (e.g. land)
• Immovable property can include:
o Building
o Farm
o Erf with/without building
o Farm
o Sectional title unit/share in land(held in joint property)
• E.g. Mortgage bond registered over a house to secure payment of money
borrowed form bank to finance purchase
• Arises from agreement between debtor and creditor
• Its an accessory obligation( dependant on valid principal debt)
• Mortgage creditor acquires limited real right in immovable property(serves as
security to ensure payment of mortgage-debtor’s debt)
Contents
MercLaw – Unit 5 .....................................................................................................................................1
Contents...................................................................................................................................................1
1. Part 1- Security.................................................................................................................................3
Learning outcomes: .............................................................................................................................3
1. Introduction .................................................................................................................................3
1. Real security:............................................................................................................................3
2. Personal Security .....................................................................................................................3
2. Real Security ................................................................................................................................4
a) Mortgage bond over immovable property ..............................................................................4
b) Real security over movable property ......................................................................................6
c) Security by operation of law: ...................................................................................................7
3. Personal Security .........................................................................................................................8
2. Part 2 – Electronic Methods of Payment .......................................................................................10
Learning outcomes: ...........................................................................................................................10
1. Introduction: ..............................................................................................................................10
2. Traditional Methods and instruments of Payment: ..................................................................11
3. Modern Methods of payment: ..................................................................................................11
1. Credit Cards: ..........................................................................................................................12
2. Electronic Funds transfers(“EFT” transactions) .....................................................................13
3. Electronic/ E-money ..............................................................................................................15
4. Mobile/M-Money ..................................................................................................................16
3. Part 3- Crypto Currency .................................................................................................................18
Learning outcomes: ...........................................................................................................................18
a) Currency definitions...................................................................................................................18
b) Virtual Currences (VC’s) .............................................................................................................18
c) Latest developments: ................................................................................................................20
4. Part 4 – Money Laundering ...........................................................................................................23
Learning Outcomes: ...........................................................................................................................23
a) What is Money Laundering ........................................................................................................23
b) Legal regulation; ........................................................................................................................24
1. POCA ......................................................................................................................................24
2. FICA ........................................................................................................................................25
, 1. intermediaries in the financial system must know with whom they are doing business; ....25
2. the paper trail of transactions through the financial system must be preserved; ...............25
3. possible money laundering transactions must be brought to the attention of the Financial
Intelligence Centre (FIC) and the investigating authorities ...........................................................25
Unit 6 :....................................................................................................................................................28
1. Part 1- Access to information ........................................................................................................28
Learning outcomes: ...........................................................................................................................28
a) General background to personal information ...........................................................................28
b) Introduction to PAIA ..................................................................................................................29
c) The right to access information and limitations thereto...........................................................29
d) Duties of public and private bodies ...........................................................................................30
2. Part 2 – Protection of personal information .................................................................................31
Learning outcomes: ...........................................................................................................................31
a) Introduction ...............................................................................................................................31
b) Terminology and definitions, limitations nd exemptions..........................................................32
c) Rights of data subject: ...............................................................................................................33
d) Conditions for processing: .........................................................................................................34
e) Direct marketing ........................................................................................................................36
f) Fully automated decision-making..............................................................................................36
, 1. Part 1- Security
Learning outcomes:
• Main differences between real security and personal security?
• Purpose of provision of security?
• Rights involved in each form of security?
• When will these rights apply?
• Requirements to be met for form of security to be valid?
• Applicable legislation regulating form of security?
• Examples of different forms of security?
• Who will carry risk for payment of debt when it becomes due?
1. Introduction
Purpose of provision of security: To ensure that debtors fulfil their obligations, and then
creditors can demand some form of security:
• Guarantees money is paid back by the debtor
• Creditor will not risk suffering
Two forms of security:
• Real security and
• Personal security
1. Real security:
• Property of the debtor serves as security for payment of his debt
• E.g. a mortgage is registered on the debtor’s house
• Once debt is secured by real security, the creditor obtains a limited real right
• If the debtor fails to make a payment, the creditor can have the house
attached, and sold in execution (after judgement has been obtained from
court for outstanding amount), and debt will be settled with proceeds.
• In event of insolvency; mortgage will provide creditor with a preferent and
secured claim
• Real security is thus best form of security
2. Personal Security
• Third party undertakes to fulfil the debtor’s obligation if the main debtor
fails to do so
• E.g. a surety who stands in fir payment of debt should debtor fail to fulfil
obligation
, • Creditor only obtains personal right against person who undertook to provide
security
• Personal security; weaker form of security compared to real security
• Both real and personal security, the right of security is an accessory right
• Accessory right: the right is dependant on validity of principal debt(obligation) which
it secures
• Once the principal debt is paid, the security is terminated
• If principal debt = void; right of security -> insolvent
• If right of security = void/ later cancelled without principal obligation being satisfied;
principal obligation will continue to exist, but as an unsecured obligation
• Same would happen; object of real security is destroyed
• National Credit Act 34 of 2005 regulates security as it regulates all aspects of credit
provision
• Provisions of this statue should also be taken into consideration in addition to
common law principles set out there
1. Real Security
3 Forms of Real security:
a) Mortgage bond over immovable property
b) Real security over movable property
c) Security obtained by operation of law
a) Mortgage bond over immovable property
Mortgage bond:
• Can only be registered over immovable property (e.g. land)
• Immovable property can include:
o Building
o Farm
o Erf with/without building
o Farm
o Sectional title unit/share in land(held in joint property)
• E.g. Mortgage bond registered over a house to secure payment of money
borrowed form bank to finance purchase
• Arises from agreement between debtor and creditor
• Its an accessory obligation( dependant on valid principal debt)
• Mortgage creditor acquires limited real right in immovable property(serves as
security to ensure payment of mortgage-debtor’s debt)
