Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 (10 of 2018)

Schedule 5   Amendment of the Payment Systems and Netting Act 1998

Part 1   Main amendments

Payment Systems and Netting Act 1998

26   Subsections 15C(1) and (2)

Repeal the subsections, substitute:

(1) Subsection (2) applies if:

(a) a trigger event to which a specified stay provision (other than a direction stay provision) applies:

(i) is an event that involves a regulated body; and

(ii) happens in relation to a close-out netting contract (the trigger contract ) to which the regulated body is a party; and

(b) APRA is satisfied that all the matters in subsection (3) will be satisfied in relation to the party in respect of which the declaration under subsection (2) will be made:

(i) unless subparagraph (ii) applies - at the time the declaration will be made; or

(ii) if a certificate of transfer will come into force under the Business Transfer Act for a transfer of business from the regulated body to a receiving body - just after that coming into force; and

(c) the party in respect of which the declaration under subsection (2) will be made is not in external administration (disregarding paragraphs (d), (da), (db), (e) and (f) of the definition of external administration in section 5); and

(d) APRA has not already made a declaration under section 15B in relation to the trigger event happening in relation to the trigger contract.

(2) APRA may, before the end of the resolution period for the trigger event, declare that the specified stay provision is to continue to apply to:

(a) unless paragraph (b) or (c) applies:

(i) all close-out netting contracts to which the regulated body is a party; and

(ii) all securities given over financial property, in respect of obligations under those close-out netting contracts; or

(b) in the case of a total transfer under the Business Transfer Act:

(i) all close-out netting contracts to which the regulated body is a party (and to which the receiving body will become a party immediately after the transfer); and

(ii) all securities given over financial property, in respect of obligations under those close-out netting contracts; or

(c) in the case of a partial transfer under the Business Transfer Act - either or both of the following:

(i) all close-out netting contracts to which the regulated body is a party (and to which the regulated body will remain a party immediately after the transfer), and all securities given over financial property in respect of obligations under those contracts;

(ii) all close-out netting contracts to which the regulated body is a party (and to which the receiving body will become a party immediately after the transfer), and all securities given over financial property in respect of obligations under those contracts.