Payment Systems and Netting Regulations 2001

Select Legislative Instrument No. 224, 2001

made under the

Payment Systems and Netting Act 1998

Compilation No. 5

Compilation date:    1 June 2016

Includes amendments up to: F2016L00724

Registered:    22 June 2016

About this compilation

This compilation

This is a compilation of the Payment Systems and Netting Regulations 2001 that shows the text of the law as amended and in force on 1 June 2016 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

1 Name of Regulations

2 Commencement

3 Definitions

3A Declaration under definition of market netting contract

4 Declaration under definition of netting market

5 Financial property

6 Eligible obligations

7 Obligations to which section 15A of the Act applies

Endnotes

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

1  Name of Regulations

  These Regulations are the Payment Systems and Netting Regulations 2001.

2  Commencement

  These Regulations commence on gazettal.

3  Definitions

  In these Regulations:

Act means the Payment Systems and Netting Act 1998.

3A  Declaration under definition of market netting contract

 (1) For paragraph (b) of the definition of market netting contract in section 5 of the Act, a gas trading exchange agreement is declared to be a market netting contract for the purposes of the Act.

 (2) In this regulation:

AEMO means Australian Energy Market Operator Limited (ACN 072 010 327).

gas trading exchange means a facility:

 (a) established by AEMO exercising its functions under subsection 91BRK(1) of the National Gas Law set out in the Schedule to the National Gas (South Australia) Act 2008 (SA); and

 (b) through which persons may elect to buy and sell natural gas or related goods or services (including pipeline capacity).

gas trading exchange agreement means an agreement:

 (a) that relates to participation in, and the operation and administration of, a gas trading exchange; and

 (b) to which AEMO, or a person appointed by AEMO to operate the gas trading exchange, and a person who becomes a member of the exchange, are parties.

4  Declaration under definition of netting market

  For paragraph (b) of the definition of netting market in section 5 of the Act, each of the following is declared to be a netting market:

 (a) the arrangement consisting of the system for the settlement, by CLS Bank International, of payment instructions arising from foreign exchange transactions;

 (b) the arrangement consisting of the system for the settlement, by CLS Bank International, of derivative payment instructions.

5  Financial property

 (1) This regulation is made for paragraph (g) of the definition of financial property in section 5 of the Act.

 (2) The following property is declared to be financial property for the purposes of the Act:

 (a) a document evidencing ownership of gold, silver or platinum;

 (b) cash collateral (including cash, certificates of deposit and bank bills);

 (c) property described in paragraph 5(b), (c) or (e), or paragraph 25, of Attachment H to Prudential Standard APS 112—Capital Adequacy: Standardised Approach to Credit Risk, made by APRA under section 11AF of the Banking Act 1959 and as in force from time to time, as property that may be recognised as eligible collateral (ignoring any conditions set out in the Attachment);

 (d) property described in paragraph 5(d) of Attachment H to that prudential standard, ignoring:

 (i) the words “and the ADI holding the security has no information suggesting that the security justifies a rating below this level”; and

 (ii) any conditions set out in the Attachment;

 (e) a covered bond (within the meaning of the Banking Act 1959).

6  Eligible obligations

Obligations that may be eligible obligations

 (1) An obligation that relates to an arrangement that is a forward, swap or option, or any combination of those things, in relation to one or more commodities, is prescribed for the purposes of paragraph 14A(8)(a) of the Act.

Obligations that are not eligible obligations

 (2) None of the following are eligible obligations in relation to a close‑out netting contract:

 (a) an obligation under a credit facility (as defined in regulations made for the purposes of subparagraph 765A(1)(h)(i) of the Corporations Act 2001), including:

 (i) a margin lending facility (within the meaning of Chapter 7 of the Corporations Act 2001); and

 (ii) an obligation under a financial product that is declared by the Australian Securities and Investments Commission under subsection 761EA(9) of the Corporations Act 2001 not to be a margin lending facility;

 (b) an obligation under a deposit‑taking facility;

 (c) an obligation under a reciprocal purchase agreement (otherwise known as a repurchase agreement), a sell‑buyback arrangement or securities loan arrangement;

 (d) an obligation under a contract of insurance, including a life policy or a sinking fund policy within the meaning of the Life Insurance Act 1995;

 (e) an obligation under a managed investment scheme (within the meaning of the Corporations Act 2001);

 (f) an obligation under a lease or licence;

 (g) an obligation under a guarantee;

 (h) an obligation to pay money under:

 (i) a cheque; or

 (ii) an order for the payment of money; or

 (iii) a bill of exchange.

Authority for subregulation (2)

 (3) Subregulation (2) is made under subsection 14A(9) of the Act.

7  Obligations to which section 15A of the Act applies

  For the purposes of paragraphs 15A(1)(a) and (2)(a) of the Act, an obligation of a party to a close‑out netting contract to which a regulated body is a party is prescribed, if the obligation is created under one of the following:

 (a) a reciprocal purchase agreement (otherwise known as a repurchase agreement);

 (b) a sell‑buyback arrangement;

 (c) a securities loan arrangement.

Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation “(md)” added to the details of the amendment included in the amendment history.

If a misdescribed amendment cannot be given effect as intended, the abbreviation “(md not incorp)” is added to the details of the amendment included in the amendment history.

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history