Commonwealth Consolidated Acts

PAYMENT SYSTEMS AND NETTING ACT 1998 - SECT 12

  (1)   The Reserve Bank may approve the arrangement if it is satisfied that:

  (a)   systemic disruption in the financial system could result if a participant went into external administration and the arrangement were not approved under this section; and

  (b)   the arrangement provides for netting to occur at least once on each business day; and

  (c)   the rules governing the arrangement establish a coordinator for the arrangement; and

  (d)   the coordinator of the arrangement has the resources, competency and integrity needed to administer the arrangement; and

  (e)   the rules governing the arrangement provide that if a party to the arrangement goes into external administration:

  (i)   the party must notify the coordinator as soon as practicable; and

  (ii)   the coordinator may exclude the party from the arrangement; and

  (f)   the rules governing the arrangement require a party to the arrangement to notify the coordinator as soon as practicable if they have reasonable grounds to suspect that another party to the arrangement is insolvent;

and of any other matters specified in the regulations.

  (2)   An approval:

  (a)   must be given in writing; and

  (b)   may be given subject to the terms and conditions specified in the approval.